“Carry Trades” on the rise as stocks rally and renewed optimism on economic recovery

[RTFX-Trading]

“Carry Trades” on the rise as stocks rally and renewed optimism on economic recovery

What’s New?
Euro area: Trade Balance up to €0.4B in April
United States: Top bankers believe global recovery may start by end of year.
Asia: Nikkei up 3pct; investor risk appetite revived.
Australia: RBA Chief says interest rates “pretty low”.

Today:
10h30 UK: CPI M/M (APR), exp 0.40% previous 0.20%.
10h30 UK: Retail Prices Index M/M (APR), exp 0.20%, previous 0.00%
11h00 Euro zone: German ZEW Survey (Economic Sentiment) (MAY), exp 20.0, previous 13.0
14h30 US: Building Permits (APR), exp 530’000, previous 516’000
14h30 US: Housing Starts (APR), exp 523’000, previous 510’000
23h00 US: ABC Consumer Confidence, exp -41.0, previous -42.0

Overnight Rates & Indices:
EURUSD: 1.3579 – 1.3530.
USDCHF: 1.1164 – 1.1136.
GBPUSD: 1.5355 – 1.5296.
EURJPY: 131.09 – 130.16.
USDJPY: 96.62 – 96.13.
DowJones: 8'504.08 +2.90%.
NASDAQ: 1’732.36 +3.11%.
S&P 500: 909.71 +3.04%.
Nikkei: 9’302.62 +2.80%.
Gold: $921.64
Crude Oil: $59

Comments:

The yen dipped against the dollar on Tuesday after falling sharply the previous day when a rally in shares revived risk appetite and comments from a Japanese official sparked concern about the possibility of intervention.

The Australian dollar increased to near seven-month peaks against the yen and dollar, following comments by Reserve Bank of Australia Governor Glenn Stevens, that Australian interest rates were "pretty low".

The world's top policymakers offered their most positive assessment of the global economy in some time, stating that it was stabilizing and that we could see signs of a recovery by the end of the year. Australia’s central bank governor Stevens said that the economy should start pulling out of its worst recession in more than six decades later this year. His comments followed those by World Bank President’s assessment that the global downturn was fading and growth could resume this year or next.

The comments helped restore market confidence, dented recently by deeper-than-expected first-quarter declines in U.S. and euro zone economies.

The euro was up about 0.5% to 1.3558 against the greenback on Monday and 130.71 against the yen on higher share prices that supported expectations that the worst has passed in the global recession. Australian dollar climbed to 73.85 against the yen.

Investors will look at US house starts and building permits for confirmation about the prospects of an economic recovery.

Good Day

Emman Xuereb
RTFX Ltd
Head Office

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