[B]Market Review [/B]- 04/11/2013 [I]21:33GMT [/I]
[B]Euro rebound fom 6-week low on short-covering[/B]
The single currency finally cut 6 consecutve days of losses and rebounded from a fresh 6-week low on Monday. Earier in Asia, although euro penetrated Friday’s low at 1.3478 after meeting renewed selling at 1.3502 and fell to 1.3442 in thin Asia session lunch session after tripping stops below 1.3462, profit-taking together with active short-covering lifted the pair. Euro ratcheted higher in European session on stronger-than-expected Germany’s manufacturing PMI and later climbed to a session high at 1.3525 in New York afternoon.
The British pound strengthened on Monday after the release of strong U.K. construction PMI data which showed that activity in the U.K. construction sector expanded at the fastest rate in six years in October continued to support demand for sterling. U.K. construction PMI in October came in at 59.4, stronger than the forecast of 58.7.
Although cable dropped in tandem with euro to a session low at 1.5904 in Asian trading, buying interest there lifted price and cable continued to climb higher in European session after the release of strong U.K. construction PMI. The pound then rose to intra-day high of 1.5979 in New York morning before stabilizing.
Versus Japanese yen, the greenback firmed to intra-day high at 98.85 in quiet Asian trading as financial markets in Japan were closed for a national holiday, however, failure to penetrate last Friday’s top at 98.86 prompted long liquidation. Dollar edged lower in European session and later weakened to a session low at 98.57 in New York afternoon.
In other news, the president of St. Louis Federal Reverse James Bullard said 'bond buying is data dependent, policy-makers will look at the evidence at every meeting; labor markets have made substantial progress, but inflation is low; not seen much evidence on inflation heading higher; “what is the hurry” to decide on tapering, would like to see inflation heading to 2%; ‘asset bubbles are a serious concern, but not seeing anything of magnitude of housing bubble; Fed does not want to be in position of supporting fiscal recklessness; recent rise in bond yields has eased his concern that bond market showing bubble characteristics.’
Governor of Federal Reserve Jerome H. Powell said 'U.S. monetary policy is likely to remain highly accommodative for some time; timing of when Fed will trim pace of bond buying is necessarily uncertain, depends on evolution of economy; Fed policy makers committed to communicating as clearly as possible about policy aims, intentions.’
On the data front, euro zone Sentix investor confidence in November came in at 9.3, better than the expectation of 6.2. U.S. factory orders in September came in at 1.7%, same as expectation.
[B]Data to be released on Tuesday : [/B]
China HSBC Markit service PMI, Australia RBA rate decision, Swiss CPI, U.K. BRC retail sales, service PMI, EU PPI, U.S. Redbook retail sales,
Construction spending, New home sales,
ISM non-manufacturing index.