Trade figures for Japan came in weaker with merchandise trade showing sharp annualized declines in exports and imports. Meanwhile, the OECD revised its estimates on contraction and lowered outlook for Japan and Europe, hampering prospects for a quick economic recovery.
[B]Fundamental Headlines[/B]
• [I]GM Plans More Job Cuts[/I]– Wall Street Journal
• [I]OECD sees strongest outlook since 2007[/I]– Financial Times
• [I]ECB pumps record €442bn into system[/I]– Financial Times
• [I]Citigroup Said to Raise Base Salaries by Up to 50% After Bonuses Reduced [/I]– Bloomberg
• [I]U.K. Said to Push Bank Restructuring to Isolate Investment Bank Divisions[/I] – Bloomberg
[B]EURUSD[/B] – Euro-Zone current account posted an improvement for the fifth month in seasonally adjusted data with the deficit narrowing to 5.9 billion from 7.0 billion in March. Also coming in better, tradable goods posted a positive balance for the first time in six months. Partially responsible for the improvement in current account are contraction in flows. Data on outflows showed the measure falling 2.7% and at a faster pace than declines in inflows in the past five months. Also released today, the OECD made uplifting revisions to global contraction estimates in 2009 and growth in the following year due to improved estimated for the U.S… At the same time, the group lowered its forecast on European nations. The euro-zone is now expected to contract 4.8% this year with no growth in the following year while Germany, the largest economy in the region, saw its GDP forecast worsen to a 6.1% contraction from a 5.3% pace. Discuss the topic and your trade ideas in the EUR/USD Forum.
[B]USDJPY [/B]– Trade figures for Japan came in weaker with merchandise trade showing sharp annualized declines in exports and imports. Exports fell 40.9% in May from a year ago while imports contracted 42.4% from a 35.8% pace in April. Monthly change showed imports posting a contraction of 3.6% while exports fell slightly by 0.3%. Overall, the measure came in higher ¥210.0B from ¥67.7 while falling short of the Bloomberg forecast of ¥299.8B. Recovery in trade remains vital to Japan’s quick emergence from recession as the world’s second largest economy remains heavily dependent on exports to the U.S. and China. The figures today show clear domestic weakness despite improvements in global trade. Rising industrial production in April has led some analysts to believe the nation will grow as early as the coming quarter. At the same time, BoJ governor Shirakawa has expressed a more cautious outlook on recovery with today’s releases supporting that notion. Discuss the topic and your trade ideas in the USD/JPY Forum.
