London Session Recap

The fear of a surprise in the actions and rhetoric of either the Bank of England or European Central Bank, in relation to yesterday's rate decisions, never came to fruition. This has sparked a “relief rally” or sorts, though the only material benefit has come to the Euro. After all, the market seems to be foreshadowing darker days ahead for the UK and British Pound. Accordingly, the final London Session of the tumultuous week has brought a continuation of the recent reversal of downside price movement in the Euro. The US dollar has paid the price and now sits decidedly below recent highs versus most currencies, such as the Swiss Franc and Japanese Yen.

As for the market conditions, trading remains extremely volatile and directional, leaving little room for error in merciless fashion. The charts show this price movement, most notably in USDJPY. The pair dealt to highs near 103.60 and abruptly found opportunistic sellers. Perhaps led by the JPY crosses, especially GBPJPY, the Japanese Yen picked up steam. USDJPY slid to 103.40 support (New York lows) and knifed through to a climactic short-term low near 102.90. In the process, EURUSD plowed to fresh highs for the day above 1.5480. Cable did not fair as well, but held the critical 1.9500 zone after an aggressive test. The Greenback has been pressured across the board, with USDCHF slipping to 1.0425 and USDCAD dealing south of 1.0100.

The lone piece of economic data worth keeping a close watch of comes at 1100 GMT (0700 EDT). Canadian employment data will hit the market, typically accompanied with erratic price action. Traders will also be watching other markets, especially commodities and equities. A highlight of the US stock stories will undoubtedly be insurance company American International Group. As widely posted by financial media outlets, AIG reported a Q1 loss of $7.81B and has plans to raise $12.5B in the coming months. In after-hours trading, the stock was down approximately -7.4%, sparking a bearish bias to the global equity picture.

Upcoming Economic Data Releases (New York Session)

• 0700 EDT Canada - Net Change in Employment, consensus: +10.0k (relevance: high)
• 0700 EDT Canada - Unemployment Rate, consensus: 6.0% (relevance: high)
• 0830 EDT US - Mar Trade Balance, consensus: -$61.0B (relevance: medium)
• 0830 EDT Canada - Mar Intl. Mdse. Trade, consensus: CAD$4.5 (relevance: medium)

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