Daily Market Commentary - 18th May 2012
Daily commentary
Market participants on the tenterhooks for more information from Greece resumed their risk-selling spree early this morning. The Australian dollar, the industrialized world’s top yielding currency with a central bank rate at 3.75%, ended the day at a stone’s throw from 6-month lows against a basket of currencies. The Aussie’s late-day collapse was in concert with similar riskier-currencies, such as the euro, sterling, kiwi and loonie. Not surprisingly, safe haven currencies received the benefit of the doubt during the troubled times.
The Japanese yen rose to the top of the leader board, and appreciated by more than 1% against all its G7 counterparts. The yen’s rise was founded on yesterday robust GDP report, which showed an annualized 4.1% gain for the first quarter. These results trumped investors’ expectations which averaged at 3.5%, and were far and away better than the 0.1% gain from the preceding quarter.
The American dollar’s rise against a basket of currencies sans the yen took its cue from the buck’s safe haven appeal. In fact, the latest economic data from the world’s top economy suggested languishing employment trends and business activity. Specifically, initial unemployment claims remained perched at 370K and the Philly Fed Index fell to its worst level in 8-months.
The dearth of high-impact economic reports may keep investors jittery over Greek developments.
Key Releases
| Indicator | Actual | Forecast | Previous |
|---|
| CH Public Holiday (May) | - | ||
| JP Q1 GDP | -1.2% | -1.4% | -1.9% |
| US Leading Indicators (Apr) | -0.1% | -0.1% | -0.3% |
| US Philadelphia Fed Survey (May) | -5.8 | 10.0 | 8.5 |
