Friday, May 15, 2015

Dollar mixed as soft PPI outweighs falling jobless claims

     Dollar mixed as soft PPI outweighs falling jobless claims
    Jobless claims hit the lowest level in 15 years, but the market focused on a soft PPI report for April and the dollar was mixed vs G10 currencies, lower vs EM
    Fed funds futures shifting from 1st hike in Sep to Dec

     Bunds rate disadvantage is lessening; EUR strengthening
    As Euro bond sell-off continues while US front end gains, Bunds’ rate disadvantage is narrowing and EUR is gaining
    Likely to continue until ECB purchases push EUR bond yields down again
    I see improvement in labor market as most important, still expect Sep rate hike = surprise for market, USD rally

     NZD, AUD are biggest losers on commodity news
    Fonterra cuts forecast of milk output for next 12 months
    Australian mining firm to resume iron ore output as prices have recovered

     Japan PPI plunges into negative territory in April
    Consumption tax hike falls out of yoy comparison
    BoJ may do more, but will it have any effect?

     Today:

    US: Empire State index for May to improve; industrial production for April to be unchanged after March’s fall; U of M sentiment for May to tick up

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