Daily Forex News April 16th 2013 Risk Aversion Dominates Markets as Stocks and Gold Tumble and the Japanese Yen Rebounds: Risk aversion has dominated the markets so far this week as concern over Chinese growth triggered a selloff in global equities. Further weight was added in the US session on news of explosions at the site of the Boston Marathon. The DOW closed 1.8%, 265 points, lower at 14,599 while the S&P 500 dropped 2.3%, 36.49 points, to 1552.4. Free fall in gold continued as it reached as low as 1321.5, compared to last week's close of 1476.1 and the near 1600 level in early April. Crude oil also dropped to as low as 86.06 compared to last week's close of 90.66. In the currency markets, commodity currencies are under broad based pressure this week with NZD/JPY down 2.51%, AUD/JPY down 2.45% and CAD/JPY down 1.48% so far this week. European majors are relatively steady thus far. This morning we get consumer price index details from the euro area and the UK as well as the German ZEW index. We expect a moderate setback in ZEW expectations reflecting that sentiment and forward-looking data have become more mixed recently. In the afternoon the European Central Bank's President Mario Draghi speaks to the European Parliament on the ECB's annual report. The US session will be interesting with the release of US inflation, housing starts, building permits and industrial production. Core CPI is expected to increase by 0.2% month on month with increasing service prices as the main contributor. The fall in oil and gasoline prices are likely to influence the headline reading heavily and we believe it will come out at 0.0% month on month. Housing starts and building permits are in for an increase as housing construction tries to keep up with demand. We expect industrial production to have increased a modest 0.1%. There are also a number of potentially interesting Fed speeches (Dudley, Duke and Kocherlakota). We expect Dudley to comment on the prospects for the Quantitative Easing programme. This is of special interest as the minutes of the March Federal Open Market Committee meeting were more hawkish than expected, while the recent payroll reports should pull in the other direction.

1. Daily Forex News April 16th 2013
FCTOFX: Risk aversion has dominated the markets so far this week as
concern over Chinese growth triggered a selloff in global equities. Further
weight was added in the US session on news of explosions at the site of the
Boston Marathon. The DOW closed 1.8%, 265 points, lower at 14,599 while
the S&P 500 dropped 2.3%, 36.49 points, to 1552.4. Free fall in gold
continued as it reached as low as 1321.5, compared to last week's close of
1476.1 and the near 1600 level in early April. Crude oil also dropped to as low
as 86.06 compared to last week's close of 90.66. In the currency markets,
commodity currencies are under broad based pressure this week with
NZD/JPY down 2.51%, AUD/JPY down 2.45% and CAD/JPY down 1.48% so far
this week. European majors are relatively steady thus far.
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2. Daily Forex News April 16th 2013
Technically, the selloff in yen crosses seems to have halted. USD/JPY was
held slightly above the support level of 95.74 and recovered. EUR/JPY was
held above the 123.86 support and GBP/JPY was held above 145.91. The
recovery in the mid-Asian session suggested that the selling climax is
temporarily over and we'd expect some more upside ahead. However, it
should be noted that the Japanese yen is in near term consolidation and
thus, any upside attempt would likely be limited by last week's highs. A key
event to watch is the G20 meeting later this week to see if there are any
comments on the yen’s weakness.
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3. Daily Forex News April 16th 2013
Talking about yen, European Central Bank president Mario Draghi said that
the Bank of Japan's massive stimulus program announced earlier this month
is "determined by domestic policy considerations". Draghi emphasized
"there is no currency war." Nonetheless, it's reported that the EU will talk
about the lack of credible medium term fiscal consolidation plans in Japan
and the US. Earlier, the US Treasury urged in a report last week that Japan
must "remain oriented towards meeting respective domestic objectives
using domestic instruments and to refrain from competitive devaluation and
targeting its exchange rate for competitive purposes." Japanese officials have
reiterated that the policies were aimed at getting Japan out of deflation
rather than driving down the yen.
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4. Daily Forex News April 16th 2013
The Reserve Bank of Australia´s minutes for April’s meeting noted that "the
outlook for inflation, as currently assessed, would provide scope for further
easing should that be necessary to support demand." The central bank noted
that "recent data suggested that interest-sensitive parts of the economy
were responding to the historically low levels of rates and it remained likely
that this had further to run". Meanwhile, "the factors weighing on the
economy - including the high exchange rate, the waning growth of mining
investment, and fiscal consolidation - were likely to persist." And it
emphasized that the key issues were "what the balance of these factors
would turn out to be."
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5. Daily Forex News April 16th 2013
This morning we get consumer price index details from the euro area and the
UK as well as the German ZEW index. We expect a moderate setback in ZEW
expectations reflecting that sentiment and forward-looking data have
become more mixed recently. In the afternoon the European Central Bank's
President Mario Draghi speaks to the European Parliament on the ECB's
annual report.
The US session will be interesting with the release of US inflation, housing
starts, building permits and industrial production. Core CPI is expected to
increase by 0.2% month on month with increasing service prices as the main
contributor. The fall in oil and gasoline prices are likely to influence the
headline reading heavily and we believe it will come out at 0.0% month on
month. Housing starts and building permits are in for an increase as housing
construction tries to keep up with demand. We expect industrial production
to have increased a modest 0.1%.
For a Free 30 Day Demo of our HFT Forex Trading Software: http://bit.ly/YeAJCu

6. Daily Forex News April 16th 2013
There are also a number of potentially interesting Fed speeches (Dudley,
Duke and Kocherlakota). We expect Dudley to comment on the prospects for
the Quantitative Easing programme. This is of special interest as the minutes
of the March Federal Open Market Committee meeting were more hawkish
than expected, while the recent payroll reports should pull in the other
direction.
For a Free 30 Day Demo of our HFT Forex Trading Software: http://bit.ly/YeAJCu

7. Daily Forex News April 16th 2013
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