- German March jobless rose +69k (worse than median forecast of +52k) Unemployment rate ticked up to 8.1% (vs median forecast of 8.0%)
- Bk of Spain Governor: May be necessary to restructure some small/medium sized Spanish banks if crisis drags on
- OECD: World economy to shrink -4.3% in 2009. OECD calls on ECB to cut rates further and to move to quantitative ease
- Euro-zone CPI estimate (Mar) +0.6% y/y vs +1.2% in February, and vs median forecast of +0.7%.
The European session has seen a continuation of the trend seen overnight in Asia, namely a weaker USD and JPY. Risk sentiment has improved a little with European stocks and U.S stock futures posting gains. News of a new Japanese stimulus package has helped in that regard. There’s also probably some month-end/quarter end window dressing going on in equity markets.
The JPY is also being underminned by the proximity of tomorrows Tankan report which is expected to make for grim reading. Also year-end repatraition demand for the JPY is said to have dried up.
The USD isn’t being helped by renewed speculation regarding its reserve currency status. A source at the BOJ overnight raised the spectre of the IMF raising funds through issuing SDRbonds, which China would buy to the tune of about $250 bln equivalent.
Talk of month end demand for euro, cable, AUD and CAD (JPY sell interest) related to equity market end of month accounting. More expected at 16:00 BST fix.
Talk of sell orders in EUR/USD up at 1.3310. Talk of Bank of China protecting barrier option at 131.00 in EUR/JPY.