ecPulse

The shared currency has grabbed market's attention due to the expectations predicted that the ECB is to raise the interest rates during the week after the European finance ministers authorized an 8.7 billion euro ($12.7 billion) loan payout to Greece, so the Euro currency has reached to the highest level in three week versus the dollar.  On the other hand, the Japanese currency (Yen) fell against the major counterparts as the Asian stock market rallied during the first day of the week, pushed investors to turn their investments to the stock exchange markets.  Moreover, the Australian dollar is witnessing some incline movements against the dollar before the Australian report that will show the retail sales in Australia increased and the building approvals improved more than a previous month. 

Australia's retail sales index has dropped by 0.6% during the month of May, compared with a previous reading that inclined to 1.1%, which was revised to 1.2%, while the expectations referred to 0.3%. 

Australian ANZ job advertisements increased to 3.7% during the month of June, compared with a previous reading of -6.5% in May. 

German retail sales dropped in the month of May by -2.8%, compared with the flat revised reading in April from 0.6% rise, while markets were expecting a rise of 0.2%. Meanwhile the index rose on the yearly by 2.2% from the revised 3.7% but above expectations of 0.2%.

Japan's housing starts index accelerated by 6.4% during the month of May, compared with a prior incline of 0.3% in April, while the actual reading came higher that analysts' expectations that forecasted of 3.1%.  Annualized housing starts recorded 0.815 million unit during the year ended May, compared with a previous 0.798 million unit a year earlier, while the anticipations estimated of 0.790 unit. Moreover, annualized construction orders in Japan came out at 25.5%, from 31.4% a year earlier. 

Today, the Asian major currencies rebounded against the US dollar for the first time in a week after the US personal income and spending indexes came lower than both the previous and the market expectations.  However, the investors turned to buy high yielding currencies after Greece announced that it will avoid defaulting on its debt, increasing the demand for Australian dollar and the New Zealand dollar. 

After a period of speculation over the probability for Finland’s new parliament to block Portugal’s aid package came to an end as the nation will back the bailout as far as Portugal agrees to the conditions of the bailout including asset sales. Finance Minister Jyrki Katainen told reporters yesterday that Portugal who needs the agreement of all the 17-euro members to acquire the bailout must also start seeking private investors to ensure that the funds will stay in the country before the bailout can be made. As for the parliament that was the matter of debate and speculation after the serge in euro-skeptic parties, an agreement has been made as well. Katainen who leads the parliament’s biggest party after the elections said “we have reached a common understanding” as he held talks with the Social Democrats the second-largest group since the vote. The initial understanding between parties comes as Katainen struggled to attain this consensus ahead of the EU meeting on May 16...

The Bank of England’s Monetary Policy Committee today voted to maintain the official Bank Rate paid on commercial reserves steady at 0.5%, and they also voted to maintain the Asset Purchase Facility financed by the issuance of central bank reserves at €200 billion as expected in the market. The market will be waiting upon the new projections in the May Inflation Report next week on Wednesday on May 11, 2011. The minutes of the meeting will be release on Wednesday May 18, 2011.

The Spanish BBVA SA reported on Thursday a drop of 7.3% in net profit on the year in the first quarter, posting 1.15 billion euros down from 1.24 billion euro a year earlier. Net interest income was 3.18 billion euro down 6.2% from last year’s 3.39 billion euros. The non-performing loan ration at the end of the quarter was 4.1% down from 4.3% the first quarter of 2010 and in Spain the ration was 4.8% from 4.9% a year earlier. The core capital with the end of the quarter was 8.9% rising from 8.1% the same period a year ago. 

The United Kingdom continues to provide more details into the slowing pace of the recovery. Today’s data confirmed the slowing pace with the easing expansion in the economy’s biggest sector and contributor to growth. The CIPS Services PMI slowed in April to 54.3 from 57.1 and also fell below forecasts of 56.0. The slowing services sector follows the easing expansion in construction and manufacturing PMI indices for April. The economy expanded 0.5% in the first three months and data since then has been downbeat confirming the BoE’s view and the steady monetary policy.