G20 Has Come And Gone, US Dollar Rallies

The G20 has come and gone.  The communique did not mention forex rates -specifically at least (see views on the communique by clicking here).  Afterwards, a Russian official was said to have given non-confrontational remarks about their intention to buy US treasuries. This seems to have carried the most weight post meeting.  Last week, they ceremoniously announced their intention to sell $10 B US treasuries in favor of IMF bonds.

Today the quarterly Eurozone employment report came out -0.8%.  This was the largest decline on record.  This helped pressure the EUR/USD which has moved to new lows in early NY trading.

In the US today, the Empire Manufacturing Index for June will be released.  The expectation is the index to remain steady at -4.60 versus -4.55 last month.  The index has been negative for 13 straight months.  However, it is well off the low of -38.23 in March.

Also out in the US is the Net Long Term TIC Flows.  This is a measure of the difference in value between foreign long-term securities purchased by US citizens and US long-term securities purchased by foreigners.  With higher debt requirements the worry in the US is there will not be the demand for our debt - in fact, there may be a reluctance to purchase debt.  So although the number is for the month of April and therefore not a current indication of demand, it will be eyed going forward for signs of US aversion.  If the number is smaller than expectation it could be negative for the US dollar.

The Canada Manufacturing Shipments for the month of April is expected to show a -1.7% decline for the month. Last month the index fell by -2.7%.  It has been down 7 of the last 8 months as demand  Last months level of sunk the level of shipments to the lowest level since 1999.    The decline was sharply lower than the _+1.0% expectation.The decline is largely influence by the auto industry.  Canadian companies provide a lot of parts to US auto makers.

Subscribe by RSS Subscribe by Email