We expect USD-related crosses to be range bound ahead of Bernanke's speech later today, and GBP-strength to continue. Stocks are set to go higher on back of strong gains in metals, especially copper.

Overnight News Bullets

• Swiss Unemployment Rate (Mar) out at 3.0% vs. 3.1% expected.
• Japanese Machine Tool Orders (Mar P) out at 9.5% vs. 16.5% previously.
• German Trade Balance (Feb) out at 14.2B vs. 15.0B expected.
• Australian Foreign Reserves (Mar) out at A$71.3B vs. A$68.2B expected.
• French Industrial Production Mom (Feb) out at 1.1% vs. 0.6% expected.
• French Manufacturing Production MoM (Feb) out at 1.4% vs. 0.7% expected.
• Norwegian CPI MoM (Mar) out at 0.6% vs. 0.4% expected.
• Norwegian CPI Underlying MoM (Mar) out at 0.7% vs. 0.4% expected.
• Norwegian PPI Incl. Oil MoM (Mar) out at 1.8% vs. 1.5% previously.
• US ABC Consumer Confidence out at -7 vs. -5 previously.
• DOE Short-Term Crude Outlook (Apr) out at 63.83 vs. 63.75 previously.
• Japanese Machine Orders MoM (Feb) out at -5.2% vs. -0.4% expected.
• Japanese Money Supply, Liquidity and Bank Lending figures generally a tad lower than expected.
• Japanese Current Account Total (Feb) out at 2417.5B vs. 2303B expected.
• Australian Home Loans (Feb) out at 0.3% as expected.
• Australian Investment Lending (Feb) out at 8.9% vs. 2.7% previously.
• Japanese Bankruptcies YoY (Mar) out at -0.6% vs. 5.5% previously.

Markets

• FX: USD taking another beating and EURUSD was making new highs again (1.3456).
• Fixed Income: Bouncing back, higher. Especially JGB??™s.
• Stocks: Europe around 0.5% higher. US modestly higher. Nikkei about unchanged. 
• Commodities: Copper still higher. Precious metals edging higher. Oil consolidating.
   

O/N Data Heat map:

Calendar

Today's Highlights:

This and Next Week??™s Highlights:

What's going on?

• FOMC Minutes released tonight. We expect them to guide the market higher in rate expectations (i.e. ruling out a cut in the near future). Inflation is still a great concern and the labor market is too tight to price in a Fed??™s Funds Rate of 5.02% by December.
• Stocks likely to pound higher. European indices are above their pre-correction levels and the US stocks are likely to follow-through. US indicators are very strong and there is still no sign that the housing deteriotation is spilling over to the broad economy.
• A story out from the UK that might explain the current strength of the GBP: They are planning to make the UK tax system more competitive by allowing UK corporates to take home foreign profits tax-free. The effect might be parallel to the Home Investment Act from the US in 2004-2005, which was supporting the USD.

FX