The USD Trade-Weighted Index is about to break support and could be headed two figures lower. Watch USDCHF and USDJPY.

Overnight News Bullets

• Swedish CPI Headline MoM (Mar) out at 0.7% as expected.
• Swedish CPI Underlying MoM (Mar) out at 0.5% vs. 0.6% expected.
• Swedish AMS Unemployment Rate (Mar) out at 4.0% as expected.
• Italian Industrial Production MoM (Feb) out at -0.5% vs. 0.6% expected.
• UK Total Trade Balance (Feb) out at -??4312 vs. -??4000 expected.
• E-Z GDP QoQ (4Q F) out at 0.9% as expected.
• E-Z Gross Fixed Cap QoQ (4Q F) out at 1.5% vs. 1.2% expected.
• ECB Rate Announcement out at 3.75% as expected.
• Trichet: Interest Rates Still Accomodative. EUR strengthening.
• Canadian New Housing Price Index MoM (Feb) out at 0.5% vs. 0.3% expected.
• US Initial Jobless Claims out at 342K vs. 320K expected.
• US Continuiong Claims out at 2527K vs. 2505K expected.
• US Import Price Index MoM (Mar) out at 1.7% vs. 0.8% expected.
• EIA Natural Gas Storage out at 23 vs. 17 expected.
• NZ Retail Sales MoM (Feb) out at 1.9% vs. 0.5% expected.
• NZ Retail Sales Ex-Auto MoM (Feb) out at 2.3% vs. 1.0% previously.
• E-Z EU25 New Car Registrations (Mar) out at -0.3% vs. -2.8% previously.

Markets

• FX: EURUSD again moving higher. JPY consolidating, looking supported.
• Fixed Income: Consolidating, waiting for US CPI and Retail Sales next week.
• Stocks: Europe modestly lower. US rejected attempt to go lower, ending the day at a strong note. Nikkey falling 1%.
• Commodities: Precious metals edging higher, but beware of JPY strength. Oil up +2 bucks.

O/N Data Heat map:

Calendar

Today's Highlights:

This and Next Week??™s Highlights:

What's going on?

• Today??™s US PPI and Trade Balance very important. The USD TWI is about to break support. A low reading in the Trade Balance would catapult the USD a lot lower.
• Fixed Income consolidating. Waiting for PPI and CPI figures to confirm Fed worries as reported in the FOMC statement.
• Stocks: Depending on the USD. Lows rejected yesterday and poised for higher levels on a weak USD.
   

FX

USDCHF to break lower