The USD continues to fall, but a high CPI reading may provide support.

Overnight News Bullets

• GE CPI MoM/YoY (Mar F) out at 0.3%/1.9% as expected.
• NO Trade Balance (Mar) out at 27.2B vs. 25.9B expected.
• UK UK PPI Input out at 1.2% vs. 0.9% exp. PPI Output out at 0.6% vs. 0.3% exp. PPI Output Core out at 0.4% vs. 0.3% exp.
• UK DCLG House Prices (Feb) out at 12.1% vs. 11.3% expected.
• E-Z CPI MoM/YoY (Mar) out at 0.7%/1.9% vs. 0.6%/1.9% expected. Core CPI at 1.9% as expected.
• CA New Motor Vehicle Sales MoM (Feb) out at -3.7% vs. -4.0% expected.
• US Advance Retail Sales (Mar) out at 0.7% vs. 0.6% expected. Retail Sales Less Autos at 0.8% vs. 0.9% expected.
• US Empire Manufacturing (Apr) out at 3.8 vs. 7.5 expected.
• US Total Net-term TIC Flows (Feb) out at $58.1B vs. $75.0B expected. Total Net TIC Flows at $94.5B vs. $74.6B prior.
• US Business Inventories (Feb) out at 0.3% as expected.
• US NAHB Housing Market Index (Apr) out at 33 vs. 35 expected.
• JN Consumer Confidence (Mar) out at 47.2 vs. 47.8 expected.

Markets

• FX: GBP in focus on important data. EURUSD rejected at 1.3577.
• Fixed Income: Bunds coming back slightly, 10yrs unchanged. JGB??™s a tad higher o/n.
• Stocks: Solid gains in both Europe and the US. Nikkei down 0.6%.
• Commodities: Gold rose y??™day, Silver steady. Oil dropped 1.4$ y??™day but has come back o/n.

O/N Data Heat map:

Calendar

Today's Highlights:

This and Next Week??™s Highlights:

What's going on?

• US homes in foreclosure has doubled since Q1 last year, but mortgage related shares were supported by Sallie Mae buy-out and a bounce from the lows.
• US CPI figures today could dramatically change the outlook for the US economy. Stocks are clearly positioned for a low or ???in-line??? reading.
• USDCHF and USDJPY most likely to move on CPI figures today, but keep an eye on housing figures as well??¦

FX