6/5/2009 - The current market sentiment

The optimisms momentum of equity market has been faded during today
trading giving back the greenback some of its recent loses versus the
European currencies. The greenback has suffered in the beginning of
this week across the broad from the increased risk apatite of the
investors hoping for a closer recovery from the current recession
which pushed the S&P 500 to get over this year loses closing above 900
again and also the Dow which could accelerate its gains reaching 8426
could hold these gains closing above 8400 in spite of today losing
momentum. The markets were waiting for Bernanke's testimony today but
we have not found something new as he has repeated the recent US
assessment of the fed referring to the current slower pace of
contraction and the gradual pace of economic recovery.
The European equities markets have continued following US session
losing momentum undermining the single currency. By god's will, we
wait later this week for another ECB cut by  .25% with no further
untraditional easing steps as widely expected as the same as last
meeting on the second of last month with an expected elevation of the
deflation risks over the short term. The single currency could get
benefits from this increased risk apitite versus the greenback from
last week reaching 1.3435 with the impulsive beginning of the stocks
markets this week. The single currency has been suffering from the low
level of inflation and the increased probability of deflation which
can enable ECB to cut the key interest rate in the eurozone further
and taking untraditional easing stimulation steps forward in its
current easing policy to spur the current cooled invetments by
adopting the quatitive easing policy which can be by buying eurpean
bonds for affording liquidity to the european governements to spend
further and helping the ailing economy following US which can increase
the inflation preassure as what has been mentioned by the ECB
president Jean Claude Trichet on 2 april meeting when he downplayed
the deflation risks. By god's will, we are waiting today from Eurozone
for April EU services PMI figure and it is expected to be 43.1 again
as March and the EU retail sales of March which are expected to be
increased by .1% m/m from a shrinking in Feb BY .6% and the yearly
figure is expected to be down by 2.6% from 4% falling in Feb.
The release of April ISM non-Manufacturing index has improved too to
come at 43.7 from 40.8 in March and better than the market
expectations of 42.5 following The release of April ISM Manufacturing
index which came better than expected at 40.1 helping the optimism
pace of the markets which believe currently on a slowing of the
contraction pace currently. by god's will, we wait today for the ADP
Employment changes of April which are expected to be -644k from -742k
in March as a key of the US labor report of April release by the end
of it, As the market is looking for a slower pace of lying off too as
the unemployment current pace can undermine the consuming sentiment
which have improved recently as we have seen US April US Consumer
Confidence index which was expected to go up to 29.5 from 26 in March
coming better than expected at 39.2 following the preliminary release
of April University of Michigan Confidence index which came better
than the market expectations of 58.5 at 61.9 and the final reading
came higher at 65.1 ensuring this improving by the end of last week.
Best wishes

FX Consultant
Walid Salah El Din
E-Mail: mail@fx-recommends.com
http://www.fx-recommends.com
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