Currencies

• EUR/USD The dollar fell toward a 15-month low against the euro on speculation the Federal Reserve will trail behind the European Central Bank in raising interest rates.
  • The European Central Bank last week raised its main refinancing rate to 1.25 percent from a record-low 1 percent and another rate increase seems inevitable.
  • The dollar fell to $1.4498 as of 6:28 a.m. in London from $1.4443 in New York yesterday.


• USD/JPY The early gap down in the Nikkei and not as aggressive as expected tightening by MAS saw more long liquidation in the JPY crosses.
  • Specs also gunned for downside USD/JPY stops. From 83.93, USD/JPY fell to support in the 83.40-50 window. The break below saw stops tripped and a low of 83.20.


• GBP/USD The pair opened the Asian session at 1.6270 after the GBP outperformed the EUR on Tuesday due to better than expected UK employment data (from 8% to 7.8%).
  • The GBP/USD fell to 1.6255 in early Asian when the USD and JPY moved higher across the board when Asian equity markets moved around 0.5% lower on average.

Commodities

• GOLD may increase on speculation that inflation pressures will continue to build up, fueling demand for precious metals as an alternative investment.
  • There's a risk of U.S. inflation getting out of control, Federal Reserve Bank of Dallas President Richard Fisher wrote in the German newspaper Handelsblatt.
  • Immediate-delivery bullion climbed as much as 0.2 percent to $1,459.80 an ounce and traded at $1,458.95 an ounce at 12:01 p.m. in Singapore.
  • Gold for June delivery in New York increased 0.3 percent to $1,459.80 an ounce.


• Oil rose for a second day in New York after a U.S. government report showed gasoline supplies plunged the most in 12 years, increasing speculation demand is rising in the world's biggest crude-consuming nation.
  • Futures advanced as much as 0.4 percent after the Energy Department said yesterday that stockpiles fell 7 million barrels last week to 209.7 million, the biggest drop since Oct. 9, 1998.
  • Crude for May delivery rose as much as 45 cents to $107.56 a barrel and was at $107.47 in electronic trading on the New York Mercantile Exchange at 1:30 p.m. Singapore time.

Equities

• U.S. Stock indices drifted slightly higher Wednesday as investors parsed President Obama's plan to cut the deficit and remained wary about the earnings power of major banks.
  • The Standard & Poor's 500 index snapped a four-day slump as it eked out a 0.25-point gain, or less than 1%, to 1314.41.
  • The Dow Jones Industrial Average rose 7.41 points, or 0.1%, to 12270.99.


• Asian stocks Asian stocks increased, erasing earlier declines.
  • Japan's Nikkei 225 Stock Average gained 0.2 percent today.
  • Hong Kong's Hang Seng Index slid 0.5 percent, while China's Shanghai Stock Exchange Composite Index climbed 0.2 percent.


• European Markets gained, rebounding from their biggest drop in four weeks, as the region's factory output rose and JPMorgan Chase & Co. reported record profit.
  • The big bank reported a 67% jump in quarterly profit.
  • The U.K.'s FTSE 100 Index and France's CAC 40 Index advanced 0.8 percent, while Germany's DAX Index climbed 1.1 percent.

Sources: Bloomberg, FT