ryuroden

Commerzbank: comments on GBP/USD British pound is strengthening versus the greenback for the 7th day in a row. It rose from $1.5820 to today’s maximum in the $1.6157 area. The bulls got even more active after the release of UK public sector net borrowing which rose from 9.9 billion pounds in February to 15.9 billion in March. The nation’s net debt reaches 66% of GDP, the highest level since the records began. Technical analysts at Commerzbank note that GBP/USD is facing resistance at $1.6165 (October 2011 maximum and 61.8% Fibonacci retracement of the decline in 2011 and 2012). In their view, sterling will recoil down from this level to support at $1.5984, $1.5874 and $1.5843 (200-day MA). If the pair managed to rise above $1.6167, it will head to $1.6425 (78.6% retracement of the move mentioned above).

Deutsche Bank: FX trade becomes more volatile According to analysts at Deutsche bank, the trade on the FX market will soon become more volatile: the time of the range-bound markets is coming to an end. Lately, currency crosses have been trading sideways despite the considerable political and economic changes. However, as history confirms, such range-bound trading periods usually don’t last long. According to Deutsche bank strategists, central banks prepare to intervene into the game (for example, Bank of Canada seems to become more hawkish, while Reserve Bank of Australia – dovish). Emerging markets will also follow a pattern: summer months tend to bring above-average return on investments. Currency strategists recommend going short on the euro, the greenback and the yen vs. the sterling, the loonie and the emerging currencies, such as Mexican peso, South Korean won and South African rand.

John Taylor: outlook for USD, EUR and JPY John Taylor, the head of currency hedge fund FX Concepts, expect US dollar to strengthen versus the single currency in the second quarter. The specialist says that “Europe’s going to be in a recession and they’re going to have to print more money and be looser, and the U.S. is going to have a stronger economy than them by quite a bit.” As for USD/JPY, Taylor thinks that the pair may weaken in the next 2-3 months as prospects for further easing from the Federal Reserve damp investor demand for the greenback: “If we do have a crisis in Europe and a little recession scare in the U.S., that might drive money back to the yen and it’ll be stronger for a couple of months before it weakens”. According to Taylor, if the Fed increased stimulus in the second half of the year, the greenback would also drop against euro.

Yen’s strengthening as a safe haven US dollar has been declining versus Japanese yen since the beginning of this week on the concerns about the battle for leadership in France and the Netherlands and its potential negative impact on the efforts to resolve the region’s debt crisis. Analysts at Rochford Capital don’t think that yen’s safe-haven status will be steadily undermined because of the Bank of Japan’s very loose monetary policy (the BOJ is expected to announce more QE on Friday after expanding bond purchases by 10 trillion yen ($123.6 billion) and set ting a 1 percent inflation goal). This week we’ll here from the United States first: the Fed will announce tomorrow the results of 2-day FOMC meeting (monetary policy statement, projections for growth, unemployment and inflation). Strategists at Bank of America Merrill Lynch see risks that economic and rate forecasts will be considered hawkish that is positive for the greenback. USD/JPY tested today 4-day minimum of 80.85. IFR Markets: “Despite the push down, Tokyo players still look to be better buyers on dips, especially sub-81.00. Granted, more stops loom below, especially sub-80.80 but a move to this level could be onerous barring more legs down in the JPY crosses.” Support levels are at 80.60 and 80.30 yen.

April 24: important economic releases At the beginning of today’s trade all eyes were for Australia: the nation’s annual inflation was at 1.6% in Q1. This is the slowest pace of CPI growth since 2009. Aussie declined versus the greenback as the market strengthened in thought that the Reserve Bank of Australia will cut its benchmark rate on Tuesday, May 1. On April 3 central bank Governor Glenn Stevens signaled he may end a 3-month pause in interest-rate cuts as soon as next month if weaker-than-forecast growth slows inflation. Data to watch today: • Great Britain: Public Sector Net Borrowing in March is forecasted to show£15.6 billion budget deficit vs. £12.9 billion deficit in February. • Canada: Canada’s Core Retail Sales in February are expected to increase by 0.8%. In January the report reflected a 0.5% decline. The BoC Governor Mark Carney in his speech may give a hint on a more hawkish monetary policy: the central bank could raise interest rates from a record 1% low sooner than expected. • U.S.: The current expectations are that the April Consumer Confidence index may reach 70.1. New Home Sales in March may increase by 321K vs. 313K in February. However, if the number of new home sales will fall, it may further indicate a slowdown in the U.S real estate market. U.S. 2-year notes auction is scheduled. • Euro zone: Spanish 3- and 6-month T-bill auction; Italian bond (CTZ, BTPei) auction.

RBS: comments on GBP/USD Analysts at RBS claim that there’s less upside for GBP/USD as Britain and the United States have very similar economies and the relative out-performance of the US economy may push GBP/USD lower over the short-term. At the same time, the specialists don’t see the potential for significant declines as the Federal Reserve is still a long way from raising interest rates. In addition, there will be more concerns about US fiscal policy later this year and into 2013. “The policy mix suggests that most of any GBP/USD declines that are seen over the coming months are likely to be given back into 2013,” the bank says. There’s significant resistance at $1.6167 (2011 maximum), while support is found at $1.5800/5900.

Netherlands' budget debate: to cut or not to cut? The tensions in Europe keep mounting: now we've got negative news from the Netherlands. The nation's political authorities didn’t manage to come to an agreement on budget cuts, making elections almost unavoidable. Diederik Samsom, head of the Labour Party, said that the elections will take place in September- October 2012. Centre-right Prime Minister Mark Rutte said on Saturday the negotiations broke down because Geert Wilders, the leader of the Party for Freedom, refused to agree to 14-16 billion euros of budget cuts indispensable to eliminate the excessive budget deficit. Wilders is strongly against the budget cuts in welfare, health and unemployment benefits. The negotiations between the political parties started after the Dutch economy entered the recession this year. According to forecasts, by the end of 2012 the Dutch budget deficit will increase to 4.6% compared with the 3.0% ceiling set by the ECB. The uncertainty over budget cuts and reforms, and the time it takes to organise elections, may lead to higher interest rates and higher yields on Dutch government bonds. If the Netherlands does not cut spending, it is likely to lose its coveted triple-A credit rating, leading to higher borrowing costs. The country may step into a lingering political crisis, hindering the euro zone’s economic rebound. On Monday Dutch government holds an emergency meeting.

Waiting for the BOJ: USD/JPY prospects Economists are almost sure that the Bank of Japan will deliver additional monetary stimulus at its meeting on April 27. Morgan Stanley: there’s “near 100% probability” of more easing this month. JPMorgan Chase: “Expectations that the BOJ will ease policy further at this week’s meeting may keep the yen weaker over the next few days. We expect the central bank to add 5 trillion yen to purchases of long-term government bonds.” Mizuho Securities and SMBC Nikko Securities: there will be more easing. CMC Markets: the recent rally in USD/JPY will continue for the rest of the year as a result of the Federal Reserve's current policy to avoid further monetary easing. “There is a very good correlation between 10-year US bond yields and USD/JPY, because when yields go up, the dollar goes up. With the Fed deciding not to continue with QE for the time being, QE will only happen if the US economy starts to fall off a cliff.” UBS: “While yen bears welcome an expansion of the BoJ's regular outright JGB buying operations or a doubling of the inflation goal to 2%, the most the BoJ may be willing to concede at this juncture would be a 10 trillion yen increase in the APP. The gradual Fed-BoJ policy divergence should serve to keep risks tilted towards a move higher towards 85 USD/JPY on a 3-month horizon. While the Fed will be in no rush to categorically rule out QE3, we maintain the case for further easing is less convincing in the US than Japan.” BNP Paribas: “A modest increase in the asset purchase target being announced next Friday, in the order of 5 trillion yen, looks to be discounted. As such, more than this may be required to see the USD/JPY rally extend. That said, any decision to increase the maturity of JGBs purchases beyond the current 1-2 years could also help support USDJPY.”

Key options expiring today Market prices tend to move towards the strike price at the time large vanilla options (ordinary put and call options) expire. It happens (all things equal) as each side of the deal seeks to hedge its risk exposure. This action is most noticeable ahead of 10 a.m. New York time when the majority of options expire (2 p.m. GMT). Here are the key options expiring today: EUR/USD: $1.2900, $1.3100, $1.3200; GBP/USD: $1.5910, $1.6000, $1.6200; EUR/GBP: 0.8175, 0.8200; USD/JPY: 80.00 (large) 81.00, 81.50 and 82.15 EUR/JPY: 105.00 (large) and 106.00; AUD/USD: $1.0300, $1.0400.

Banks' forecasts for FX majors

CFTC trader positioning data The latest Commitments of Traders (COT) report, released on Friday by the Commodity Futures Trading Commission (CFTC), showed that: • Net euro shorts rose from 101K to 118K; • Net sterling shorts down from 19K to 13K; • Net yen shorts down from 66K to 58K; • Net Swiss franc shorts up from 10K to 14K; • Net loonie longs up from 28K to 38K; • Net Aussie longs up from 39K to 48K; • Net kiwi longs up from 7K to 12K; • Net US dollar longs down by 4% to $21.65 billion. Investors continued to make big bets that the single currency, Japanese yen and Swiss franc would weaken against their US counterpart. Commodity currencies such as the Australian and Canadian dollars continued to be favored versus US dollar. Speculative investors slightly pared their anti-yen bets a little more than a week before the Bank of Japan's upcoming meeting. Anti-yen fervor increased steadily in recent weeks on rising expectations the BOJ would announce new easing measures on April 27. It’s necessary to note that the figures cited above are always a week old at the time of their release. Never the less, CFTC data gives a good oversight into how the market is positioned and if/how these positions are being unwound. Although the CME speculators represent a small fraction of trading in the currency markets, their trades are widely seen as typical of hedge fund investors' currency movements.

April 23-27: events to watch Tuesday, April 24: • Japan: 20-year JGB auction • Australia: The Q1 CPI is expected to rise by 0.8% vs. 0.0% in Q4. According to UBS analysts, the CPI data will be close enough to RBA’s forecasts to allow the central bank to trim rates by 25 bps from the current 4.25%. • Canada: Canada’s Core Retail Sales in February are expected to increase by 0.8%. In January the report reflected a 0.5% decline. The BoC Governor Mark Carney in his speech may give a hint on a more hawkish monetary policy: the central bank could raise interest rates from a record 1% low sooner than expected. • Great Britain: Public Sector Net Borrowing in March is forecasted to show£15.6 billion budget deficit vs. £12.9 billion deficit in February. • U.S.: The current expectations are that the April Consumer Confidence index may reach 70.1. New Home Sales in March may increase by 321K vs. 313K in February. However, if the number of new home sales will fall, it may further indicate a slowdown in the U.S real estate market. U.S. 2-year notes auction is scheduled. • Switzerland: The trade surplus in March is forecasted to decline to 1.99 billion Swiss francs vs. 2.68 billion surplus in February. • Euro zone: Spanish 3- and 6-month T-bill auction; Italian bond (CTZ, BTPei) auction. Wednesday, April 25: • Great Britain: The Preliminary Q1 GDP is expected to grow by 0.1%. In the Q4 2011, the GDP contracted by 0.3%. • U.S.: A bunch of important data is expected. The Federal Open Market Committee will hand down its monetary policy decision. Members have been slightly more positive on the economic outlook; however, it is still very much in the realm of “cautious optimism”. Any discussion about the prospect of more QE will be important. Core Durable Goods Orders (the de-facto gauge of business investment) are expected to increase by 0.6% in March vs. 1.8% rise in February. 5-year notes auction is scheduled. • Euro zone: Allotment of ECB three-month long-term refinancing operation. Following the April ECB rate decision in which the rate wasn’t changed at 1% Mario Draghi will speak and may refer to ECB’s plan to calm the markets including implementing LTRO 3 or resuming the SMP. According to UBS analysts, in order to lower the fears circling the euro zone debt situation, ECB's officials are speaking about the likeliness of new SMP. However, Germany is strongly against such a measure or another LTRO, so the ECB may use the strategy of cutting the interest rates. In general, the UBS analysts expect the ECB to remain more dovish than the Fed in 2012. Thursday, April 26: • Canada: The BoC Governor Mark Carney speaks. • New Zealand: The Reserve Bank of New Zealand meets on April, 26. Last month, the RNBZ Governor Alan Bollard forecasted the cash rate to remain unchanged at 2.50% for much of 2012. However, there may be a dovish slant to the statement. The deterioration of Australia's terms of trade is suggestive of New Zealand, especially given the recent sharp drop in milk prices. • U.S.: Unemployment Claims are forecasted to increase by 378K this week vs. 386K the previous week. U.S. Pending Home Sales in March may increase by 1.4% vs. a 0.5% decline in February. 7-year note auction is scheduled. • Euro zone: Italian T-bill auction. • Japan: 2-year JGB auction. Friday, April 27: • Japan: The Bank of Japan is seen as likely to ease its policy further at a meeting on April 27 after coming under intense pressure to help support the still fragile economy. There are widespread expectations that it increases its asset purchase fund by 5 trillion yen to 24 trillion yen. The Overnight Call Rate is expected to remain at 0.10%. The annualized Retail Sales in March may increase by 11.5% vs. 3.4% in February. • U.S.: The U.S. reports its preliminary estimate of Q1 GDP. Aided by government outlays (military spending and less drag from state and local governments) and strong capital spending, the GDP likely to expand by 2.6% vs. a 3.0% in Q4. • Euro zone: Italian bond (BTP) auction is scheduled. The KOF Economic Barometer, the outlook of the Swiss economy, in April may grow to 0.26 vs. previous 0.08.

NZD: Key’s comments, technical levels New Zealand’s Prime Minister John Key claimed that though the national currency’s overvalued, he wouldn't support the Reserve Bank of New Zealand intervening in the currency market. According to Key, government was doing what it can to support monetary policy by running a tight fiscal policy which removes pressure from the central bank. “Dreaming that we can somehow get the exchange rate down through intervention is la la land stuff,” said the official. From the fundamental point, kiwi may decline this week as the RBNZ is expected to keep official cash rate at the record minimum of 2.5% on Thursday. In addition, being a risk-sensitive currency New Zealand’s dollar may be affected by the renewed concerns about euro zone’s future. NZD/USD is trading today on the downside remaining in range between $0.8060 and $0.8320 within which it’s trading since the beginning of March. HSBC China PMI Index for April rose to a 2-month maximum at 49.1, though the reading below 50 still indicates contraction of the industry. Support for the pair lies at $0.8117 (March 29 minimum), $0.8091 (200-day MA), $0.8062/58 (March 15, 22 minimums), $0.8050 (38.2% Fibo retracement of the advance from November to February). Resistance is situated at $0.8198 (April 19 maximum), $0.8234/50 (April 17, 16 maximums), $0.8265 (April 3 maximum) and $0.8280/88 (April 12, March 19 maximums).

French elections: Hollande wins the first round, concerns on euro Socialist Francois Hollande won the first round of French election with 28.5% of votes versus Nicolas Sarkozy who got 27.1%. IG Markets Securities: “Hollande’s victory may mean a collapse of the ‘Merkozy’ axis and that would hamper efforts on the debt crisis.” EUR/USD may finally breach support at $1.30. Lloyds: bond yields rose last week due to the concerns that Hollande may relax the nation’s deficit-tackling policy if he’s elected. CBA: “European politics are going to come up in the next few weeks and add a lot of volatility to the euro.” French Socialists are hoping to return to the Elysée Palace for the first time in almost two decades. According to survey by the Ipsos polling firm, Hollande would beat Sarkozy by 54% to 46%. The Socialist got support from the left parties in the final round. The centrist François Bayrou remains in an influential position, but has not said yet whether he will endorse a candidate. As for Sarkozy, he will now try to attract the far-right voters by pledging to tighten border controls, tighten immigration rules and take new steps to fight crime. The next round of the election will take place on May 6.

USD/CAD down on CPI data The Canadian dollar strengthens against the U.S. dollar due to March inflation figures. CPI grew 0.3% in line with forecasts vs. 0.4% in February. Core CPI increased by 0.4%. The pair USD/CAD trades in the C$0.9922 area on Friday. This week the loonie strengthened 0.8% after the BoC Governor Mark Carney said that perhaps the economy may do without the monetary stimulus due to stronger growth and inflation. The BoC could raise interest rates from a record 1% low sooner than expected.

Gaitame.com: EUR/JPY technical Technical analysts at Gaitame.com Research Institute claim that the pair EUR/JPY may have bottomed out in the near-term as it closed yesterday above the bearish candle formed on April 13. In their view, the single currency may be heading to 109.94 (February 27 maximum). The result of such move will be the “head-and-shoulders” pattern with the top of the heat at 111.43 (March 21 maximum). If the pattern is formed, it will provide a bearish reversal signal.

Aussie's hurt by the external risks The Australian and New Zealand dollars keep declining: the resurgent concerns on the euro zone’s debt crisis switch the market into a risk-off mode. Aussie lost 0.5% this week, while kiwi fell by 1.5%. According to Nomura specialists, the market is expecting bad news out of Europe. In their view, Aussie can weaken to $1.0150 (low Jan. 9) against the greenback. The IMF and the Worlds bank officials meet in Washington on Friday to discuss Europe’s financial problems. AUD/USD is currently trading in the $1.0321 area. The pair may bounce back to $1.0400 level, the strong resistance lies at $1.0376 (200-day MA), $1.0432 (100-day MA) and $1.0479 (a 38.2% retracement from Dec.2011-Feb. 2012 move). However, if the cross breaks below the $1.0300 support, further decline towards $1.0240 (a 61.8% retracement from Dec.2011-Feb. 2012 move) in the coming sessions will be expected.

What prospects does Spain have? Analysts at Citigroup expect that Moody’s Investors Service and Standard & Poor’s will downgrade Spain, Italy, Ireland and Portugal within a year. As reasons for such assumption the specialists cite recession and continuous debt crisis. In their view, deficits will beat official forecasts this year and in 2013. Spain had to pay a yield of 5.743% to sell new 10-year bonds on Thursday (up from 5.403% in January). The auction results made the experts say that the nation’s borrowing costs are too high to be sustainable in the long term, though not high enough to trigger a near-term meltdown. Reuters poll showed only a one in four chance that Spain would need an international rescue. It seems unlikely that the increase IMF funding resources by $400 billion (249 billion pounds) which is being currently discussed in order to help bail out Spain (or Italy) will change the overall pessimism about the face of these nations which is only beginning to unfold. The sentiment will become positive in the medium and longer term only if we get improvement of economic fundamentals, reduction of the nations’ finances and secure the banking system. As this would take time (Spanish government is projecting output to shrink by 1.7%, unemployment rate’s approaching 24%) the levels of uncertainty and volatility will remain high. Renaissance Capital: “things will carry on until the government, in two years' time, has either proven that it is pursuing sufficient reforms so that the market is beginning to give it better yields or the population is out on the streets… Spain can survive if they push through the right reforms in the next couple of years.”

Analysts: trading GBP/USD According to Commerzbank analysts, the pair GBP/USD is unlikely to close the day above $1.6062/67 resistance, despite the intraday breach. The further resistance is seen at $1.6077 (high April 19), from where the cross would target $1.6170 (high Oct. 2011 and 61.8% Fib. of the 2011-2012 move). In their view, support lies at $1.5856 (low April 17), $1.5844 (55 – and 200-day MAs intersection), $1.5600 (March low) and $1.5412 (78.6% retracement seen this year). However, analysts at Societe Generale expect the sterling to strengthen against the greenback. They recommend entering the trade at $1.6000 with a stop at $1.5800 and a target of $1.6500. Britain’s monthly retail sales data in March grew by 1.8% vs. forecasted 0.4% growth and 0.8% decline in February.

EUR/USD: analyzing today’s trade German PPI rose by 0.6% in March vs. the forecast of 0.5%. The market’s now waiting for April German Ifo Business Climate index which is forecasted to decrease to 109.6 from 109.8 in March. The single currency didn’t show significant advance on the news as traders were selling “on facts”. As technical indicators remain slightly bullish one may do buying on the dips today, though no strong growth of EUR/USD is expected. It seems wise to take profit on the pair’s advance to $1.3225. ING Groep: if euro closes above resistance 50-day MA, it will be able to rise to $1.3265 (longer-term downtrend line). MACD (moving average convergence/divergence) rose above the signal line hinting on the possibility of euro’s advance. Support for the European currency is provided by the 100-day MA at $1.3120. Danske Bank: buy EUR/USD in the $1.3097 area targeting $1.3213 and stopping at $1.3024.

USD/JPY weak ahead of BoJ meeting The yen keeps weakening against most of its peers on the back of yesterdays BoJ officials’ “dovish” comments and the unexpectedly wide trade deficit. On Wednesday the BOJ Governor Masaaki Shirakawa said in the central bank is “committed” to adding monetary stimulus. Deputy Governor Kiyohiko Nishimura confirmed that the bank is ready to implement additional easing if necessary. The next BOJ meeting will be held on April, 27. Japan posted a trade deficit of 82.6 billion yen in March from a revised surplus of 29.4 billion yen in the previous month and forecasted 223.2 billion yen deficit. Mitsubishi UFJ: Markets are pricing in additional easing by the BOJ. A trade deficit is a negative catalyst for the yen. The USD/JPY trades in the 81.57 area above the daily Ichimoku cloud. The traders see resistance at 81.87 (21-day MA) and at 82.24 (Kijun-sen). A strong impulse may cause a break through 83.30 (high April 2). Support lies at 80.10 (Ichimoku cloud bottom), 79.84, 79.21 and 78.98. The cross strengthened 0.9% this week.

Economic events to watch today Data to watch today: • Europe: April German Ifo Business Climate index is forecasted to decrease to 109.6 from 109.8 in March. In addition, there will be the annual spring meeting of the International Monetary Fund/World Bank (through April 22) and the extended deadline for some Greek foreign-law bond holdouts (to tender their bonds and for second leg of debt-restructuring accord). The pair EUR/USD remains in range between $1.3050 and $1.3200. There are stops below and above these levels. • Britain: March retail sales data is expected to show an appreciable 0.4% growth after suffering a sharp decline in February. Retail sales volumes fell 0.8% in February after rising 0.3% in January and 0.7% in December. “If March retail sales do see significant growth, it will significantly boost the likelihood that overall consumer spending was positive in the first quarter and helped the overall economy return to growth after GDP contracted by 0.3% quarter-on-quarter in the fourth quarter of 2011”, analysts at IHS Global Insight say. The pair GBP/USD is rising for the fifths day in a row. Yesterday sterling reached the maximal level since November 2011 at $1.6078. • Canada: the growth pace of Core CPI may decline from 0.4% in February to 0.3% in March. The nation’s annualized headline inflation rate is expected to drop to 2.0% in March from 2.6% in February. The data will provide more information about inflationary pressures in the country's economy, and could help justify the recent hawkish tone from the Bank of Canada. The pair USD/CAD keeps trading between 0.9845 and 1.0050 within staying in this range since the end of January.

Danske Bank, MIG Bank: buy GBP/JPY Analysts at Danske Bank recommend buying British pound versus Japanese yen as the British and Japanese central banks have 2 different approaches to monetary policy: while the Bank of Japan keeps trying to weaken the national currency, the latest minutes of the Bank of England suggest that the policymakers are moving away from further easing as UK economy is performing better than expected. In addition, there are many comments from the BOJ official which are weighting yen. One should also mention that Japan posted a trade deficit of 82.6 billion yen in March from a revised surplus of 29.4 billion yen in the previous month and forecasted deficit of 223.2 billion yen. The technical picture for GBP/JPY is also optimistic enough. The pair bounced up from bullish Ichimoku Cloud and the 38.2% Fibonacci retracement from this year’s advance aiming at resistance around 133.30 yen (maximums of April 2, March 27 and 22). Analysts at MIG Bank say that if sterling gets above 133.49 yen, it will be able to follow an uptrend to 160.00 yen. The specialists say that on the downside, below 126.55, GBP/JPY will risk declining to 121.69 and 120 yen (psychological level).

Standard Chartered: on ECB and the Fed’s rates The baseline scenario of analysts at Standard Chartered is that the European Central Bank will remain on hold until the first quarter of 2014. The specialists say that if the ECB does decide to cut one more time, it will reduce borrowing costs by 25 bps by the end of June and then remain on hold for the rest of this year and in 2013. As for the United States, the bank expects disappointing data. “Weak income growth in Q1 should result in disappointing consumer spending data in Q2 which will weigh on growth. Real earnings were up just 0.2% m/m in January and February, and the increase seen in total earnings growth has been as a result of an increase in the number of people working and hours worked, rather than actual wages. There is little evidence of consumer spending being fuelled by credit growth. The decline in core durable goods reinforces the idea that the business community is reluctant to make additional capital investment.” Economists think that the Fed to announce further QE by the end of the second quarter.

EUR/USD: economic news and comments Spain and France conducted bond auctions today. Spain sold 2.54 billion euro in 2- and 10-year bonds slightly exceeding the planned volume. Borrowing costs rose as the nation’s struggling to meet deficit targets. France borrowed 8 billion euro ($10.5 billion). The yields were higher due to the risks associated with approaching French presidential election. The 10-year spread between Spanish, French, Italian bonds and German ones widened as the effects of the LTRO conducted by the ECB is fading. In the US jobless claims also posted the reading higher than expected: 386K vs. the forecast of 370K for the week to April 14. Earnings reports were more optimistic: Bank of America reported first-quarter earnings that beat expectations as well as Travelers and Verizon Communications. EUR/USD keeps trading in range between $1.3030 and $1.3210, within which it settled after the slide from $1.3380/3250 in early April. Analysts at UBS are bearish on the single currency. In their view, support for the pair lies in the $1.2974/54 zone (below these levels bearish momentum will increase), while resistance is situated at $1.3213.