FOREX-Dollar ekes out gains in ultra-thin holiday trade

Reuters: [2008-05-26 11:56:00]

(Changes dateline, byline, adds comment, updates prices)

By Jamie McGeever

LONDON, May 26 (Reuters) - The dollar held its ground on Monday, taking advantage of the ultra-thin volumes owing to U.S. and UK market holidays to arrest its decline of the last three weeks and eke out slender gains against a basket of major currencies.

"This is only due to the iliquid markets," said Carole Laulhere, currency strategist at Societe Generale in Paris.

"The dollar should stay quite vulnerable this week. We still have record oil prices, which is negative for the dollar, and U.S. equity markets are worsening, which is also a concern for the greenback."

Crude oil has soared almost 40 percent so far this year -- over 17 percent in May alone -- to record levels above $135 a barrel <CLc1>. This is fanning fears over the ability of U.S. consumers and businesses to weather the credit- and housing market-led economic storm and prevent the economy from sliding into full-blown recession.

The dollar index hit a one-month low last Thursday, and the S&P 500 equity index posted its biggest one-week decline since early February.

Deteriorating equity markets and rampant oil prices -- which provide the backdrop for the latest euro zone consumer price inflation figures this week -- should be the focus for currency investors this week, Laulhere said.

At 0930 GMT the dollar index was up a slender 0.1 percent on the day at 72.065 <.DXY>, but still within sight of one-month lows of 71.823 struck last week.

The euro was at $1.5745 <EUR=>, down 0.1 percent from late U.S. trading on Friday but less than three cents from its all-time highs above $1.60 last month.

The dollar was also up 0.1 percent on the day against the Japanese yen at 103.45 yen <JPY=>.

A 2.3 percent fall in Tokyo stocks -- the steepest in six weeks -- had prompted investors to unwind yield-seeking carry trades, pushing the dollar to the day's low around 103.15 yen before bids at 103 yen and just below provided solid support.

INFLATION DATA IN FOCUS

There are no major economic data reports due for release on Monday. Financial markets in the United States and the UK are closed for Memorial Day and a bank holiday, respectively, although European markets are open.

Among the main data points this week will be the flash estimate for May euro zone CPI on Friday. A Reuters poll of economists points to an uptick in the annual inflation rate to 3.5 percent from 3.3 percent, well above the European Central Bank's target of close to but just below 2 percent.

Investors also await a raft of U.S. data and speeches from top Federal Reserve officials, including Chairman Ben Bernanke on Thursday, for more clues about the direction of interest rates.

The personal consumption expenditures index for April is due on Friday. It includes the core PCE price index, which excludes food and energy costs and is one of the Fed's favourite measures of inflation.

Other key economic reports due this week include the National Association of Purchasing Management-Chicago business barometer for May, and April new home sales.

The ECB's hawkish talk has seen markets shift dramatically in recent weeks to now fully price in a quarter point rate hike to 4.25 percent by October, BNP Paribas strategists noted.

While fed funds futures are almost fully pricing in a similar rate hike from the Fed by the end of the year to 2.25 percent, deteriorating economic conditions might prompt a rethink.

"The dollar is likely to trade on the soft side unless the market decides to unwind its risk-taking positions on heightened risk aversion," BNP Paribas said in a client note. (Editing by Stephen Nisbet) ((Reuters Messaging: jamie.mcgeever.reuters.com@reuters.net; +44 207 542 8510))

ANALYSIS: (THA) Q1 GDP within expectations

Reuters: [2008-05-26 10:29:00]

    
(THA) Thai Q1 GDP rose 6.0%, close to our expectations of 5.9% growth. This
compares to full-year 2007 growth of 4.8% and Q407's 5.7%. The breakdown
signaled robust private consumption which grew 2.6% y/y - a year's high, whilst
investment spending roared ahead to rise 5.4% compared to year ago, thus
shoring overall growth.
           
Rising food and oil prices have apparently not impinged on consumption to a
great extent, though some softening will be noticeable in the next two
quarters. Meanwhile, the pro-business and growth-oriented mandate saw the
government dole out stimulus packages worth THB 400bn earlier this year. Along
with positive boost to consumption, the spending appears to have propped up
pent-up private spending as well. Overall, the growth report card reflected a
more broad-based recovery though risks of political stability and recession
fears in the US linger in the background. Whilst growth appears supported,
rising inflation will keep the BoT on tenterhooks in the months ahead, We still
assign small chance to a rate hike this year though overnight hawkish
statements by the central bank raises the probability of tighter policy bias if
rising commodity prices push the core and headline reading beyond tolerance
levels. USD/THB trade meanwhile remained supported above the 32.00 mark at the
start of the week in line with regional momentum. Expect the pair to gain
gradually towards first tech resistance at 32.60 on multi-session basis, with
the BoT likely to step in to temper the pace intermittently. 
           
Should you have questions about IDEAglobal's research or you would like further
details on the products then please contact us on the following e-mail
address:fx@ideaglobal.com / asia@ideaglobal.com
      

Slovakia - Factors To Watch on May 26

Reuters: [2008-05-26 09:07:00]

    BRATISLAVA, May 26 (Reuters) - Here are news stories, press 
reports and events to watch which may affect Slovak financial 
markets on Monday. 
     
    STATE BOND AUCTION 
    The finance ministry's Debt and Liquidity Management Agency 
(ARDAL) will auction a 18-year, 4.5 percent-coupon, state bond. 
     
    C.BANK SAYS PACE OF CROWN FIRMING SURPRISING 
    A rise in the Slovak crown helps to tame inflation but a 
strong currency also hurts exporters and curbs economic growth, 
Slovak central bank Governor Ivan Sramko was quoted on Monday as 
saying. 
    [ID:nL26202873] [RTRS-MMT-FRX-EUR-SK] 
     
    CROWN HITS FRESH RECORD HIGH 31.101 VS EURO 
    The Slovak crown rose to a fresh all-time high of 31.101 to 
the euro on Friday morning on investors' expectations that the 
country would seek a strong conversion rate for swapping the 
crown for the euro next year. 
    [ID:nL23548138] [RTRS-MMT-FRX-EUR-SK] 
     
    CBANK FOREX RESERVES RISE TO $19.9 BLN 
    The Slovak central bank's (NBS) foreign currency reserves 
rose to $19.933 billion on May 21 from $19.712 billion on May 
14, the bank said on Friday. 
    [ID:nL23886951] [RTRS-MMT-FRX-CEN-SK] 
     
    PRESS DIGEST 
    ------------ 
    CONVERSION RATE 
    The conversion rate for euro adoption is expected to be 
30.70 <EURSKK=>, a survey by an association of bank and 
think-tank analysts showed. Analysts said 29.70 crowns per euro 
was the theoretically optimal exchange rate for the economy. 
    Sme, page 6  
     
    NUCLEAR PLANT SHUTDOWN 
    Slovakia will shut down the second block of its oldest 
nuclear power plant in Jaslovske Bohunice as originally agreed 
with the European Union despite Prime Minister Robert Fico's 
call for a delay, Energy Commissioner office said. 
    Hospodarske Noviny, page 1 
     
    HEALTHCARE DEBT 
    Debt of Slovak hospitals reached 6 billion crowns last year 
and it will continue to rising this year, Healthcare minister 
Ivan Valentovic said. 
    Hospodarske Noviny, page 2 
     
    ELECTRICITY IMPORTS 
    Ukraine is ready to start exporting electricity to Slovakia 
next year, Ukraine President Viktor Yushchenko said after a 
meeting with Slovak Foreign Minister Jan Kubis. 
    Hospodarske Noviny, page 4 
     
    GAMBLING UP 24.5 PCT 
    Slovaks spent almost 54 billion crowns ($2.73 billion) on 
gambling last year, up from 39.9 billion crowns in 2006. 
    Pravda, page 3 
     
    EX-FIRST LADY DIES 
    Irena Schusterova, the wife of former President Rudolf 
Schuster, died on Saturday after a sudden heart attack. 
    Pravda, page 2 
     
    Reuters has not verified the media reports, nor does it 
vouch for their accuracy 
     
    News editor of the day: Peter Laca, +421 2 5341 8402; fax 
+421 2 5341 8403 
    E-mail: editorial@reuters.sk 
     
    For real-time index quotes, double click in brackets: 
    Warsaw WIG20 <.WIG20>  Budapest BUX <.BUX>  Prague PX50 
<.PX50> 
 Other related news: 
 Slovak equities      [SK-E]  E.Europe equities           [.CEE] 
 Slovak money         [SK-M]  Czech debt                  [CZ-D] 
 Slovak Indicators  [SK-ECI]  Emerging forex          [EMRG/FRX] 
 Eastern European     [EEU]   All emerging markets        [EMRG] 
 Hot stocks           [HOT]   Stock markets                [STX] 
 Market debt news     [DBT]   Forex news                   [FRX] 
 TOP NEWS -- Emerging markets                         [TOP/EMRG] 
 TOP NEWS -- Convergence watch                        [TOP/EAST] 
 ((Compiled by Martin Santa; Bratislava Newsroom; Email: 
editorial@reuters.sk; +421-2-5341-8402)) 
 ($1=19.75 Slovak Crown) 
  Keywords: SLOVAKIA FACTORS/ 
    

EURO GOVT-Bonds open lower with T-Notes in thin trading

Reuters: [2008-05-26 08:12:00]

LONDON, May 26 (Reuters) - Euro zone government bond futures opened lower on Monday with softer U.S. Treasuries, but volumes were expected to be less than half normal levels due to market holidays in the UK and United States.

No major data from the euro zone is due to be released during the session.

On Friday, euro zone government bond yields eased after soaring during the week to multi-month peaks as investors squared up positions and readied for the long weekend.

At 0607 GMT, the June Bund future <FGBLc1> was down 10 ticks on the day at 112.96, having opened at 113.01.

The interest rate-sensitive two-year Schatz yield <EU2YT=RR> was up 1.4 basis points at 4.221 percent. ((Reporting by George Matlock; george.matlock@reuters.com; Reuters Messaging: george.matlock.reuters.com@reuters.net; +44 20 7542 2508; editing by David Stamp))

Keywords: MARKETS BONDS EURO

Shanghai copper rallies, LME closed for holiday

Reuters: [2008-05-26 03:20:00]

               Shanghai       LME market holiday 
              Now    Close      Now      Close 
Copper      62900   62310              8180.00 
 Aluminium   19140   19030              3001.00 
 Zinc        18020   17800              2145.00 
 ---------------------------------------------------------- 
                     MAY 26 
                  In the news 
> Mexican miners set 24-hour strike for Monday      [nN25312991] 
> Chile El Teniente to reopen after two days shut   [nN25312867] 
> Noncommercial longs in U.S. copper, gold up 20 pct[nN23287593] 
> Gold ends firmer on oil gains, bargain hunting    [nL23437514] 
> Copper, aluminium steady; nickel up from 2-yr low [nL23724389] 
> US copper futures end up in rebound from 2-mth low[nN23516794] 
 ---------------------------------------------------------- 
 * Shanghai August copper <SCFQ8> opened at 62,900 yuan at 0101 
GMT on Monday, up from 62,310 yuan ($8,977) at the previous 
close, supported by near 6,000-tonne fall in weekly Shanghai 
stocks <0#SGH-STOCKS>. 
 * Supply disruptions and labour unrest support. Landslides in 
Chile forced Codelco to close its El Teniente operations for two 
days when an access road was blocked, while in Mexico, miners 
planned a 1-day strike on Monday after the labour ministry failed 
to confirm the re-election of Napoleon Gomez as union leader. 
 * London Metal Exchange copper <MCU3> ended higher at $8,180 on 
Friday and in after-hours dealing added another $55 to $8,235. 
Market shut for public holiday on Monday. U.S. also out for 
Memorial Day . 
 * The net long, or bullish, position held by noncommercial 
investors in U.S. copper and gold futures jumped by around 20 
percent each in the week to May 20. 
 ($1=6.941 Yuan) 
 (Reporting by Nick Trevethan; Editing by Alan Raybould) 
 ((nicholas.trevethan@reuters.com; +65 6870 3822; Reuters 
Messaging: nicholas.trevethan.reuters.com@reuters.net)) 
 Reuters 3000Xtra subscribers can access Metals Production 
Database by clicking on URL below 
 http://mpd.session.rservices.com 
 For related news and prices, click on the codes in brackets: 
 LME price overview      <RING=>   LME aluminium        <0#MAL:> 
 LME copper             <0#MCU:>   Asia physicals   <BASE/ASIA1> 
 COMEX copper futures    <0#HG:>   Europe physicals    <BASE/EU> 
 TOCOM aluminium        <0#JAL:>   Shanghai copper      <0#SCF:> 
 Shanghai aluminium     <0#SAF:> 
 Scrap metal prices     <BASEU3> 
 Base/minor metals news    [MET]   All metals news         [MTL] 
 Metals summary     [GLANCE/MTL]   Scrap metals news [SCRAP/EUR] 
 Index of summaries    [GLANCE/]   All commodities news      [C] 
 Metals diary        [MTL/DIARY]   Weather news            [WEA] 
 Foreign exchange rates   <FX=S> 
 SPEED GUIDES <COMMODS> 
 <METAL1> <BASE/FUT1> <BASE/CASH1> <BASE/OPT1> 
 <LME/OPT1> <LME/FUT1> <LME/BROKER1> <LME/INFO1> <REUTERS> 
Keywords: MARKETS METALS/