Market Update - 14 May 2013

• Sharper US Retail Trade print got market a little risk on towards 2^nd half of New York. Auto’s & Building Materials lead the strength & also gas sales fell much less than expected.

• The headline Retail Sales print was a positive & previous were revised up. We need to see further prints but if spending remains at these levels GDP forecasts on the street will definitely be revised higher. The headline print has only suffered one sub zero print since June 2012.

• USDMYR opened lower at 2.9850 on the back of some risk on appetite last night but that does not change the overall medium term Dollar strength.

• The G10s did not move much but Ringgit strengthened. AUDMYR is nor firmly below 3.0000, now at 2.9800, GBPMYR below 4.6000, now at 4.5650. USDJPY use to trigger Dollar buying, but add AUDUSD to the picture now and its actually quite easy for market to find a reason to long US Dollars.

• In Europe, the day started off a little on the back foot. Rate Futures rallied from the European open with ECB’s Visco mulling deposit rates “in negative territory” if future conditions require.

• Further ECB easing expectations being baked into the pie are evidenced by falling sovereign borrowing costs. Italy sold 3yrs at 1.92% (-37pts from April 11^th auction, BTC lower).

• The USD remains firm on the fumes of last week’s possible Fed purchase tapering natter. The USD Index closing stronger than previous but under ydays high. Clinging to 2% gains in just 3 sessions.