%%%Dollar Falls on stimulus hopes in Asia, more of the same future reference

5 June 2012 strategist 07: 05 GMT Talking Points
Euro can be found Near-Term pressure of Final Round of PMI revisions US Dollar sold as Stocks rise on Fed stimulus hopes Asia Trade Aussie Dollar Gains as RBA offers a modest 25 bps cut speed S & P 500 Index Futures Point of recovery continued in revisions appetite of Final risk of services and data from the eurozone PMI composite of may are discussed in European hours. The impression of the region should confirm that activity in the manufacturing sector and services contracted at the fastest pace in almost three years. Separately, in the euro area retail sales and two German factory orders should show monthly declines in April. Taken together, the results can apply a bit of pressure down on the Euro: traders are beginning to build the expectations of ECB rate but support seems unlikely that the announcement policy just around the corner, suggesting traders will want to wait to push the euro down new concrete benchmarks Dove of Mario Draghi and company.
On the sentiment front, S & P 500 stock index futures contracts pointing more Asian trade, referring that the risk appetite is likely to continue to weigh on the refuge currencies in the next few hours. The gauge ISM Non-Manufacturing Composite comes in discussion later in the session. Median forecasts call for printing to 53.5 in may, matching result of April. With reading orders for the plant of yesterday, a result consistent with expectations is unlikely cause Fireworks, but a disappointing result may composed an on the Dollar downward pressure in the context of the theme there-led to play this week.
The US Dollar and the Japanese Yen fell against fellow top trade night Asian stocks advanced, sapping demand for currencies refuge go - to. The MSCI Asia Pacific regional reference index increased by 1.4%. As we have suspected yesterday, improving sentiment followed a printing us Factory Orders disappointing that stimulated speculation about a possible third round of Federal Reserve quantitative easing (there). The Australian Dollar was surpassed as expected after the RBA delivered a 25 bps rate coupled with a policy statement which gave no clear guidance on the future efforts of relaxation.
Asia session: What happened
AiG Performance of service Index (may)
Current account balance (was$) (1 q)
Net exports of the Australia of GDP (1 q)
Subject to the decision of the Australia rate Bank
Session of the euro: what to expect
The eurozone PMI composite (may F)
The euro Zone PMI services (may F)
Retail trade in the eurozone (MoM) (APR)
Retail trade in the eurozone (YoY) (APR)
German Factory Orders s.a. (MoM) (APR)
German Factory Orders n.o.s. (YoY) (APR)
Critical levels
-Written by Ilya Spivak, strategist of Dailyfx.com currency
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June 5, 2012 07: 05 GMT

::: French Election Stokes Investors ’ Fears for Future Europe’s

While French president Nicolas Sarkozy managed to eke out one of the top two spots in the first round of presidential voting, a second term is far from assured. Yesterday, French citizens took to the polls in the first round of presidential voting, and while the incumbent finished up among the top three, he was bookended by Socialist candidate Francois Hollande and far-right candidate Marine Le Pen; with the counting over, Hollande had received 28.6% of the total vote, Sarkozy 27.1%, and Le Pen a surprising 18.0%.
It is certainly a high probability that any French president would find his or her neck on the proverbial chopping block given the current economic situation in the Eurozone, in general and France, in particular. As is the case in many other Eurozone states, the people are angered over the lack of growth prospects, high unemployment and implementation of austerity measures to reduce sovereign debt. In the case of France, they are also frustrated, like their German counterparts, with having to bear the burden of driving the Eurozone’s collective economy.
Markets know where President Sarkozy stands as regards France’s economic future, though he has recently made some concessions to hopefully draw in Le Pen’s supporters. Meanwhile, candidate Hollande said it would be his job as president to “put Europe back on the path of growth and employment.” Further, he said that as president he would seek to renegotiate the E.U. treaty on fiscal discipline and monitoring which was strong-armed through the E.U. Parliament by both Nicolas Sarkozy and German Chancellor Angela Merkel and which remains a bone of contention among several of the E.U. member states.
Hollande’s declaration of that intent is giving markets cause for concern, as it would open the door for any or all of the other E.U. members, some of which had clearly been less than enamored by the Treaty, to withdraw their support. Markets are also keenly aware that, irrespective of the outcome and despite the oppositions’ disavowal, the winner will have little choice but to continue on with the unpopular austerity measures.
eToro’s Senior Analyst, Lior Alkalay, had this to say, “the fear among investors – which are also the Eurozone’s creditors – is simple and justifiable; the French election is just the latest event in an overall wave of socialism which will flood Europe and push austerity into the unknown.”
Indeed, given the unknown, equity markets had opened markedly lower in the first day of trading following French presidential voting. France’s CAC-40 had earlier been the loss leader among the Eurozone’s three major indices, and is currently down by 45.92 points, or 1.44%. By a ratio of 2 to 1, sentiment on OpenBook is bullish.
The EUR/USD pair is also lower at 1.3150, and sentiment appears to be nearly evenly split between bulls and bears on OpenBook. OpenBook guru pyruss has been placing sell orders over the past several hours, even as he’s had two short positions close with profits of 3.4% and 2.3% each. Several long positions opened earlier today are also nearing break-even as of this writing. This guru has allocated more than 86% of his portfolio to the EUR/USD pair which has provided a gain of 0.9% over the past six months to him and his 589 copiers. This guru’s recorded P&L for the week stands at 1.1%, for the month at 3.2%, quarter at 8.8% and six months at 41.8%. One of OpenBook’s most active and prolific traders, pyruss has executed 1323 trades over the past six months, with 99.7% of them resulting in a profit.
OpenBook trader berufstouri, who has two followers, closed a short position with a 10% gain earlier, which followed another that was copied from fellow German and OpenBook guru babczyk. This trader allocates 70% of his portfolio to the EUR/USD, which has provided a return of 5.6% over the past month. Overall, this trader’s P&L in the same period is 15.3% and improves to 33.3% for the quarter.
To analysts, the French President’s absence from the top spot sends a clear and loud signal that France’s citizens are looking for anyone other than Sarkozy to be country’s champion. What is next is a May 6th run-off of the top two candidates to determine the next French president. None of the other candidates have yet thrown their support to either of the front-runners, so the real question is how the constituents who did not support either will now cast their vote.