Notes From My Desk – April 18, 2012

By FXEmpire.com

Now and then, I shared with my readers, notes from my desk. These are the notes that I gather daily as I do my research and watch the markets. They come from various sources and are a splattering of this and that. They all somehow end up separated by markets and in some understandable order. I just mostly copy them so that when the day is done, I have notes on the highlights in the markets.

They actually tell a nice story and each time I have shared these, my readers have commented favorably. I must tell you that they are not original, that I just copy them throughout the day as my personal notes. I hope the writers and publishers don’t mind that I share them.

I have decided to start putting them together on a daily basis and sharing them. Let me know what you think.

Today, crude-oil futures pared down losses Wednesday after a weekly government report showed inventories higher than expected but a large decrease for gasoline supplies. Crude for May delivery retreated 19 cents, or 0.2%, to $103.99 The Energy Information Administration said crude inventories rose 3.9 million barrels in the week ended April 13. That contrasts with expectations of a rise around 400,000 barrels according to analysts polled by Platts.

The U.S. is very supportive of the move by Europe and other countries to boost the firepower of the International Monetary Fund to help alleviate any spillover from the European crisis, said Treasury Secretary Timothy Geithner

The Canadian government said it will auction on Thursday C$3.8 billion (US$3.8 billion) of 7-day treasury bills. The bills will be dated and issued Thursday and will mature April 26. Tenders must be received no later than 10:30 a.m. EDT (1430 GMT) Thursday

The dollar loses ground to sterling after April minutes of Bank of England meeting show quantitative-easing advocate Adam Posen dropped his call to expand central bank’s bond-buying program.

Members of the Bank of England’s Monetary Policy Committee voted 8-1 to hold the size of its asset-purchase program, the centerpiece of its quantitative-easing strategy, at 325 billion pounds ($519.3 billion) at their monthly policy meeting

The unemployment rate in the U.K. for the three-month period ending February 2012 came in at 8.3%, down from a prior reading of 8.4%, the Office for National Statistics reported on Wednesday.

Bad debts held by Spanish banks rose to a fresh 17-year high in February, topping 8% for the first time since October 1994, as companies and households fell further behind on debt payments amid a deepening housing and economic slump.

According to data released Wednesday by the Bank of Spain, 8.16% of the loans held by banks, or EUR143.82 billion, were more than three months overdue for repayment in February, up from 7.91% in January.

The Italian government will delay its plan to reach a balanced budget in 2013 by a year due to a weaker economic outlook, Reuters reported Wednesday, citing a draft document expected to be approved by Prime Minister Mario Monti’s cabinet later.

The European Central Bank has done enough and it’s up to European nations to “complete the architecture,” according to Jose Vinals, director of the monetary and capital markets department of the International Monetary Fund. “The ECB has bought precious time that political authorities need to use to regain stability and enhance and sustain growth,” said Vinals during a question-and-answer as part of the publication of the global financial stability report. “European authorities need to provide investors with a clear answer where monetary union is going. The answer is more and better euro, not less euro,” he said.

The Bank of Japan may raise its consumer inflation outlook for the current and next fiscal years, though the new forecast would remain below the level the central bank has tagged as necessary to tighten its policy, according to a Nikkei report.

The Japanese yen weakened against the U.S. dollar Wednesday as Asian equities rebounded, joining a global stock rally to reflect improved investor sentiment after a Spanish bond auction met with strong demand.

The U.S. dollar was purchasing ?81.36 from ?80.88 in North American trading late Tuesday. The euro rose to ?106.64 from ?106.38 the previous day.

A healthy Spanish bond auction and a surprise increase in the ZEW [German economic sentiment] survey indicates that investors have not given up on Europe. The bid-to-cover ratio, which measures demand, was higher than a similar sale in late March.

The yen also continued to climb as traders sought safe havens amid worries about new deterioration in the eurozone.

The dollar fell to ?80.39 from ?80.91, and the euro dropped to ?105.64 from ?105.83.

China’s yuan meanwhile took a slight drop lower against the dollar after the country’s central bank widened the daily trading band for the closely-controlled currency to 1.0 percent above and below a daily midpoint, double the previous 0.5 percent.

The yuan stood at 6.3163 to the dollar against Friday’s close of 6.3030, with the weakening blamed on worries over the country’s slowing economy.

Despite arguments, especially from Washington, that the yuan is undervalued, Lu Ting, China economist for Bank of America, said: “The consensus in Beijing is that the room for appreciation seems quite limited.”

“Construction employment should continue to stabilize as those workers finishing jobs have opportunities for new ones Although U.S. builders start work on new homes at a sharply slower March pace, construction permits jump to their highest level in 3 1/2 years, data showed. Builders began construction on new U.S. homes at a slower pace in March, but permits jumped to the highest level since September 2008, the Commerce Department reported Tuesday. Housing starts fell 5.8% last month to an annual rate of 654,000.

Originally posted here