ASIA SUMMARY

Asia saw another wild session led by the carry trade. EUR/JPY broke through to multi-year highs as it traded through the 160.50 area resistance. EUR/CHF which rarely moves in Asia broke through the 1.6400 level and had a euphoric move through 1.6450 taking out option barriers along the way. AUD/JPY also made multi-year highs partly helped by better than expected Australian employment data; the March unemployment rate came in at 4.5% vs. expectations of 4.6%.

EUR/USD also rallied to new highs not seen since 2005. Dollar sellers were partly helped by comments from the Fed’s Moskow saying that the stronger than expected US employment data is probably not sustainable. He also warned against US protectionist trade policy, another dollar negative.

Last month’s theme of correlation in risky assets did not hold today as the Nikkei 225 was down 157.68 midday while risk assets (the carry trade) were strong. It seems that the market has quickly forgotten the risk of the US subprime mortgage market and sees it as an isolated problem.

Upcoming Data Release (UK Session):

UK: (4:30am EDT) Total trade balance expected -4,000 vs. previous -3,783 million pounds. (No time given) BCC 1st Quarter Economics survey

EC: (5am EDT) Quarter over quarter seasonally adjusted Euro-Zone GDP expected .9% vs. previous .9%. (7:45am EST) ECB announces interest rates with no change expected.