DAILY MARKET COMMENTARY
24 June 2008

Tuesday 

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GCI Foreign Exchange Research:        www.gcitrading.com/fxnews/
FX Research Desk:                                fxnews@gcitrading.com
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Fundamental Outlook at 1400 GMT (EDT + 0400)

?

The euro moved higher vis-୶is the U.S. dollar today as the single currency tested offers around the US$ 1.5620 level and was supported around the $1.5490 level.  The common currency erased some of yesterday?s losses as traders reacted to a move higher in August crude oil futures to an all-time high of US$ 138.75 per barrel.  Dealers cite lower-than-normal liquidity ahead of tomorrow?s Federal Open Market Committee interest rate decision. The Fed is expected to keep its federal funds target rate unchanged at 2.00% but is expected to be relatively hawkish in its policy statement, likely noting that inflationary risks outweigh risks of an economic slowdown.  Data released in the U.S. today was generally weak. First, it was reported that June consumer confidence fell to 50.4 from 58.1 in May. Second, the April S&P/ Case Shiller home price index was off a record 15.3% y/y, the sixteenth consecutive month of yearly price declines. Third, a U.S. government measure of house prices was off 0.8% m/m and 4.6% y/y in April. Fourth, the Richmond Fed June manufacturing index printed at -12 from -3 in May.  In eurozone news, traders await comments from European Central Bank President Trichet later in the day regarding wage inflation.  Most dealers expect the ECB will lift the overnight call rate by 25bps to 4.25% in July but the move is expected to be a one-off move for now.  Data released in the eurozone today saw the German GfK July consumer sentiment index print at 3.9, down from 4.7 in June and lower than expected. Slovenian finance minister Bajuk said the ECB needs to ?have all its options open? on inflation. Germany?s Bundesbank reported its still sees German 2008 GDP growth of 2.3% while Ifo lifted its forecast to 2.4%.  Also, the French June business climate indicator printed at 102, unchanged from May.  Euro bids are cited around the $1.5230 level.

?/ CNY

The yen appreciated vis-୶is the U.S. dollar today as the greenback tested bids around the ?107.35 level and was capped around the ?108.20 level.  The pair retraced some of yesterday?s gains as traders position themselves ahead of tomorrow?s Federal Reserve interest rate decision.  Prime Minister Fukuda yesterday said he will ask his Group of Eight colleagues to tackle oil and food inflation when policymakers convene in northern Japan in July.  Yesterday?s government report on large company sentiment came in weaker-than-expected and that may not bode well for Bank of Japan?s Tankan survey of consumer sentiment on 1 July.  The Nikkei 225 stock index lost 0.06% to close at ?13,849.56. Dollar bids are cited around the ?103.00/ 101.35 levels.  The euro moved higher vis-୶is the yen as the single currency tested offers around the ?168.20 level and was supported around the ?167.30 level.  The British pound and Swiss franc moved higher vis-୶is the yen as the crosses tested offers around the ?212.85 and ?103.85 levels, respectively. The Chinese yuan appreciated vis-୶is the U.S. dollar as the greenback closed at CNY 6.8699 in the over-the-counter market, down from CNY 6.8740 ? the pair?s lowest close since the yuan revaluation of July 2005.

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The British pound appreciated vis-୶is the U.S. dollar today as cable tested offers around the US$ 1.9720 level and was supported around the $1.9625 level.  Data released in the U.K. today saw BBA May mortgage approvals fall to 27,968, the lowest level in more than one decade. These data are consistent with other recent measures of U.K. housing activity that have seen mortgage and lending data recede to multi-year lows.  Cable bids are cited around the US$ 1.9360/ 1.9100 levels.  The euro moved higher vis-୶is the British pound as the single currency tested offers around the ?0.7930 level and was supported around the ?0.7890 level.

CHF

The Swiss franc appreciated vis-୶is the U.S. dollar today as the greenback tested bids around the CHF 1.0350 level and was capped around the CHF 1.0470 level.  Data released in Switzerland today saw the UBS May consumption indicator decline to 1.91 from 2.16 in April and 2.25 in March.  U.S. dollar bids are cited around the CHF 1.0250 level.  The euro and British pound lost ground vis-୶is the Swiss franc as the crosses tested bids around the CHF 1.6160 and CHF 2.0405 levels, respectively.

Technical Outlook at 1230 GMT (EDT + 0400)

             (Bid Price)       (Today?s Intraday Range)                               

EUR/ USD         1.5560                 1.5582, 1.5491
USD/ JPY         107.89                 108.22, 107.77
GBP/ USD        1.9646                 1.9701, 1.9623
USD/ CHF         1.0401                 1.0470, 1.0381
AUD/ USD         0.9542                 0.9551, 0.9498
USD/CAD          1.0161                 1.0171, 1.0146
NZD/USD          0.7561                0.7581, 0.7551
EUR/ JPY         167.90    168.22, 167.29
EUR/ GBP        0.7911                 0.7928, 0.7892
EUR/ CHF         1.6191                 1.6239, 1.6173
GBP/ JPY         212.15                 212.84, 211.76
CHF/ JPY          103.67    103.86, 103.11

Support                        Resistance                   Support                     Resistance

EUR/ USD                                                              USD/ JPY

L1.        1.5225                          1.5645                            101.95                        106.60 

L2.        1.5035                          1.5840                            100.60                        109.95
L3.        1.4805                          1.6020                             98.75             113.30

   GBP/ USD                                                          USD/ CHF

L1.        1.9520                          1.9760                          1.0135                          1.0565

L2.        1.9395                          1.9880                          0.9990                          1.0730

L3.        1.9100                          2.0000                          0.9875                          1.1040

 AUD/ USD                                                           USD/ CAD

L1.        0.9380                          0.9655                          0.9870                          1.0175

L2.        0.9215                          0.9735                          0.9715                          1.0370

L3.        0.9005                          1.0115                          0.9465                          1.0520

 NZD/ USD                                                           EUR/ JPY

L1.        0.7700                          0.8105                          160.60                          166.65

L2.        0.7595                          0.8420                          158.35                          167.75

L3.        0.7275                          0.8665                          154.80                          168.95

  EUR/ GBP                                                           EUR/ CHF

L1.        0.7740                          0.8120                          1.5975                          1.6250

L2.        0.7555                          0.8310                          1.5855                          1.6470

L3.        0.7440                          0.8570                          1.5730                          1.6760

  GBP/ JPY                                                           CHF/ JPY

L1.        200.60                          208.50                            98.70                         103.30

L2.        197.55                          211.35                            97.00                         105.40

L3.        192.70                          217.15                            95.85                         107.70

SCHEDULE

Tuesday, 24 June 2008

all times GMT

(last release in parentheses)

N/A       US                    Federal Open Market Committee meeting begins

0610     Germany           July GfK consumer confidence (4.9)

0645     France              May housing starts

0645     France              May housing permits

0645     France              May consumer spending (-0.8% m/m)

0645     France              May consumer spending (0.4% y/y)

0650     France              June business confidence (102)

0650     France              June production outlook (-15)

0730     Italy                  June consumer confidence (103.2)

0800     CH                    May UBS consumption indicator (2.179)

0830     UK                    May BBA loans for house purchases

1230     US                    Former Federal Reserve Chairman Greenspan speaks

1300     US                    April S&P/ Case Shiller home price index (172.2)

1400     US                    April house price index (-0.4% m/m)

1400     US                    June Richmond Fed manufacturing index (-3)

1400     US                    June consumer confidence (57.2)

2350     Japan                May merchandise trade balance (?485.0 billion)

2350     Japan                May corporate services prices (0.5% y/y)

Wednesday, 25 June 2008

all times GMT

(last release in parentheses)

N/A       Germany           June CPI (0.6% m/m)

N/A       Germany           June CPI (3.0% y/y)

N/A       Germany           June CPI, harmonized (0.7% m/m)

N/A       Germany           June CPI, harmonized (3.1% y/y)

N/A       UK                    June Nationwide house prices (-2.5% m/m)

N/A       UK                    June Nationwide house prices (-4.4% y/y)

0500     Japan                June small business confidence (42.2)

0800     Italy                  April retail sales (-0.5% m/m)

0800     Italy                  April retail sales (-1.0% y/y)

0900     Eurozone          April industrial new orders (-1.0% m/m)

0900     Eurozone          April industrial new orders (-2.5% y/y)

1000     UK                    June CBI distributive trades report

1100     US                    MBA mortgage applications (-8.8%)

1230     US                    May durable goods orders (-0.5%)

1230     US                    May durable goods orders, ex-transportation (2.5%)

1400     US                    May new home sales (526,000)

1400     US                    May new hone sales (3.3% m/m)

1815     US                    Federal Open Market Committee interest rate decision

2245     NZ                    Q1 current account balance (-NZ$ 3.41 billion)

2350     Japan                Foreign purchases of Japanese equities and bonds

2350     Japan                Japanese purchases of foreign equities and bonds

Thursday, 26 June 2008

all times GMT

(last release in parentheses)

0000     Australia           April leading index (-0.4%)

0130     Australia           May job vacancies (-2.5%)

0600     Germany           May import price index (0.9% m/m)

0600     Germany           May import price index (5.7% y/y)

0645     France              June consumer confidence (-41)

0730     Italy                  June business confidence (89.6)

0800     Eurozone          May M3 money supply (10.7%)

0800     Eurozone          May M3 money supply (10.6% y/y)

0830     UK                    Q1 total business investment (-1.4% q/q)

0830     UK                    Q1 total business investment (3.7% y/y)

1130     Eurozone          Federal Reserve Vice Chairman Kohn speaks

1230     US                    Q1 GDP, annualized (0.9% q/q)

1230     US                    Q1 GDP price index (2.6%)

1230     US                    Q1 personal consumption expenditures (2.1% q/q)

1230     US                    Weekly initial jobless claims (381,000)

1230     US                    Continuing jobless claims (3.060 million)

1400     US                    May existing home sales (4.89 million)

1400     US                    May existing home sales (-1.0% m/m)

2245     NZ                    Q1 GDP (3.7% y/y)

2245     NZ                    May trade balance

2330     Japan                May jobless rate (4.0%)

2330     Japan                June Tokyo-area CPI (0.9% y/y)

2330     Japan                June Tokyo-area CPI, ex-fresh food (0.9% y/y)

2330     Japan                June Tokyo-area CPI, ex-food, energy (0.1% y/y)

2330     Japan                May CPI (0.8% y/y)

2330     Japan                May CPI, ex-fresh food (0.9% y/y)

2330     Japan                May CPI, ex-food, energy (-0.1% y/y)

2350     Japan                May large retailers? sales (-2.2%)

2350     Japan                May retail trade (-0.1% m/m)

2350     Japan                May retail trade (0.1% y/y)

2350     Japan                May household spending (-2.7% y/y)

2350     Japan                May industrial production (-0.2% m/m)

2350     Japan                May industrial production (1.9% y/y)

2350     Japan                May retail trade (-0.1% m/m)

2350     Japan                May retail trade (0.1% y/y)

Friday, 27 June 2008

all times GMT

(last release in parentheses)

N/A       Germany           June Ifo business climate survey

0300     NZ                    May M3 money supply (4.5% y/y)

0430     Australia           Reserve Bank of Australia Assistant Governor Debelle speaks

0645     France              May PPI (5.4% y/y)

0650     France              Q1 GDP (2.1% y/y)

0800     Italy                  June PMI, retail

0800     France              June PMI, retail

0800     Germany           June PMI, retail

0800     Eurozone          June PMI, retail (53.1)

0800     Eurozone          April current account (-?15.3 billion)

0830     UK                    Q1 GDP (0.4% q/q)

0830     UK                    Q1 GDP (2.5% y/y)

0830     UK                    Q1 current account (-?8.5 billion)

0900     Italy                  May hourly wages (2.8% y/y)

0900     Eurozone          June business climate (0.54)

0900     Eurozone          June consumer confidence (-15)

0900     Eurozone          June economic confidence (97.1)

0900     Eurozone          June industrial confidence (-2)

0900     Eurozone          June services confidence (8)

0930     CH                    June KOF leading indicator (1.09)

1230     US                    May personal income (0.2%)

1230     US                    May personal spending (0.2%)

1230     US                    May PCE, core (0.1% m/m)

1230     US                    May PCE, core (2.1% y/y)

1230     US                    May PCE deflator (3.2% y/y)

1230     Canada             May industrial product price (1.4% m/m)

1230     Canada             May raw materials price index (5.1% m/m)

1400     US                    June University of Michigan consumer sentiment (56.7)

DISCLAIMER: GCI?s Daily Market Commentary is provided for informational purposes only. The information contained in these reports is gathered from reputable news sources and is not intended to be used as investment advice. GCI assumes no responsibility or liability from gains or losses incurred by the information herein contained.

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