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Tuesday, May 10

10th May - JPY weakens, consensus on Greece

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Guy Verhofstadt: Europe Sells OutProject Syndicate
Europe’s refugee crisis is far from solved, but there are signs that the agreement finalized by the EU and Turkey on March 18 is reducing the flow of refugees and migrants from Turkey to Greece. The problem is that the deal is undermining the values on which the EU was founded.

Eurozone’s So-Called Recovery Masks A Dark Secret: Mercantilism Social Europe

Majors & Scandies: May 2016 FX forecastNordea
We continue to think developed markets will continue to perform decently despite headwinds from Emerging Markets. We keep our forecast unchanged from April. The USD is going through a soft spell and that might not change in the short term but we still expect it to make a comeback in H2 2016. The EUR has gained ground but we see no strong case for continued EUR strength. And a correction of the JPY looks due although factors are supportive for JPY strength in the long term.

EM FX: May 2016 financial forecastsNordea
Commodity prices have defined EM FX performance so far this year. While commodity prices have started to look softer and pose a clear risk of renewed EM FX weakening in the near term, we have become more confident in the view that EM currencies will strengthen towards more fundamental equilibrium levels during the second half of this year and onwards.

Majors & Scandies: May 2016 central bank and rates forecasts Nordea
We stick to our forecasts that the ECB and the BoJ will soon ease again, while the Fed will hike rates only once this year. Due to the Brexit risk, the BoE is likely to remain on the side line for a while yet. With mounting inflation pressures we remain worried that markets will start to price in a scenario of the Fed falling behind the curve, resulting in a steeper curve later this year. For EUR rates we retain a slightly rising profile longer out, but the profile is backloaded.

Danske DailyDanske Bank

Euro rates updateNordea

Bond yields and oil prices lower; JPY hit by intervention warning * CPI prints in focus in Norway and Denmark * German yields reversed most of their earlier rise * JPY taking a hit

Morning MarketsTF
Markets slid Tuesday as a tumble in oil kept a lid on any momentum from better data out of China.

Euro wrap-up Daiwa
Daily Market Comment Marc Chandler
A Few Thoughts from Asian Business Trip

Daily Market CommentMacro Man
Commodities: long and wrong?

Daily Press SummaryOpen Europe
Senior NATO and US figures warn Brexit would undermine Western security while Boris Johnson claims EU is now “force for instability and alienation” * Osborne warns that tens of thousands of jobs could be lost in City of London if UK leaves * Austria’s Chancellor resigns amidst migration crisis fallout * New BCC survey: Support for Brexit up amongst British business * Some progress between Greece and creditors as completion of bailout review edges closer and debt relief talks tentatively begin * IDS: Cameron dropped ‘emergency brake’ on EU migrants at behest of Merkel * Merkel’s CDU/CSU on record low poll showing * French PM unveils new €40 million plan to fight radicalization * Podemos and United Left agree to run together in upcoming Spanish elections * French politician vying for President calls for referendum on new European “project” * German exports rise unexpectedly

Brussels PlaybookPolitico
Austrian chancellor out — Greek debt talks — Refugee showdown looms

Global Stocks Jump; Oil Rises As Yen Plunges After Another Japanese FX Intervention Threat


FX UpdateTF
Most USD pairs have not neutralized the bearish threat with a bit more EURUSD downside and USDJPY upside needed to seal the deal. But does a new US dollar bull market need a Fed-inspired catalyst?

From the FloorTF
Oil prices are down as the fire in Canada that was threatening oil production facilities recedes on the back of a literal headwind. That has also put pressure on NOK. Elsewhere USDCNH is in focus.

Dollari odottelee uutta äänensävyä * Saksan tehdastilaukset yllättivät positiivisesti * Japanin valtionvarainministerin mukaan interventiot ovat mahdollisia * Eurokorot jatkoivat laskulinjalla