Hollande’s assistants are now expected to meet top ECB policymakers in order to brief them on his economic plans. Hollande is a French collective presidential aspirant in the ongoing presidential elections.

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The Australian Reserve bank lowered its key interest rate by half fraction point due to decreasing inflation pressures causing a bigger reduction than expected, which has led the Australian currency and bond yields to dip.

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Fed’s policymakers have come under serious criticism by the Nobel Prize winner-cum-economist, Paul Krugman who termed their failure to follow inflation as reckless and a cause for high redundancy in the U.S.

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Market indicators indicate likelihood of the USD trying the trend-defining support, which leaves participants pessimistic that it could be marking a major bearish setback. S&P, on the other hand, is trying to gather momentum over 1400.

 S&P 500 – Prices pulled out resistance at exactly 1399.10, which is 61.8% Fibonacci retracement point. The bulls are now targeting 76.4 percent point at exactly 1409.00. The 1399.10 point is now seen as short- term support.

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It’s difficult to envision that Mark Carney’s could stabilize.

The BoC’s governor has become the best central banker around the world.

Currently, he is the chairman of the FSB, which deals with reforms recommended for global monetary institutions. He is also seen as the best candidate to lead the BoE. People congratulate him for having rescued the nation from a serious world financial crisis. He is also expected to receive the Canadian of the year award from Canadian Club on Tuesday.

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In a previous post (” GBP/USD maintains the energy active as consumers retain control “) the practical case for the highs was completed with the cost going further up trend line resistance at both 1.6216 and 1.6226.  When trends speed up, the investors who trade in opposition to the trend require to establish that they can actually retract control. They couldn’t (low stopped at 1.622736) and the trading closed.

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Today’s GDP report proved to be less devastating, and this policymaker sees a trading opportunity from the upsetting news.

Got growth?

Apparently, there is very little in the U.S.

Today’s GDP report  failed to meet the expectations of many participants. However, market experts such as Willie Williams, director of organizational imitative sales at Societe Generale, has an idea of how you can trade even after the disappointing report.

Speaking to CBNC’s Scott Williams said that initially there were three key scenarios that were posed potential threat to the international economic outlook. These scenarios included a twofold dip recession, little demand in China, and Europe.

Currently, two of the above scenarios have, at least, started to actualize.

The reality is that Williams expects very little downtrend in the Euro irrespective of the current rate cut in Spain. This is chiefly because the Fed is currently operating on low credit rates, which might weigh heavily on the dollar. He also notes that the state of affairs in the U.S is not promising at all adding that even China is under similar threat.

William sees a fantastic trading opportunity in the AUD/USD pair despite the AUD showing weakness on deprived international economic news. According to him, traders can enter the trade at exactly 1.0450 and then set a close at 1.0600. He also adds that a reliable target should be at 1.0000.

Positives:

1) Personal spending within the initial quarter GDP rose by 2.9%, better than anticipated. The current weather also necessitated the 19.1 percent rise in residential construction in the first quarter.
2) Pending Home purchase in ruin up by 4.1% against EST of 1.0 percent.
3) Ruined New Home purchase 9k in a better position than anticipated and Feb corrected up by 40k.
4) Case/Shiller Feb housing price indicator goes up m/o/m following 9 consecutive mo’s of beg offs.
5) April UoM assurance goes up to its best since Feb ’11 and one year inflation potential drop to 3.2 percent, the least since Dec.
6) Richmond mfr’g review the single region to experience an increase since Mar.
7) China HSBC spark PMI up a little to 49.1 although it remains lower than 50 for six straight mo’s.
8) European markets steady after thriving bond sale by Spain and Italy. Portugal’s 10 year yield drops to its lowest from Sept.
9) French buyer confidence rises sharply since Dec 2010 as election contracts to two.
10) UK buyer confidence remains promising in 10 mos.

Negatives:

1) The initial quarter real GDP increases by only 2.2 percent, while the ostensible GDP rose by 3.7 percent following the sharp drop in defense spending. Commercial construction falls as real final purchase lackluster.
2) Durable products orders dropped in March.
3) Initial redundancy Claims over 380k for a 3rd week, 4 week average now increases sharply since early January.
4) Conference Board buyer Confidence drops somewhat and purchasing intentions of the major items (residence, auto, major electrical devices) drop comprehensively.
5) May German buyer confidence drops to a low of 5 mo.
6) French buyer spending falls lower than projected in Mar.
7) Euro zone financial confidence drops to its lowest in the last 3 years and mfr’g and armed forces complex indicator falls to  a low of 5 mo.
8) UK economy formally in a twofold dip recession.
9) Italian trade confidence weakens.
10) Spanish redundancy in the first quarter increases to 24.4 percent.
11) BoJ announces its intention to print more yen but will print another 10T yen but adulterates move arguing that 1 percent inflation is nearby.
12) Bernanke argues that he still provides an extra thrilling financial pixie dust for sprinkling if required.

In March, households’ spending in goods dropped off by 2.9% in capacity*, after having improved by 2.9 percent in February. The opening quarter saw the spending rise by 0.2% (after +0.3% in Q4 2011). The drop in expenditure was mainly attributed to the drop in energy and food products.

 [* Volumes are shackled and all numbers are trading days and timely attuned.]

Engineered supplies: somewhat rising in March (+0.3%)

Durables: rising in March

Households’ spending in durables improved in March (+1.5 percent, after –0.9 percent in February). During the first quarter, this expenditure had declined by almost 3.3 percent, following a 2.7 percent increase in Q4 2011. Although expenditure in car purchase had increased by 2.3 percent in February, it dropped by 5.6 percent in March. Buying of household durables also experienced a slight increase of about 0.2 percent in March.  But it also declined during the quarter by 0.9 percent from a positive of 0.3 percent.

Textile-leather: lessening

There has been a constant decline in textile consumption since March. Textile consumption is approximated to have dropped by 2.5 percent in March after it had a dynamic month in February. It dropped by 0.8 percent during the first quarter from a positive of 1.5 percent.

Other engineered merchandise: minor boost

There was a slight increase in the consumption spending of other engineered products in March. The spending increased from 0.2 percent to 0.3 percent. This improvement was also experienced over the opening quarter.

Total consumption of goods

Food and engineered goods

Decomposition of engineered goods

Food products: declining in March following two months of augmentation

There was a sharp drop about negative 2.3 percent in consumption of foodstuff in March. This drop followed a two months increase. It improved by 1.0 percent during the opening quarter following a drop of negative 0.1 percent in the last quarter of 2011.

Energy: going back to “normal” following the chilly spell

Following the tremendous rise in February largely due to increased purchase of heating products during the chilly season, domestic consumption of energy goods dropped sharply to about 11.3 percent. Over the opening quarter, it rose by 4.0 percent (after -3.2 percent in Q4 2011).

The development of domestic expenditure in supplies in February is sized up by 0.1 point.

The rise of domestic spending in supplies is now projected to reach -2.9 percent in February, in place of –3.0 percent predicted last month.

This reconsideration is remarkably as a result assimilation of new data relating to computers and other electronic products, and the review of seasonality.

Energy

S&P 500 emerged at the peak of the range containing prices for the last two weeks as the USD dropped beneath support available from March.

S&P 500 – Prices removed resistance at 1391.10-20 indicated by the current range top as well as the 50 percent Fibonacci retracement point. Bulls are currently trying the 61.8 percent point at 1399.10, while a break over will be exposing the April 2 rise at 1416.10. The 1391.10-20 point has been regarded as a short-term support.

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