Obama to Focus on Financial Regulation as Brown Admits Mistakes

Today U.S. President Barrack Obama will meet with White House officials to discuss Wall Street Regulations. It is unknown how much political capital the U.S. leader has left after his victory on Health care.

Financial Reform has been a recurrent topic worldwide as earlier today the British PM Gordon Brown expressed an admission of guilt on behalf of the UK government regarding bank regulation.

The US$ is weaker in the O/N trading session. Currently it is lower against 10 of the 16 most actively traded currencies in a ‘whippy’ trading range. The USD$ is higher against the JPY -0.33% and lower against the EUR +0.31%, CHF +0.08%. The commodity currencies are a stronger this morning, CAD +0.33% and AUD +0.43%. The market should expect the AUD to remain better bid on any pull backs (0.9328).

Crude is higher in the O/N session ($84.70 up +65c). Oil snapped a 5 day losing streak as investors are flocking to the commodity looking for an inflation hedge. Inventories released later today will most likely point to an increase which will put downward pressure on the black stuff. For the moment a weaker dollar is keeping crude at current levels. Last week’s EIA report revealed that crude stocks rose by +2.9m barrels to +354.2m. The market had been expecting an increase of +2.4m. The surprising factor in the report was that gas inventories recorded a modest gain, unlike the previous couple of weeks. Stocks increased +313k barrels to +224.9m w/w vs. a forecasted decline of -1.85m barrels. Other reports showed that OPEC’s crude-oil production slipped from a 14-month high last month. Technical analysts have their eye on $90 by year end.

Commodities prices remain contained despite a weakened dollar. Gold rose for the first time in the last 3 days as its alternative investment status is restored after depreciation of the USD$ ($1,159). Platinum and palladium have outperformed Gold as jewelry demand and Chinese auto industry demand have picked up. Yuan revaluation is also expected to boost gold as its price would become more attractive to Chinese buyers of the metal.

The Nikkei closed at 11,204 up +43. The DAX index in Europe was at 6,2626 up +31; the FTSE (UK) currently is 5,791 up +30. The early call for the open of key US indices is higher.

Note: Dean will be away traveling for the next two week’s and will return to publication on April 29th.

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