US Market Summary on April11th, 2008

Dollar rebounded from fresh low vs euro after traders booked profits when expectations for hawkish ECB policy were met; euro rose to lifetime high of 1.5915 ahead of ECB President Trichet's decision to keep rates on hold, with no sign bank ready to cut rates.

Dollar recovered with Wall Street pushing up, euro coming off to 1.5725 as technical resistance on upside weighed. "The takeaway from this press conference is that the ECB is prepared to raise interest rates if second-round effects from elevated energy and food prices begin to emerge," said Michael Woolfolk, senior FX strategist at The Bank of New York Mellon. "Despite the current bout of profit-taking, the euro is expected to set further record highs against the dollar and U.K. pound in coming weeks on recognition that the ECB is the only (Group of Seven) bank prepared to raise interest rates this summer."

Dollar got some relief on improved jobless claims data; Late in New York, EUR/USD was 1.5741 vs 1.5823 late Wednesday, USD/JPY 101.89 vs 101.76, GBP/USD 1.9728 vs 1.9753, EUR/JPY 160.40 vs 161.06. Treasurys fell as stocks posted gains; volumes thin on absence of top tier data with market content to track equities. 2-year +7.3 bp at 1.82%, 10-year +6.4 bp at 3.53%. Stocks rose, helped by positive 1Q outlook by Wal-Mart, technology stocks got lift by upgrade for electronic chip companies; Wal-Mart +1%, Intel rose 3.1%, Analog Devices +5.1%. Dow +0.4%, Nasdaq +1.3%, Philly semicons +1.8%. June Comex gold fell $5.70 to $931.80/oz, largely on liquidation and gains in equities. Nymex May crude off 76 cents to $110.11/bbl in choppy session on rebounding dollar, weakening products markets.