Sentiment sours, boosting JPY -JPY is the.....>

FOREX: Sentiment sours, boosting JPY

-JPY is the strongest currency in G10 Friday, buoyed by a poor turnout from

European equity markets as core European stocks retreat 0.8-0.9% or so alongside

US equity futures, which are uniformly in the red. The moves follow a

particularly poor set of PMI numbers from Europe. The lowlight was manufacturing

PMI from Germany, which hit a meagre 44.7, a figure consistent with sharp

economic contraction. EUR/USD suffered from the off, inching below $1.13 after

testing the $1.14 handle throughout Asia. This tilted the DXY comfortably back

above pre-FOMC levels.

-Scandi FX are the only currencies materially underperforming the EUR so far,

with EUR/NOK taking a decent move higher as the market, presumably, appears to

speculate that the Norges Bank's hawkish outlook could be dented if European

data continues to turn south. EUR/NOK trades up at 9.6580 at writing, just shy

of the pre-rate decision highs seen yesterday.

-Attention turns to Canadian retail sales and CPI figures, prelim March US PMIs

and existing home sales for February.