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European markets and US futures down ahead of the weekend

FXstreet.com (Barcelona) - The German DAX 30 (-0.43%), the French CAC 40 (-1.07%), the Italian FTSE MIB (-076%), the Spanish IBEX 35 (-1.15%) and the British FTSE 100 (-0.32%) are down, like the rest of European equity indexes, as well as American futures such as the S&P 500, Nasdaq 100 and Dow Jones 30 that signal a lower NY opening by -0.30%. Investors are nervous ahead of US GDP due at 12:30 GMT and markets are adjusting their positions into the weekend as next week will have ECB and FOMC decisions.

In regard to the US GDP Q1: “We expect the economic recovery to start the year on a much firmer footing than it ended 2012. And even in the midst of ever-tightening fiscal policy and an unsupportive global environment, the economy is expected to boast a very respectable 3.0% Q/Q advance in Q1, up significantly from the disappointing 0.4% Q/Q advance recorded the previous quarter”, wrote TD Securities analyst Jacqui Douglas.

The ECB said Spanish banks bought €15.8B of government bonds in March, while sovereign bond buying by banks in Italy rose €10.8B in March. Also, deposits rose in Portugal, Spain, Italy and Slovenia, but fell by 3.9% in Cyprus in March. EMU money supply eased in March from 3.4% to 3.0% (3m) and from 3.1% to 2.6% (YoY), below 3.0% consensus. Private loans fell -0.8% as expected, like in February (revised lower, from -0.9%).

German import prices report was already published, at -0.1% (MoM) and -2.3% (YoY), less contracting than the expected -0.2% and -2.4%, respectively. French consumer confidence remains unchanged at 84.

Forex: USD/JPY trading at support at 98.68/69

The USD/JPY has traded unevenly Friday, though the one constant during European trading has been an entrenchment in negative territory, on the heels of the earlier BoJ news. In these moments, the pair is operating at support at 98.68/69, incurring a steep loss of -0.55%.
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Forex Flash: US GDP Q1 ahead with FOMC on the lookout – TD Securities

As investors look for hints on how to price in expectations ahead of the FOMC meeting next week, today’s Q1 GDP report will provide some important context for gauging the tone of economic activity: “We expect the economic recovery to start the year on a much firmer footing than it ended 2012. And even in the midst of ever-tightening fiscal policy and an unsupportive global environment, the economy is expected to boast a very respectable 3.0% Q/Q advance in Q1, up significantly from the disappointing 0.4% Q/Q advance recorded the previous quarter”, wrote analyst Jacqui Douglas, pointing to stronger consumer spending activity as the main catalyst for the rebound in growth, which should more than compensate for the drag from lower disposable income and sequestration. “Buoyant business fixed investment and further positive momentum in residential construction activity should also bolster the bottom line. The risks to this call are tilted slightly to the upside, and are centered on the potential for a more supportive performance in inventories and net exports”, Douglas continued.
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