Morning Commentary  17 May 2013 09:04

This report was produced by the Bank of Ireland Economic Research Unit (ERU) Senior Economist, Michael Crowley 353 (0) 766 244 268 Dollar on front foot despite weak US data The dollar lost ground for a time yesterday after some weaker than expected US economic data, although it has recovered again and trades this morning at just over $1.2850 against the euro. In terms of the data, the number of housing starts in the US fell by over 16% in April, although building permits continued to rise last month suggesting new house building should continue on an upward trend. The number of new jobless claimants jumped last week to 360k having run sub-330k in each of the two previous weeks, though this data can be very volatile and it would not be unreasonable to expect claims to fall back again over the next week or two. Finally, the latest regional survey of manufacturing – this time for Philadelphia – points to a moderation in activity there, something that is likely be mirrored at the national level as well. Indeed, it does seem as if GDP growth in the US will slow in Q2 from Q1 (when the economy expanded at a 2.5% rate), in line with expectations that have been in place for a while now. The renewed bounce in the dollar followed a speech by the head of the San Francisco Fed, John Williams, who is viewed as being in the Ben Bernanke / Janet Yellen (chair and vice-chair of the Fed respectively) camp at the Fed, in which he raised the prospect of the Fed easing back and ultimately ending QE over the remainder of this year. He said that the labor market is likely to improve further over the next six months and that the Fed “could reduce somewhat the pace of our securities purchases (the Fed is currently buying securities – government and mortgage bonds - at a rate of $85bn each month) perhaps as early as this summer”and that “if all goes as hoped, we could end the purchase program sometime late this year”. It’s quiet on the data front today with US consumer confidence the only release of note.     Data section contents (changes on the day) Spot and forward rates Equity indices World forex rates Bond yields Money market rates Commodities Interest rate swap rates Key data releases   Prev Fcst Cons 14.55  US Consumer Confidence   76.4  77.9  77.9                      Spot rates More details in data section EUR/GBP 0.8437 EUR/CHF 1.2435 EUR/USD 1.2866 EUR/JPY 131.91 GBP/USD 1.5243 EUR/CAD 1.3162 EUR/SEK 8.5886 EUR/PLN 4.1900 EUR/NOK 7.5200 EUR/ZAR 12.0745 EUR/HUF 291.75 EUR/CZK 26.000 Money market rates More details in data section Base O'night 1 week 1 M 3 M 6 M 12 M EUR 0.50 0.02 0.03 0.06 0.12 0.20 0.38 GBP 0.50 0.48 0.49 0.49 0.51 0.59 0.88 USD 0-0.25 0.15 0.17 0.20 0.27 0.42 0.69 Interest rate swap rates More details in data section 2 year 3 year 5 year 7 year 10 year 15 year 20 year EUR 0.42 0.52 0.85 1.20 1.65 2.13 2.28 GBP 0.68 0.77 1.10 1.49 2.04 2.59 2.88 USD 0.45 0.56 1.00 1.49 2.06 2.62 2.86 World forex rates More details in data section CAD AUD NZD CHF JPY EUR 1.3162 1.3198 1.5858 1.2435 131.91 USD 1.0230 1.0263 1.2333 0.9664 102.52 GBP 1.5597 1.5640 1.8790 1.4734 156.31 USD/CNY 6.1411 USD/BRL 2.0254 USD/MXN 12.2831 USD/THB 29.80 USD/SGD 1.2566 USD/ZAR 9.3627 Prime Rate 0.7200 Recent research View recently published reports at www.treasuryspecialists.com/research, including: The Bulletin (monthly analysis of international and Irish markets) UK View (monthly analysis of trends in the UK economy) The Outlook (quarterly analysis of trends in the Irish economy) Irish Property Review (quarterly analysis of Irish property trends) Market Newsflash (up-to-the-minute analysis of key economic developments) All rates quoted are indicative market rates

Daily Commentary 17 May 2013     Data section - changes on the day     Spot and forward rates Change on the day      EUR/GBP Change Spot 0.8437 -0.27% 1M 3 3M 10 6M 19 12M 40    EUR/USD Change Spot 1.2866 -0.04% 1M 2 3M 8 6M 18 12M 41    GBP/USD Change Spot 1.5243 0.23% 1M -3 3M -9 6M -16 12M -24     World forex rates Change on the day      EUR currency pairs Change EUR/CAD 1.3162 0.31% EUR/AUD 1.3198 0.88% EUR/NZD 1.5858 1.02% EUR/CHF 1.2435 -0.03% EUR/JPY 131.91 -0.05% EUR/SEK 8.5886 -0.07% EUR/NOK 7.5200 -0.31% EUR/HUF 291.75 0.04% EUR/PLN 4.1900 0.18% EUR/ZAR 12.0745 0.65% EUR/CZK 26.000 —    USD currency pairs Change USD/CAD 1.0230 0.34% USD/AUD 1.0263 0.91% USD/NZD 1.2333 0.92% USD/CHF 0.9664 0.01% USD/JPY 102.52 0.01% USD/CNY 6.1411 0.05% USD/MXN 12.2831 0.57% USD/SGD 1.2566 0.48% USD/BRL 2.0254 0.22% USD/THB 29.80 -0.24% USD/ZAR 9.3627 1.16%    GBP currency pairs Change GBP/CAD 1.5597 0.54% GBP/AUD 1.5640 1.14% GBP/NZD 1.8790 1.31% GBP/CHF 1.4734 0.22% GBP/JPY 156.31 0.26% GBP/SGD 1.9156 0.71% GBP/MYR 4.6080 0.50% GBP/NOK 8.9091 -0.03% GBP/HKD 11.8336 0.25% GBP/SEK 10.1741 0.19% GBP/DKK 8.8292 0.25% GBP/ZAR 14.3033 1.39%     Money market rates Change on the day       Base   O'night   1 week   2 week   1 M   2 M   3 M   6 M   9 M   12 M EUR - 0.50 0.02 - 0.03 0.04 - 0.06 - 0.09 - 0.12 - 0.20 - 0.29 - 0.38 GBP - 0.50 - 0.48 0.49 - 0.49 - 0.49 0.50 0.51 - 0.59 - 0.73 - 0.88 USD - 0-0.25 - 0.15 - 0.17 - 0.18 - 0.20 - 0.23 - 0.27 - 0.42 - 0.55 - 0.69     Interest rate swap rates Change on the day   2 year Chng 5 year Chng 7 year Chng 10 year Chng EUR 0.42 -0.03 0.85 -0.02 1.20 -0.01 1.65 -0.01 GBP 0.68 -0.02 1.10 -0.02 1.49 -0.03 2.04 -0.04 USD 0.45 0.01 1.00 -0.04 1.49 -0.06 2.06 -0.07 Equity indices Change on the day Change ISEQ 3997 -0.32% DOW Jones 15233 -0.28% S&P 500 1650 -0.50% SMI 8256 -0.68% Nasdaq 3465 -0.18% FTSE 100 6688 -0.09% Eurostoxx 50 2807 -0.10% Nikkei 15138 0.67% Commodities Change on the day Change Brent 103.70 0.12% WTI Cushing 95.16 0.91% Gold 1375.81 -0.47% Wheat 687.75 -0.86% Emissions Allowance 3.65 1.67%   Government bond yields (YTM) Change on the day   2 year Chng 5 year Chng 10 year Chng 30 year Chng Ireland 0.72 -0.01 2.13 -0.04 3.45 -0.04 Germany -0.02 -0.03 0.35 0.12 1.33 -0.05 2.25 -0.04 US 0.23 -0.01 0.78 -0.04 1.88 -0.06 3.10 -0.07 UK 0.31 -0.03 0.81 -0.04 1.84 -0.06 3.17 -0.04     Prime Rate   Bank of Ireland prime rate    0.72            Market data supplied by Thomson Reuters     Disclaimer This document has been prepared by the Economic Research Unit at Bank of Ireland Global Markets (“GM”) for information purposes only and GM is not soliciting any action based upon it. GM believes any information contained herein to be accurate but GM does not warrant its accuracy and accepts no responsibility, other than any responsibility it may owe to any party under the European Communities (Markets in Financial Instruments) Regulations 2007 as may be amended from time to time, and under the Financial Services Authority rules (where the client is resident in the UK), for any loss or damage caused by any act or omission taken as a result of the information contained in this document. No prices or rates mentioned are bids or offers by GM to purchase or sell any currencies, securities or financial instruments. Except as otherwise may be specifically agreed, GM has not acted nor will act as a fiduciary, financial or investment adviser with respect to any currency or derivative transaction that it has executed or will execute. Any decision made by a party after reading this document shall be on the basis of its own research and not be influenced or based on any view expressed by GM. This document does not address all risks. Any party should obtain independent professional advice before making any investment decision. Any expressions of opinion reflect current opinions as at 17 May 2013. This publication is based on information available before this date. This document is property of GM. The content may not be reproduced, either in whole or in part, without the express written consent of a suitably authorised member of GM staff. Bank of Ireland is regulated by the Central Bank of Ireland. In the UK, Bank of Ireland is authorised by the Central Bank of Ireland and authorised and subject to limited regulation by the Financial Services Authority. Details about the extent of our authorisation and regulation by the Financial Services Authority are available from us on request. Bank of Ireland incorporated in Ireland with limited liability. Registered Office - Head Office, 40 Mespil Road, Dublin 4, Ireland. Registered Number - C-1.           Bank of Ireland Global Markets