| The market takes advantage of some peace before the FOMC There have been no releases in Europe so far.
The following economic releases are due today:
Q4
Swiss Industrial Production (YoY) +8.2% January
Italian Trade Balance – Total EUR -3410mn
Italian Trade Balance – EU EUR 697.5mn February
U.K. CPI (MoM) +0.8%
U.K. CPI (YoY) +2.5%
U.K. CPI Core (YoY) +1.4%
U.K. RPI (MoM) +0.8%
U.K. RPI (YoY) +4.2%
U.K. RPI excl mortgage (YoY) +3.7%
U.S. PPI (MoM) +0.4%
U.S. PPI (YoY) +6.8%
U.S. PPI Excl food & energy (MoM) +0.2%
U.S. PPI Excl food & energy (YoY) +2.1%
U.S. Housing Starts 995K
U.S. Building Permits 1023K The FOMC are due to announce their interest rate decision
And of course is the Fed’s day again. It has already wielded the hatchet by hacking 2 ¼% from September and the market is anticipating a further 1% today down to a mere 2.0%. The intention is to reassure markets that it is willing to act aggressively but the collapse of Bear Stearns has undermined any support from this action.
What may be more critical are the quarterly results from Goldman Sachs and Lehmans which are also due later today while Morgan Stanley reports tomorrow. The U.K.’s telegraph newspaper warned that Goldmans could write down a further bn from assets. Others have suggested that Bush should use public funds to bail out Wall Street but Paulson has been firm on this point in not wanting to bail out bad business activity.
With FX liquidity beginning to suffer the risks are for continued volatility as the market plays pass the parcel with unwanted Dollar longs. However, with Nukaga’s warning there is every bit as much risk on the upside if the central banks choose to intervene in thinner than normal markets…
Note important support and resistance areas:
USDJPY EURUSD USDCHF GBPUSD
Res: 98.06-42 1.5880-01 0.9955-85 2.0130-69
Res: 97.55-73 1.5790-14 0.9866-95 2.0044-88 Spt: 96.67-84 1.5710-50 0.9770-85 1.9928-66
Spt: 95.71-25 1.5580-10 0.9703-40 1.9867-84 See Also
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