Latest news on European Mid Morning Update 8th April 2008
| Forex talks the talk but no one is walking the walk? Releases from Japan: The survey of “traders on the street” including taxi and truck drivers, department store sales staff, and restaurant and shop owners has seen a mild improvement in current conditions over the past month to extend the recovery to two months. However, it remains firmly entrenched below 50 which reflects the majority consider the conditions are weakening. However, they remain pessimistic over the outlook for the coming months as this component dropped to its lowest level since December 2001. It prompted the cabinet office to comment that the workers’ perception of the economy remains bleak.
Remember the end of last year when U.K. building societies pooh-poohed the suggestion that house prices would decline this year? Well, not far to go now before that even occurs. With the nerves rather frayed, some lenders pulling out the market for new clients and tighter lending conditions there aren’t too many who would bet against a drop in prices this year now… However, the claim still is that the employment market remains firm and the fundamentals of the housing market remain firm so significant losses are not anticipated.
The minutes of the March 18th FOMC meeting are due to be published
Indeed, ahead of the weekend’s G7 conference central bankers are taking the opportunity to announce their individual agendas with the EU’s Juncker wanting to bend President Bush’s ear over tea and cakes, while France’s Largarde, the U.K.’s Darling and also Japan’s Nukaga all wanting to push the case for a coordinated response to the market’s current malaise. Before the G7 meeting comes the rate decisions from the BOJ (Wednesday) and the ECB & BOE (Thursday) with the only hope of any change coming out of the U.K. However, even that may be more hope and bluster than a certainty following comments from several BOE officials who have all stated that there hasn’t been any real sign of significant slowing in the U.K. The risks are there and with house prices falling even faster than consumer’s confidence there only seems to be one outcome. Even though Asia uncharacteristically came out at the open with all guns blazing as the Dollar quickly shot lower, the ability to maintain that pressure has been lacking for some while. With out a doubt the market wants to be bearish but the ability to sustain downward pressure on the Dollar has failed on several occasions. The temptation is to expect continued consolidation for the rest of the week but with no apparent desire by central banks to intervene and the only prospect for a limp statement saying that volatility is undesirable and Forex levels should reflect (their assessment) of economic fundamentals frankly there is little to stop the Dollar moving lower. The problem is it needs a push but no one is stepping up to lead the way…
USDJPY EURUSD USDCHF GBPUSD Spt: 101.88-06 1.5682-98 1.0044-65 1.9727-55 See Also
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