It sounds like the market has slightly recovered from the stress, what it faced after FRS had announced the increase of the discount rate. In the beginning of the trades on Monday there were efforts to make a pressure upon the “buck” amidst the opinions that the response to the rates increase was overdue. However, under the conditions of the absence of significant news and the Euro zone’s troubles that further hang like a sword of Damocles all resolved itself to a very sluggish and less volatile trading within very narrow ranges. The data published on Monday may be viewed as an afterthought, and that was in general justified with the absence of any response from the market thereupon their presentation. The Federal Reserve Bank of Chicago has published the national activity index for January. The indicator resided within the positive sector, what proved the economic increase in the USA. In accordance with the represented report the index grew up to 0.02 against -0.58 in December. That was a consequence of the raise of the indicator’s producing components. Meanwhile, the intensity of the Texas manufacturing decreased as that was stated in the FRS Dallas report, which was also published on Monday. Following the represented data the manufacturing index fell down to 2.3 in February against 7.4 in January. The total provision managers’ index came back to the negative area and fixed -0.1 after 8.3 in January, at that the advancing indicator of the new orders collapsed till -6.0 against 26.8 in January. Still, the appearance of the Head of FRS of San Francisco D. Yellen hasn’t also afforded ground for the activity’s increase at the market as this speech pinpointed that the time was not yet ripe for the stiffening of the monetary policy making with it more contributions to the efforts of this speaker’s colleagues who also perceived the market last Friday that the rates would be maintained low for a long time. Today the news background includes the data from the housing markets of the US megacities. The price index form S&/Case-Shiller for the 4th quarter will probably show the price growth till -1.2 per cent y/y after -8.9 per cent y/y. Besides, the data of the manufacturing index from FRS Richmond, here the balance will probably be observed, 0.0 points, after the occurrence of this indicator within the negative segment, -2.0. Though, the main object of attention will be the consumer confidence index from the Conference Board for February. This indicator is expected with the decrease to 55.0 after 55.9 and that can make some damage for the “buck”, especially if the result turns out to be even much lower.
EUR The beginning of the trading in the first day of the weekly session was up note for the euro. The common currency began the day from the enforcement; thereupon the rumors had appeared in a German newspaper as if it was the rescue plan for Greece in amount of 25 Billion of euro. However, the Ministry of Finances of Germany hurried to deny as the representative of the Ministry has announced that no decision had been adopted in concerns of the aid still yet. Against this background the euro returned under the pressure; but there were no active sales-outs. The Monday trading was remarkable for a dull movement within a narrow range. Except for the gossips about the aid from the side of Germany some more information appeared, which is also non-confirmed by the way, that the Greek state authorities were going to arrange the tender for sale of 10-year bonds in the amount of 5 Billion of euro. No economic statistics came from EU on Monday. However, today the business behavior indexes of Germany will be published for February following the report of Ifo Institute. As forecasted, the business behavior index is going to grow up to 96.1 from 95.8; the current economic situation’s estimation index will rise to 91.9 after 91.2; finally, the economic sentiment index may demonstrate the decrease to 100.5 from 100.6. The Ifo information is supposed to afford grounds for presumption of anticipatory steady increase of the economic activity in Germany. Nevertheless, this information is unlikely to become the change agent for the market opinions until the Greek troubles haven’t been solved yet. However, the technical factors may come to the rescue to the “bulls” as the first note a serious enough “oversold” of the euro.
GBP The British pound fought for leadership against the US dollar at the session on Monday obstinately enough and fixed a little plus. The trading was carried within an extremely narrow range and was remarkable for the mixed success of the “bulls” and the “bears”. The consciousness that the sales-outs concerning the “cable” had been too large the previous week obviously encouraged the investors to the purchases. However, the anxieties as for the economic weakening, the high level of the British state debt, and finally, the anticipatory elections, which in their turn may afford the majority of the voices to none of the political parties and so put a huge question mark over the rapid and successful recovery of the state budget, have leveled the state of affairs and favored the sales. Nothing was published on Monday in concerns of the economic statistics as for the “Isles”. Though, today the data about the mortgage loans capacity will be represented. As forecasted, BBA will inform about the decrease of the indicator till 45.3 thousand after 45.9 thousand before. Moreover, the minutes of the latest BoE inflation report will be also represented to the market. most likely, these data will trigger no reaction at all, though there’re risks of the pressure upon the GB pound in the moment of the mortgage data publication if they turn out to be much worse than expected. The corrections to the present market situation may be contributed by today appearance of the Deputy Head of the Bank of England P. Tacker, because, as it seems, the functionaries of BoE quite often share thoroughgoing information to the market.
JPY The Japanese currency increased against the US dollar in the first day of the trade. Obviously, the savor to the profit fixation as for the pare of USD/JPY hasn’t been used up yet, but it’s also possible enough, the interest to the yen will increase amidst the Chinese representatives’ announcements about the necessity to provide the Yuan’s stability; that in its turn has afforded grounds for presumptions that revaluation of the national currency wasn’t planned in nearest future in the “Heavenly Empire”. The statistics as for the Japanese economy demonstrated some improvement in the retailing in January. The supermarket retailing grew up a bit; the minus shortened to -4.9 per cent y/y after -5.0 per cent, and in 24-hours ones – till -5.3 per cent from -5.5 per cent. Nothing essential is expected from Japan today. The yen will be further traded under the influence of the exterior information and first of all from the USA as usual.
February 23, 2010