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Fed Says Little New

January 26, 2011
The FOMC did what was largely anticipated. Recognizing that consumption has picked up, it slightly upgraded its assessment of the economy.
However,this has been blunted by labor market assessment. In December it has said that the deterioration in the labor market was abating but now says the improvement is not sufficient. This slightly more emphasi…
Fed Says Little New Fed Says Little New Reviewed by Marc Chandler on January 26, 2011 Rating: 5
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UK Surprises Again

January 26, 2011
For the second consecutive session, the UK has surprised the market. The impact of yesterday's shocking 0.5% Q4 contraction has been blunted by the unexpected BOE vote 7-2 in favor of steady interest rate policy, as the newest member (Weale) joined Sentance's dissent for a 25 bp rate hike. Given that the MPC would not have known that the e…
UK Surprises Again UK Surprises Again Reviewed by Marc Chandler on January 26, 2011 Rating: 5
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Bloomberg Pannel: German View of European Debt Bloomberg Pannel: German View of European Debt Reviewed by magonomics on January 25, 2011 Rating: 5
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Sterling Shocked

January 25, 2011
The UK surprised the markets by reporting that Q4 10 GDP did not expand slowly as the consensus expected, but actually contracted by 0.5%. The economy last contracted in Q3 09. A full breakdown of the report is not made available until the next report in late February. However, the preliminary numbers suggest that the service sector contracted 0.5…
Sterling Shocked Sterling Shocked Reviewed by Marc Chandler on January 25, 2011 Rating: 5
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EFSF and Euro

January 24, 2011
The European Financial Stability Fund (EFSF) is planning its first issue this week. Talk was of a 3-5 bln euros of a 5-year issue priced 8-10 bp on top of swap rates. This would imply a yield of about 2.85% compared to 2.32% German 5-year yield. The EFSF bonds are expected to be priced tomorrow. As was the case of the EFSM bonds sold earlier this …
EFSF and Euro EFSF and Euro Reviewed by Marc Chandler on January 24, 2011 Rating: 5
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Monday Market Forces

January 24, 2011
The tick up in the flash euro zone composite PMI to 56.3 from 55.5 in December has not done the euro any favors with new session lows being recorded in quiet late morning turnover in London. We have emphasized in explaining the euro's recovery over the past two week to shifting interest rate expectations. Since the ECB meeting a number of ECB …
Monday Market Forces Monday Market Forces Reviewed by Marc Chandler on January 24, 2011 Rating: 5
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Chinia Speculation

January 21, 2011
Speculation that China will tighten monetary policy this weekend is likely to prove for nought. The focus may already be shifting to next week, ahead of the Lunar New Year celebration. We have suggested that medium term traders need not get so caught up in the guess work of what the PBOC will move and focus instead on the fact that more tightening…
Chinia Speculation Chinia Speculation Reviewed by Marc Chandler on January 21, 2011 Rating: 5
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Thoughts on the Evolution of the Foreign Exchange Market

January 21, 2011
The Bank for International Settlements, set up after WWI to collect war reparations from Germany, who at the end of last year made its last payment, organizes a global survey every three years, conducted by central banks, to assess the parameters of the foreign exchange market, such as turnover, geographic distribution, and instruments.
The prelim…
Thoughts on the Evolution of the Foreign Exchange Market Thoughts on the Evolution of the Foreign Exchange Market Reviewed by Marc Chandler on January 21, 2011 Rating: 5
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Euro Firm, Consolidiative Tone Elsewhere

January 21, 2011
The euro made new highs since late November today. Investors have shrugged off the latest comments from Fitch that outlined potential triggers to credit downgrades of the periphery. In fact this has been a good week for peripheral bonds. Ten year yields have fallen 16-25 bp in Greece, Portugal and Spain. Ireland is the exception as its 10-year yie…
Euro Firm, Consolidiative Tone Elsewhere Euro Firm, Consolidiative Tone Elsewhere Reviewed by Marc Chandler on January 21, 2011 Rating: 5
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