{"id":772,"date":"2009-03-05T15:54:44","date_gmt":"2009-03-05T20:54:44","guid":{"rendered":"http:\/\/countingpips.com\/fx\/?p=772"},"modified":"2009-03-05T15:54:44","modified_gmt":"2009-03-05T20:54:44","slug":"fundamental-outlook-at-1500-gmt-est-0500-15","status":"publish","type":"post","link":"https:\/\/www.investmacro.com\/fx\/2009\/03\/05\/fundamental-outlook-at-1500-gmt-est-0500-15\/","title":{"rendered":"Fundamental Outlook at 1500 GMT (EST + 0500)"},"content":{"rendered":"

By GCI Fx Research<\/span><\/p>\n

\u20ac<\/strong><\/p>\n

The euro depreciated vis-\u00e0-vis the U.S. dollar today as the single currency tested bids around the US$ 1.2480 level and was capped around the $1.2665 level.\u00a0\u00a0 As expected, the European Central Bank voted to decrease its main refinancing rate target by 50bps to 1.50% from 2.00%, the lowest level in the ECB\u2019s ten-year history.\u00a0 At the same time, the ECB released a grim set of economic forecasts.\u00a0 The ECB now sees inflation remaining below the ECB\u2019s target for the next eighteen months and this suggests more rate cuts will follow.\u00a0 There is also a significant chance the ECB will have to follow the Fed\u2019s and BoE\u2019s lead by conducting massive asset-purchasing programs to steer market rates towards 0%.\u00a0 One major difficulty the ECB will face is the lack of a single eurozone-wide bond market.\u00a0 ECB policymakers who will conduct the probable massive credit easing or quantitative easing operation must decide which countries\u2019 assets to purchase in the primary and secondary markets, a decision that will invariably lead to criticism.\u00a0 Some eurozone countries have recently had their credit ratings downgraded and this will render the ECB\u2019s operations that much more difficult.\u00a0 ECB President Trichet today report EMU-16 gross domestic product may contract in 2010.\u00a0 Data released in the eurozone today saw EMU-15 gross domestic product tumble 1.5% q\/q and 1.3% y\/y.\u00a0 Additionally, French January producer price inflation was off 2.0% m\/m and 2.7% y\/y.\u00a0 Moreover, German January retail sales fell 0.6% m\/m and 1.3% y\/y. In U.S. news, data released in the U.S. today saw weekly initial jobless claims decline 31,000 to 639,000 last week while continuing jobless claims were off 14,000 to 5.106 million.\u00a0 All eyes will be focused on tomorrow\u2019s U.S. February non-farm payrolls report with most economists preparing for a very weak report, especially after ADP reported 697,000 private sector job losses last month.\u00a0 Other data released today saw Q4 non-farm productivity off 0.4% from +2.2% in Q3 while unit labour costs grew 5.7% from 3.5% in Q3.\u00a0 Nonetheless, productivity had its best annual result in four years last year.\u00a0 The Federal Reserve released its Beige Book yesterday and it indicated the economic contraction worsened in January and March with no improvement expected in the short-term.\u00a0 Euro bids are cited around the US$ 1.2385 level.<\/p>\n

\u00a5\/ CNY<\/strong><\/p>\n

The yen appreciated vis-\u00e0-vis the U.S. dollar today as the greenback tested bids around the \u00a598.40 level and was capped around the \u00a599.65 level.\u00a0 Data released in Japan overnight saw business investment off 17.3% y\/y in Q4 2008, the seventh consecutive quarterly decline.\u00a0 These data will likely cause a downward revision to Q4 gross domestic product data that recently evidenced a provisional 12.7% annualized contraction.\u00a0 Revised GDP data will be released on 12 March.\u00a0 The Nikkei 225 stock index climbed 1.95% to close at \u00a57,433.49.\u00a0 U.S. dollar offers are cited around the \u00a5104.15 level.\u00a0 The euro moved lower vis-\u00e0-vis the yen as the single currency tested bids around the \u00a5123.00 figure and was capped around the \u00a5125.75 level.\u00a0 The British pound moved lower vis-\u00e0-vis the yen as sterling tested bids around the \u00a5138.55 level while the Swiss franc moved lower vis-\u00e0-vis the yen and tested bids around the \u00a583.35 level.\u00a0 The Chinese yuan appreciated vis-\u00e0-vis the U.S. dollar as the greenback closed at CNY 6.8409 in the over-the-counter market, down from CNY 6.8434.\u00a0 Traders are speculating the Chinese government will announced an additional stimulus plan to maintain at least an 8% growth rate in 2009.<\/p>\n

\u20a4<\/strong><\/p>\n

The British pound depreciated vis-\u00e0-vis the U.S. dollar today as cable tested bids around the US$ 1.4035 level and was capped around the $1.4230 level.\u00a0 As expected, Bank of England\u2019s Monetary Policy Committee reduced its key interest rate by 50bps to 0.50%.\u00a0 More importantly, however, Bank of England reported the U.K. Treasury will permit the central bank to purchase up to \u20a4150 billion in assets to grow the money supply.\u00a0 Chancellor of the Exchequer Darling indicated at least \u20a450 billion must be utilized to purchase private-sector assets.\u00a0 This amounts to a de facto quantitative easing policy and the BoE will purchase up to \u20a475 billion in gilts over the next three months.\u00a0 Notably, Darling also said the government won\u2019t use the BoE\u2019s operations as an excuse to issue more debt and make long-term financing needs less manageable.\u00a0 Data released in the U.K. today saw Halifax January house prices declined 2.3% m\/m and 17.7% y\/y.\u00a0 Cable bids are cited around the US$ 1.3740 level.\u00a0 The euro moved lower vis-\u00e0-vis the British pound as the single currency tested bids around the \u20a40.8850 level and was capped around the \u20a40.8940 level.<\/p>\n

Daily Market Commentary provided by GCI Financial Ltd<\/strong><\/a>.<\/strong><\/p>\n

GCI Financial Ltd (\u201dGCI\u201d) is a regulated securities and commodities trading firm, specializing in online Foreign Exchange (\u201dForex\u201d) brokerage. GCI executes billions of dollars per month in foreign exchange transactions alone. In addition to Forex, GCI is a primary market maker in Contracts for Difference (\u201dCFDs\u201d) on shares, indices and futures, and offers one of the fastest growing online CFD trading services. GCI has over 10,000 clients worldwide, including individual traders, institutions, and money managers. GCI provides an advanced, secure, and comprehensive online trading system. Client funds are insured and held in a separate customer account. In addition, GCI Financial Ltd maintains Net Capital in excess of minimum regulatory requirements.<\/span><\/p>\n

DISCLAIMER: GCI\u2019s Daily Market Commentary is provided for informational purposes only. The information contained in these reports is gathered from reputable news sources and is not intended to be U.S.ed as investment advice. GCI assumes no responsibility or liability from gains or losses incurred by the information herein contained.<\/span><\/p>\n","protected":false},"excerpt":{"rendered":"

By GCI Financial – The euro depreciated vis-\u00e0-vis the U.S. dollar today as the single currency tested bids around the US$ 1.2480 level…<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[],"tags":[],"class_list":["post-772","post","type-post","status-publish","format-standard","hentry"],"_links":{"self":[{"href":"https:\/\/www.investmacro.com\/fx\/wp-json\/wp\/v2\/posts\/772","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.investmacro.com\/fx\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.investmacro.com\/fx\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.investmacro.com\/fx\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.investmacro.com\/fx\/wp-json\/wp\/v2\/comments?post=772"}],"version-history":[{"count":0,"href":"https:\/\/www.investmacro.com\/fx\/wp-json\/wp\/v2\/posts\/772\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.investmacro.com\/fx\/wp-json\/wp\/v2\/media?parent=772"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.investmacro.com\/fx\/wp-json\/wp\/v2\/categories?post=772"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.investmacro.com\/fx\/wp-json\/wp\/v2\/tags?post=772"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}