Good Performer And People

The Week Ahead ■The Bank of England's next move ■Is this the beginning of the end for the Eurozone? ■Fed officials reluctant to signal more easing ■Broader risk environment outweighs Japanese rhetoric The Bank of England's next move The BOE kept rates on hold when it concluded its May meeting last week; it also allowed the asset purchase program to come to an end. Since the UK slipped back into recession in Q1 2012 and the growth figures at the start of the second quarter have continued to look weak, the decision to hold interest rates was mostly down to the sticky outlook for inflation. The attention now turns to Wednesday's Inflation Report. The focus will be on the Bank's growth and inflation forecasts. The growth forecasts are likely to be revised lower. Even ...

FUNDAMENTAL OUTLOOK at 0800 GMT (EDT +0400) WORLD Broad USD strength amid the post-FOMC rise in US Tresury yields remains the dominant theme. While USDJPY broke above 84 in the Asia session, EURUSD is threatening to slip through 1.30. Although Japanese bonds were under pressure, USDJPY was driven by the widening 2y UST-JGB yield spread on expectations of a Fed-BoJ policy divergence. USDJPY still has upside risk, with the Fed backing away from more QE and BoJ boasting plenty of room to expand, amend, and extend its Asset Purchase Programme (APP) as early as next month – perhaps in conjunction with the release of its Outlook Report on April 27. Repatriation flows are not yet prominent in the run-up to the March 31 book closing in Japan. MoF data released earlier today confirmed that ...

Gold prices were on course for their biggest monthly rise since August on Tuesday, boosted by economic unease in Europe and the United States and raising the possibility of a climb toward last year's record high of just over $1,900 per ounce. Sentiment for gold at the end of January compares starkly with late December, when prices dropped by more than 10 percent in their biggest monthly fall since the collapse of Lehman Brothers in an investor dash for cash. A $400 price drop from last September's record $1,920.30 had left investors questioning whether gold had ended an 11-year rally. Gold was up 0.8 percent at $1,742.59 an ounce by 1523 GMT, having earlier touched $1,747.39 - its highest since mid-December and up some 11 percent on the month to date. Currency fundamentals turned ...

The EUR/USD pair fluctuated below the key resistance at 1.3200 today, on mixed but slightly negative macroeconomic data from the euro zone, where the German retail sales slumped 1.4% in December which came way off expectations of 0.9% growth. French consumer spending contracted as well; printing a 0.7% decline in December. As for labor data; change in the number of unemployed people in Germany during December decreased by 34,000 which was an upside surprise, on the other hand the Italian monthly employment rate climbed to 8.9% from 8.8% last month. The ongoing Greek debt talks between government and the IIF remain in the blackhead of traders, anticipating the final deal between the two parties, however with an optimistic eye, especially after the EU summit yesterday continued to back the ...

Fundamental Analysis EUR "The biggest challenge is to respond to the crisis in an adequate manner" - Christine Lagarde, the IMF Managing Director The International Monetary Fund is aiming to increase its lending capacity by 500 billion dollars to protect economies from the escalating euro zone debt crisis. GBP "Unemployment could become one of the main economic and political issues this year" - Peter Dixon, an economist at Commerzbank AG The number of people claiming unemployment benefits rose by 1.2 thousand to 1.6 million in December and the unemployment rate increased to 8.4 per cent, the highest rate in 16 years, said the Office for National Statistics on Wednesday. USD "Builders are seeing greater interest among potential buyers as employment and consumer confidence slowly ...

Hoping for something better than 2011's flat stock market, U.S. investors pushed shares higher on Tuesday to begin the new year, though questions remain about whether a rally can be sustained. The broad S&P 500 index closed at its highest since late October as traders, with cash on hand for the new year, welcomed better-than-expected German and Chinese economic data. The upbeat response was reinforced by U.S. economic reports showing construction spending and factory activity beat economists' forecasts. "There were some good economic numbers from outside the U.S., and people have cash to invest for the new year so that's driving up prices," said Giri Cherukuri, head trader at OakBrook Investments in Lisle, Illinois. "It's a good start but we'll have to wait and see for the trend." ...

American investors returned from their Labor Day holiday to face another laborious trading day on Wall Street. As your California editor pecks away at his keyboard this afternoon, the Dow Jones Industrial Average is down more than 200 points to within spitting distance of 11,000. For the first three trading days of September 2011, the Dow has tumbled more than 600 points — or about 5% — the worst three-day start for the month of September in the history of the US stock market. (Thanks to CNBC for this utterly meaningless statistic). As it happens, the Dow is also down about 5% for the year-to-date, and down about 5% from its record high of October 2007. “Down 5” is not exactly the new “up,” but it feels like it. Over in the Old World, the best-performing stock market in the European ...

(Reuters) - The Swiss franc and other safe-haven currencies remained under pressure on Tuesday while commodity currencies held firm after a solid performance by riskier assets the previous day, although persistent worries about the global economy mean the tide could turn at any moment. The euro also held near a two-month high hit on Monday and some traders think it may have broken above its holding pattern of the last few months, although many market players said overwhelming debt problems in the euro zone were likely to keep the single currency in check. "Looking at the tension in the dollar money market, it's hard to see risk asset prices continuing to rise," said Minori Uchida, senior analyst at Bank of Tokyo-Mitsubishi UFJ. "The market is essentially in a lull." A combination of ...

In today’s column, I’d like to share with you a few ideas I presented at the recent Agora Financial Investment Symposium in a speech titled You Can’t Make This Stuff Up. I called it that because it’s hard to fathom serious people writing lines like this: The renewed willingness and confidence to spend money we don’t have is vital to the continuing recovery. That gem comes from The New York Times. Unfortunately, it reflects a common opinion. When I read stuff like that, I think we are truly doomed. I mean, is this really that hard? Spending money we don’t have is what got us into this mess in the first place! The US debt ceiling fiasco makes that clear. The US is bleeding money. Every month requires huge amounts of financing just to keep the lights on. So far, creditors have been ...