Market Commentary 18.03.09
Levels
€/£ €/$ £/$
Current 0.9330 1.3010 1.3952
Start of Month – 0.8848 1.2587 1.4223
Start of Year – 0.8739 1.2903 1.4771
Market Sentiment
Today- Flat Up Flat
This week – Up Up Up
Three Month – Up Flat Down
In the News:
RBS Chairman Sir Philip Hampton revealed some “positives” in 2009 after benefiting from buoyant corporate banking activity since the start of the year. Sir Philip’s interview with the FTfollows news from Barclays that it had enjoyed a good start to ’09 with Citigroup and Bank of America also posting positive trading statements for the start of the year.
Draft IMF forecasts show that the UK could be in a deeper, longer recession than most which could continue well into 2010 and up until the next General Election. In an article in the Times Online, the IMF survey predicts the UK economy will shrink by a further 0.2% in 2010.
American housebuilding rose 22% last month, surprising many and leaving economists split as to whether this shows a bottoming out in the market or not. Read the full article from the Times Online here
The US PPI (producer price index) rose last month compared to January – this figure was less than the 0.3% expected figure but enough to keep deflation fears sidelined, for now at least.
Key Data Today:
Actual: 0.1% Cons.: 0.1% Previous: 0.1%
BoJ Interest Rate Decision is announced by the Bank of Japan. If the BoJ is hawkish about the inflationary outlook of the economy and rises the interest rates it is positive, or bullish, for the JPY. Likewise, if the BoJ has a dovish view on the Japanese economy and keeps the ongoing interest rate, or cuts the interest rate it is negative, or bearish.
UK:
The minutes of the BoE MPC meetings are published two weeks after the interest rate decision. The minutes give a full account of the policy discussion, including differences of view. They also record the votes of the individual members of the Committee. If the BoE is hawkish about the inflationary outlook for the economy, then the markets see a higher possibility of a rate increase, and that is positive for the GBP.
US:
Actual: released at 12.30 GMT Cons.: n/a Previous: 0.3%
The Consumer Price Index released by the US Department of Laboris a measure of price movements by the comparison between the retail prices of a representative shopping basket of goods and services. The purchase power of USD is dragged down by inflation. The CPI is a key indicator to measure inflation and changes in purchasing trends. A high reading is seen as positive (or bullish) for the USD, while a low reading is seen as negative (or Bearish).
Actual: released at 12.30 GMT Cons.: n/a Previous: 0.2%
The Consumer Price Index Ex Food & Energy released by the US Department of Laboris a measure of price movements by the comparison between the retail prices of a representative shopping basket of goods and services. Those volatile products such as food and energy are excluded in order to capture an accurate calculation. A high reading is seen as positive (or bullish) for the USD, while a low reading is seen as negative (or Bearish).
Actual: released at 18.15 GMT Cons.: 0.25% Previous: 0.25%
The Board of Governors of the Federal Reserveannounces an interest rate. This interest rate affects the whole range of interest rates set by commercial banks, building societies and other institutions for their own savers and borrowers. It also tends to affect the exchange rate. If the Fed is hawkish about the inflationary outlook of the economy and rises the interest rates it is positive, or bullish, for the USD.
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