Tuesday, October 20, 2009

Asia swept the anti-risk-taking wave, which came from the Friday trading

Published on Friday, statistics from the U.S. and corporate results for the 3 quarter time the world was reminded of how fragile and uneven to really restore the economy and the markets chose to cut risky deals in anticipation of the weekend. Despite the fact that the overall figures for industrial production and capacity utilization came at a decent level, they must be adjusted to effect sales of cars under the "trash for NAL. If you look deeper, then the overall growth of 0,7% sales excluding cars rose just 0.4%, and annualized still fall to 6,1%. Preliminary University of Michigan confidence index was 69.4, also justified the forecast on the level of 73.1 and down from the previous value of 73.5. At this time, at the front of corporate reports for the 3 rd quarter of Bank of America brought a shadow over the previously published fairly positive results, showing a larger-than-expected loss caused by the increasing non-payment of consumer debts.

On Friday, all the media attention was centered around China, and at the weekend the U.S. Treasury Department emphasized that the capacity of China's gold reserves may slow down the process of equalization of global imbalances, but this time do not hesitate to call the Chinese government currency manipulator. Similar sentiments were revived in Europe, where the head of eurozone finance ministers Jean-Claude Juncker announced that he, the head of the ECB's Trichet and Commissioner Almunia EU monetary issues are going to visit China later this year to discuss the exchange rate of the yuan. This visit took place in November 2007 when the EU requested to accelerate the strengthening of the yuan. Then the request was rejected by the then acting Prime Minister Wen Jiabao.

Meanwhile, some Chinese representatives have voiced a more positive assessment of economic recovery. The chief economist of the National Bureau of Statistics said that the V-shaped recovery of the Chinese economy can continue next year. Another representative of the Committee for National Development and Reform Commission (National Development and Reform Commission) also noted that China was easily able to achieve growth rate of 8% in 2009, since only the first 9 months of growth is already accounted for 7%.

When in Asia, kicked off the new trading week, traders have attracted the attention of the articles published in the press at the weekend, which stated that currently there is a tendency to reduce risky investments, and therefore the correction of some particularly distinguished currencies (euro, pound and Australian dollar) for some time to continue. Pressure on the Australian dollar, the victim rollback dollar on Friday, intensified after the publication of the editorial note to the Australian Financial Review, which said that markets have misunderstood recent comments RBA Chairman Stevens, and that the RBA would prefer to wait for new data before raising rates in November . Mainly, the article was focused on discussing the meaning of the phrase "can not afford to falter in the comments President and inclined to believe that the phrase was more characterized by the rate of the October decision, and should not be regarded as a signal to the new increases. The initial depreciation of the Australian dollar was suspended in mid-morning, when the RBA assistant to the chairman Lowe said that there are reasonable grounds for optimism about the long-term economic prospects of Australia.

Pound also adjusted its recent upward movement, and in the beginning of the session showed the highest momentum. Pressure came from articles published in journals Sunday Times and Telegraph. The first of these comments were published by a member of the Monetary Policy Committee Posey. Posey said that he supports the continuation of programs to increase the money supply and that is not so concerned about exceeding the target level of inflation in the current environment. Words related to the program QE, contradicted the statements of other members of the Bank of England, Fisher and Bean, made last week, which, in turn, chose the fence. Fuel to the fire poured article in the newspaper Telegraph, which quoted the words of representatives of the CBI (Confederation of British Industries) that Britain faces a risk of crisis the pound, if the public finances will not be placed on the control to the years 2015-16.

This morning also attracted the attention of a blog entry LSE Professor Willem Byutera, published in the Financial Times, where he urged the ECB to "seriously reflect" on the strengthening of the euro. He noted that the euro undermines the prospects of export and import-competing sectors of the euro area, which leads to excess capacity and unemployment. The euro / dollar in early Asian trading fell below 1.4850 marks the first time in three days, but later was able to win back losses. It will probably have to wait and see what the impact will developments in Europe to assess the length of such a correction.

Another factor in favor of the possible continuation of the restoration of the dollar served as an analytical article in Barrons, published at the weekend. The author encourages the Fed to stop talking about an exit strategy and begin to implement it. According to him, blames soaring stock markets, commodity markets and the dollar's decline began almost zero short-term rates, and excessive talk only irritated trading partners and foreign creditors, the United States.

Today on the statistical front all is quiet, as neither in Europe nor in the North American region, will not anything interesting. During the week the market's attention gets hold of the Bank of Canada meeting (rates continue, but will change if current levels?), Which will be held on Tuesday, as well as the minutes of the meeting of the Bank of England, published on Wednesday. Against the background of Friday's GDP report for the British pound may receive additional support, as expected, that the economy will start recovering from the recession and will show the first positive quarterly performance since the 1 quarter of 2008. Other data include index PPI, early housing and construction permits in the U.S. (Tuesday), retail sales in Canada (Thursday) and study IFO in Germany (Friday).


Saxo Bank

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