MetaTrader 5, a new version of the popular terminal MetaTrader

Trading Platform MetaTrader 5 is intended to trade on Forex, CFD and Futures, as well as the stock markets. This gives the opportunity to trade on several stock exchanges and financial markets from one account to Metatrader4 It was not possible. Also changed the concept of working with the positions by new orders. Terminal MT5 available in English and Russian interface.

Stock glass (Market Depth)

In addition, realized Metatrader 5 Market Watch - stock glass, but to see it live yet possible. Stock glass - a table or a graphical display of the current sentiment in any market. Otherwise it is called "window applications.

In practical terms, exchange glass may be useful short-term or medium-term traders, as well as pipsovschikam. Using a glass, you see not only the schedule with historical prices, but the real sentiment of the market at the moment. We see that the glass in MT5 yet realized quite pathetic, but let's hope that with time it will make it more funktsonalnym.

Here's how, for example, looks like glass in the terminal Open E Cry:

Prevent locking

Terminal MetaTrader 5 (MT5) now has a drastic difference compared with MT4, d such concepts as the position, the transaction and the warrant. Here each traded instrument can be only one position. Now the order - an order for execution of transaction, which is formed as a result of the transaction. Position of the same - is the amount of positions open on a particular instrument. The figure shows the differences Metatrader4 from Metatrader5:

It is easy to guess that locking will now be prohibited. Good or bad? Turn to the document NFA, which describes the reasons for locking http://www.nfa.futures.org/

At NFA, there are two objections to this strategy. First, its use leads to the fact that customers were losing the opportunity to earn deals. Secondly, its use leads to increased financial costs of clients. In particular, doubling the cost of inputs and outputs on the market. In the OTC market customer, which opens in opposite directions, pay a double commission. Similarly, currency trader pays the full spread on two occasions (buying into the upper boundary of a spread, selling at the lower boundary), instead of paying the average of the spread of input and output. In addition, increases and other costs. In a typical transaction, the customer receives a "percentage" for a long position and pays "interest" on the short position. Because the two positions reflect each other's mirror image, we can expect that the income and payments will be equal to zero. In practice, however, the amount that the client receives a long position is always less than what he pays for the short position. As these transfers occur daily in the rollover of positions, eventually rising losses.

The above costs are an integral part of the strategy, but there are additional losses that may arise under certain circumstances. Forex dealers usually determines the balance of funds in the account, hoping to eliminate the price of a particular position, using the price Bida for long positions and the price offera for short positions.

If the client long enough to hold two opposite positions, it will lead to the fact that his funds could fall below the required level of security deposit. Moreover, if the spread on the currency pair will rise that may occur with increasing volatility in the market or preparing forex dealer to critical market events, customer deposit may be reduced even more rapidly. If an increase in deposit spreads will not meet the minimum requirements for the deposit, the account can be liquidated (margin-call) on unfavorable to the client's costs, despite the fact that the exposure risk for the client is zero.

This strategy also creates opportunities for abuse. Forex broker may advertise this strategy inexperienced clients to earn extra spreads. Experienced client can use this scheme to launder money, incurring losses deliberate on current costs. Managers can use it for fraud and cheating their customers.

Thus, developers Metatrader 5 were pretty good and correct reasons for the changes to work with orders.


Analytical tools Metatrader 5

Analysis of the dynamics of prices of financial instruments - the most important component to successful trading. In MetaTrader 5 developers have tried to give traders as much as possible analytical capabilities.

To services of traders as in the past three kinds of graphs: linear, Japanese candlesticks and bars. For the analysis of these data you can use the 38 built-in technical indicators, 39 graphics and many MQL5-indicators. All of these analytical tools can be combined in different ways: on the indicators can be cast objects to construct indicators from other indicators, and so on. For convenience, the indicators are divided into groups: trend, oscillators, volume, Bill Williams, and others the opportunity to create their own groups and move the indicators between them.

History quotes in the terminal MetaTrader 5 is stored only in the form of minutes and the (M1), and all graphics are built on them. This decision has increased the number of timeframes to 21, and for the analysis of quotations can be used any time, from minute to monthly. The main limitation is the timeframe of their multiplicity: one hour must be an integer minute periods. This rule satisfy the following timeframes: M1, M2, M3, M4, M5, M6, M10, M12, M15, M20 and M30.

Storage format of historical data in the terminal MetaTrader 5 has a high efficiency. For example, the minute quotation history on GBPUSD over ten years is only about 10 megabytes. Pumped the story once, you can build all the graphics on this instrument from M1 and ending with MN1.


Working with orders to MT5

In terms of opening orders in MT5 a lot of innovations. But the dialogue itself has remained virtually unchanged.

In addition to the general rules of execution of orders given by the broker, the trader can specify additional conditions in the field "policy performance" (valid only on the stock market) order window:

1) All or nothing (All or None)
When you specify such conditions, the transaction can be accomplished only in the specified volume and costs equal to or better than specified in the warrant. If the market is currently not present enough of a financial instrument, then the warrant will not be executed.

2) Remove the residue (Cancel)
In this case, a trader agrees to make a deal on the most affordable on the market volume in the range specified in the warrant and at a price equal to or better than this. In this case the missing amount of additional applications not
exposed.

3) Redo (only for deferred execution)
When you specify such conditions the trader agrees to make a deal on the most affordable on the market volume in the range specified in the warrant and at a price equal to or better than this. In this case the missing amount will be put up additional application at the price specified in the warrant.

Add more types of pending orders - they are now six:

• Buy Limit - an order to buy trading at a price «Ask» equal to or better than the price specified in the warrant. At current price level is greater than the value specified in the warrant. Typically, this type of warrant in anticipation that the price, having fallen to a certain level, will increase.

• Buy Stop - an order to buy trading at a price «Ask» equal to or better than the price specified in the warrant. At current price level is less than the value specified in the warrant. Typically, this type of warrant in anticipation that the price, having reached a certain level and continue its growth.

• Sell Limit - an order to the merchant market at a price «Bid» of equal or better than the price specified in the warrant. At current price level is less than the value specified in the warrant. Typically, this type of warrant in anticipation that the price, having to a certain level, will fall.

• Sell Stop - the trade order to sell at «Bid» of equal or better than the price specified in the warrant. At current price level is greater than the value specified in the warrant. Usually this type of warrant in anticipation that the security price reaches a certain level and will continue to decline.

• Buy Stop Limit - this kind of warrant combines the first two types, as a stop order to set a limit order to buy ( »Buy Limit»). As soon as the future price «Ask» reaches the value specified in the warrant, the order will be processed «Buy Limit» at the level specified in the warrant. The current price level is less than the prices, which are to be set pending order.

• Sell Stop Limit - this type of order is a stop order to set a limit order to sell ( »Sell Limit»). As soon as the future price «Bid» reaches the value specified in the warrant, the order will be processed «Sell Limit» at the level specified in the warrant. The current price level is greater than the price at which will be set pending order. And the price of a pending order above the level of its installation.

Autotrading

For the development and use of advisors, custom indicators and scripts in the terminal MetaTrader 5 answers IDE MQL5. It consists MetaEditor 5, MetaTrader 5 Strategy Tester, MetaQuotes Language 5 (MQL5) and the client terminal MetaTrader 5, which are performed by experts. Note that the tester strategies yet, but his ideology is fundamentally different from that to which we are accustomed to in MT4.

Language for programming trading strategies MQL5 has a very high speed and performance on this indicator very close to the language of C + +. In comparison with MQL4 language faster in 4-20 times. This allows you to use more sophisticated experts who are able to handle large amount of information per unit time and, consequently, produce more accurate forecasts of price movements. In addition, new language is object-oriented, which facilitates and accelerates the development of counselors.

To write the expert used a MetaEditor 5, equipped with a new system of IntelliSense. It automatically adds the various language constructs and displays a prompt for the parameters of various functions. Built-in debugger allows you to quickly find mistakes and correct them. After completion of the work and the compilation of the expert, it automatically appears in the terminal and can be immediately put into work in the market.

5 MetaTrader Strategy Tester - a powerful tool for any developer experts. With its help you can get the results of behavior Adviser stories before launching an expert in real trading account. The detailed reports on the trading system will evaluate the advisor and to identify problem areas in it, as well as the expert to compare with other developments. In addition, optimization of experts to determine the most effective options within the variables and make your advisor profitable.

Conclusions

The new platform MT5 significantly better than the previous MT4 - access to the trading floors and object-oriented programming language MQL5 Metatrader raised to a new level. Of course, yet still looks damp and there is a large part of the functional, but with time, Metatrader5 will take a worthy place in the ranking of trading platforms.



Open a free demo account can be directly from the trading terminal MetaTrader 5.


Download Metatrader 5 (7.5 MB)

The growth of U.S. GDP in the fourth quarter amounted to 5,9%

According to the U.S. Department of Commerce, the growth of the economy in the fourth quarter of last year in the refined data was slightly higher than previously reported.

U.S. GDP grew in the final quarter of last year to 5,9% in that time, as initially reported it increased by 5,7%. Note that the revision rate upward in line with guidance of experts.

Compared with the originally published data on GDP was upwardly revised business supplies, business investment and exports.

Hedge Funds Try 'Career Trade' Against Euro

Some large hedge funds started to make bearish bets against the euro, which reminds trading activity at the peak of the financial crisis in the United States.

Great rates occurred at the meetings, such "ideological dinner, which was held earlier this month, brought together such hedge fund giants such as SAC Capital Advisors LP and Soros Fund Management LLC. How to tell people close to the event, during a dinner organized by a small investment bank in a private townhouse in Manhattan, a small group of "star" managers of hedge funds, agreed that the euro could fall to parity with the dollar.

George Soros (George Soros), under which the $ 27 billion of assets, has publicly warned last week that if the EU does not mend its financial situation, the euro will collapse.

Currency pairs signaled that the major financial players are ready to make a few bets to attract a wider boundaries fluctuations in the market. Euro, which traded at $ 1.51 in December, is now trading at $ 1.35. Given that traders use leverage, often borrowing 20 times your investment, increasing profits and losses, the movement of the euro to $ 1 may be a career trade. If investors invest $ 5 million to open a deal at $ 100 million, 5% price movement in the right direction doubles their initial investment.

"This is an opportunity to make a lot of money," - says Hans Huvshmid (Hans Hufschmid), the former head of Salomon Brothers, who now runs GlobeOp Financial Services SA, a hedge fund in London and New York.

It is impossible to calculate exactly the effects of bear bets made by the elite traders, but they were added to the influx of offers for sale of foreign currency, and thus pressed the European Union in order to stop the Greek debt crisis.

There is nothing reprehensible in the fact that hedge funds do the same kind of transactions, if regulators do not deem it a conspiracy. Regulators do not think that all transactions are necessarily such a character.

While small meetings, hedge funds can discuss similar transactions that may affect each other, as do those who have been criticized by some investors and banks in 2008. Once, large managers of hedge funds such as Greenlight Capital Inc., Whose president is David Einhorn (David Einhorn), also attended this month at a dinner and convinced that the fate of Lehman Brothers Holdings and other companies was vague, put more extent against these securities, thereby accelerating their collapse.

David Einhorn, president of Greenlight Capital

Manager SAC, Souen Aaron (Aaron Cowen), hath a group of bearish bets, said he had seen all the possible outcomes related to the Greek crisis, in a negative light for the euro, as handed people familiar with the matter. SAC's position relative to the euro is still not clear.

George Soros, head of hedge fund, under the management of the $ 27 billion, has publicly warned last week that if the EU fails to remedy the financial situation of the euro could collapse. " A spokesman Soros Fund Management, he refused to comment on his words for this article.

Ministry of Finance of Greece refused to comment. A spokesman for the European Commission said he could not comment on rumors in the market, adding that the EU executive body will seek to develop rules to tighten regulation and risk.

Some traders suggest that the euro is fully depreciate in the same way as the British pound in 1992 against the backdrop of major bear bets made by Soros. In this famous transaction, which led to a profit of $ 1 billion, all action-oriented Soros, which pushed the cost of a pound so low that Britain was forced to withdraw from the European Exchange Rate Mechanism, as a result, the pound has fallen even more sharply. Euro - this is a very large market, which operates at least $ 1.2 trillion daily trading volume, dwarfing the daily trading volume per pound in 1992.

Again, derivatives known as credit default swaps have played an important part in the current trading system. Some of the largest hedge funds, including Paulson & Co., Administering $ 32 billion, bought these swaps, which, as traders said, serve as insurance against failure to comply with Greece's sovereign debt. Traders perceive higher credit-default swaps as the warning signs of potential default.

Since December, the value of such swaps more than doubled, causing concern among investors about the Greek default. Paulson has opened a huge bear position in Europe, people familiar with the situation, including swaps, which will be paid if Greece will refuse to pay the debt within 5 years.

As they say, at a time when Paulson closed this position and took the opposite position in the rates, he left the firm in bull positions. In his statement, Paulson declined to comment on "individual items", saying that "does not seek to manipulate the securities or destabilize the securities in any markets."

At the end of last year, hedge funds have bought swaps insuring the debts of Portugal, Italy, Greece and Spain, and began to make bearish bets on the euro-debt. More recently, hedge funds sold these swaps to banks seeking to "hedge" or protect the savings of European government bonds - traders said.

Last year, the total value of the swap, insuring the Greek credit default doubled to $ 84.8 billion, according to the Depository Trust & Clearing Corp. However, the net amount that would actually pays the seller in case of default, grew modestly over the same period, having increased by only 4% to $ 8.9 billion, according to data DTCC. This suggests that banks and others bought and sold approximately equal number of swaps to hedge their positions, traders said.

Big bets against Europe in these days lose their importance for the vast foreign exchange markets, which offer many ways to trade. Attention has focused on the euro on December 4, when the currency fell by 1.5% in response to a report on employment in the United States, which supported the dollar.

In the period between 9 - December 11, some large European and American banks marked the bearish bets on the euro, buying a one-year put option on the euro. These options entitle the holder to sell investments at a certain price at a specified date.

Soon, the euro has begun to press. Currency fell another 1.3% on December 16, when the Standard & Poor's downgraded the rating of the Greek sovereign debt. At this stage, some investors, including asset manager BlackRockInc. made bearish bets on the euro, believing that the situation could not support a sustained level at which the euro was trading earlier, and that the recovery in Europe would slow U.S. recovery - according to the views of the same people who are close to the heart of the matter.

Concern about Greece strengthened on Jan. 20, when investors began to fear that the country will not be able to refinance its huge debt, which led to the fact that the euro fell further by 1.3%.

January 22 Greece said that the planned sale of five-year bonds worth 8 billion euros in the coming days. To get ahead of the speculators, Greek advisers in the investment bank's liabilities that can be allocated to hedge funds - said a person familiar with the sale.

By January 28 the cost of new bonds decreased by 3.5%, leaving investors disappointed.

28 and 29 January analysts from Goldman Sachs Group Inc. sent a group of investors in a trip to meet with banks in Greece. The group included about a dozen different fund managers, say eyewitnesses, including the managers of the Chicago hedge-fund giant Citadel Investment Group, New York hedge fund, Eton Park Capital Management and Paulson, who sent two officers, said people who were there. Eton Park (Eton Park) had no comment.

During his meeting with Greek Deputy Finance Minister and the leaders of the National Bank of Greece, representatives of other banks and some investors have raised sharp questions about the state of the economy - according to the same people.

On the "ideological dinner" on February 8, organized Monness, Crespi, Hardt & Co., Small research and brokerage firms, three portfolio managers said on investment topics related to European debt crisis. During dinner in a private townhouse in Manhattan, during which served fried in a lemon chicken and filet mignon, manager of Soros predicted that interest rates will rise.

Donald Morgan, head of hedge fund Brigade Capital, told delegates that in his opinion, the Greek debt - these are the first chips in a domino whose fall would affect U.S. companies, municipalities, and Treasury securities. Einhorn, meanwhile, who was among the first and most vocal "bears" on Lehman, said that he is inclined to the bullish bets on gold due to inflation fears. Einhorn declined to comment on.

A week later, after supper, the most recent data, the size of the bear's rates against the euro rose to a record level of 60,000 futures contracts, which was the highest since 1999, according to Morgan Stanley. The data represent the volume of futures contracts that pay off if the euro falls to a specific level in the future.

Three days later, after dinner, another wave hit the euro, the currency dropping below $ 1.36. In a special order last week, traders from Goldman, Bank of America Corp. 'S Merrill Lynch unit, and Barclays Bank PLC have helped individual investors to place bearish bets on the euro - traders said.

Trade attracted low-cost contract, which provides the owner with a big payout if the euro fall to parity with the dollar during the year. This type of "low-risk" trade, is known so because the probability of the euro-dollar parity is low and similar contracts provide insurance against the fact that if the euro that will happen sometime during the year, the investor will receive decent compensation.

Price for the current rate is about 7% of the total amount that can be paid in case of parity. Thus, for an investor making a $ 1 million bid, the cost will be $ 70,000. This means that at present the likelihood that the parity will be achieved is 14:1. In November, the chances were 33:1, said the man, who is familiar with contract pricing.

The Wall Street Journal

The future of the dollar, what is it?

At the World Economic Forum in Daovse, held last month, Deputy Chairman of the People's Bank of China, Zhu Min openly about their fears. what will happen to the world's financial markets in 2010. "For me, the main risk factor in this year will carry speculation the dollar", - he said. "This is a very important issue. It is estimated that the volume of speculation in the dollar reaches 1500 billion, which is much bigger speculation in the yen." In particular, he is concerned about the possible way out of carry trades and as a consequence, the sharp strengthening of the dollar, which, in turn, will derail the upward trend of stock markets, to encourage the world economy from the crisis. Many investors share the pessimistic mood of the deputy. Chairman of the Chinese Central Bank. Especially now, when the U.S. currency began to recover after a long period of recession in the past year. After the bankruptcy of Lehman Brothers in 2008, the yen, which was then a favorite among speculators, has soared. The same is probably waiting for the dollar against the backdrop of falling stock and commodity markets, as well as high-yielding currencies.


Once the global asset markets began to recover from shocks and crises rise from lows reached in March last year, the dollar has become a favorite funding currency. This circumstance contributed greatly to the ultra-low interest rates in the U.S., which encouraged speculative investors to sell dollars to fund the riskier trades and buy higher-yielding assets. As a result, for the period from 1 March to early December, the dollar fell more than 17%. But now the situation has changed. The U.S. currency restores the position. and investors vemu world anxiously thinking about the possible massive withdrawal from the positions carry. Since December, the dollar, weighted by trade, grew by more than 8% by testing last week, the maximum for the last 8 months. Nevertheless, many analysts are reluctant to draw conclusions that the era of the dollar as the currency of funding coming to an end.


The first part of the restoration of the dollar, obviously, was associated with the adjustment of positions, typical for the end of the year. Then, earlier this year in the game entered by other forces, extending the training of the rising momentum. First, in January, China reacted to the new surge in bank lending rates rise on promissory notes and twofold increase in banks' reserve requirements. This triggered a wave of profit-taking in commodity markets, as well as the stock markets of developing countries, which, in turn. demanded from investors to buy the currency financing, ie, a dollar. Secondly, it opened up the problem in Greece, threatening to seriously undermine the foundations of the European Monetary Union and calling into question the existence of the euro. Of course, the single currency came under pressure, which also contributed to the strengthening of the dollar.


And, finally, an unexpected increase in the discount rate the Fed. interest rate on which the Bank provides commercial banks in emergency funding, forced markets to think about the end of the policy of monetary easing in the U.S.. In fact, focus on assessing the volume of carry - a very thankless task. Even China's concerns about the extent of dollar speculation carry and, as a consequence, a sharp strengthening of the dollar, should be viewed through the prism of their own monetary policy. China's trading partners try to force him to abandon the dollar and the anchor letting the yuan rise, it is no surprise that the Celestial Empire is afraid of the exodus from carry.


According to Tim Lee of PI Economics. from 2004 to 2007, speculation against the yen rose to 1000 billion dollars, so it is difficult to imagine how China has taken the sum of 1500 billion dollars on speculation the U.S. currency, if the 4 th quarter did not exceed 500-750 billion Mark Chandler from Brown Brothers Harriman said that all estimates of the dollar speculation should be taken with skepticism. He notes a number of indications that some investors have already closed their positions.


First, data on the positioning provided by the Chicago Mercantile Exchange, indicate that that speculators reduced their positions against the dollar, or even opened a long position in that currency. Now, a record number of sales recorded for the euro. Second, emerging market equity funds recorded the first outflow of funds over the past three months amid fears about tightening monetary policy in China, India and Brazil. However, according to Chandler, the long-term market trends such as absent. Investors did not rush to cover their speculation focused on longer time intervals. The growth of the dollar is likely related to events occurring outside the United States. "Speculators in the futures market are selling the euro, which provokes the reduction of short positions. While the medium-and long-term investors do not hasten the closure of its structural position," - he said. Strengthening of the dollar - is a consequence of bad news from the outside, rather than good news in the U.S..


Indeed, analysts see no significant changes of short-term positioning outside the sector. Moreover, they said, the dollar will likely not be able to so quickly lose their status as foreign currency funding, even though the Fed's decision to raise the discount rate. The U.S. central bank has done everything possible to emphasize that this step is not the beginning of non-incentive policies. According to management's key interest rate will remain low for a long period of time. John Norman of JPMorgan said that the rise of the dollar over the past six weeks was associated with sovereign risk in Europe and unexpected actions by other central banks. Thus, the Reserve Bank of Australia raised rates, as expected, and the Bank of England announced its intention to extend the program of quantitative easing. Changing political trends outside the United States helped the dollar strengthen. But these events did not blend with the view that the U.S. will lead the process of phasing out incentive policies that will lead to a transformation of the U.S. currency funding in exchange for investment and thus result in long-term growth.

Financial Times

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Orders for durable goods in the U.S. increased by 3%

The volume of orders for durable goods from U.S. producers rose in January by 3% to $ 175.7 billion, thanks to growth in demand for civilian aircraft. The January growth rate was a record in July last year. Economists had expected orders to increase the reporting period to 1.5%.

Largest increase in January fell to the lot of volatile civil aerospace sector, the volume of orders for products which increased immediately to 126%.

Orders for durable goods excluding orders for vehicles, increased by 15,6%, fell in January to 0,6% to $ 131 billion

Number of applications for unemployment benefits in the United States rose to 496 thousand

Number of primary applications for unemployment insurance in the United States has risen for the past week to 22 thousand to 496 thousand

Economists expect declining per week to 20 February to 460 thousand

The average value of the index for the period in the past four weeks rose by 6 tons to 473.75 thousand

The number of Americans continuing to receive unemployment benefits rose for the week to Feb. 13 at 6 tons to 4.62 million

For the dollar becomes more interesting to observe

Financial Analyst FxPro Alexander Kuptsikevich: Despite the rather weak start trading in America, as so often happens, their investors have found the strength not to succumb to negative sentiment from weak statistics. As a result, share platforms States rose by the end of the day that, for we know the correlation, causing a surge of optimism on commodity platforms, respectively, reducing the dollar.

Currently, oil prices are near $ 78 a barrel, while remaining in the corridor of 70-82 dollars for five months. But then so high quotes were based acceleration in global growth, in particular the main consumers of this material. At the moment we have forecast that growth will be noticeably lower than in the first quarter and possibly in the second due to low consumer activity and the end of the replenishment of stocks that moved up GDP in the second half of 2009. Accordingly, oil is more likely to fall in price to 70, than to grow above 82. In this case, the ruble may be under pressure, losing weight in the basket. In February it fell to the ruble by 83 kopecks to 34.84, naturally expect a commensurate increase in the area 35,50-35,70.

In the euro could also mention some support around 1.3460 to the dollar, below which the euro has refused to fall yesterday, and that eventually led to some consolidation courses. Euro bounced from 40.50, having risen by more than 20 cents, the dollar is virtually unchanged, but behind it is interesting to observe, while the line of the uptrend in the dollar / ruble and the psychological mark of 30 (where the couple is now) intersected. If the mood will change for a dollar, then we can see a noticeable fall in the rate next week.

With regard to the prospects for March, it seems, most of the euro has already dropped out, impending correction can send a couple of euro / ruble higher 41,50-41,80. An important factor - the mood of the Central Bank. It is difficult to bet against the central bank, and he now seeks to weaken the ruble exchange rate, lowering rates and buying currencies from the market. If the situation with the influx of capital into the background of growing cost of oil will unfold, then all together it will strengthen the weakening of Russia's currency. At the end of March, the dollar / ruble may rise to 30,40-30,50. Although not completely exclude the penetration of the uptrend and falls in the area 29,50-29,30.

The precise value of UK GDP for the 4 quarter exceeded forecasts

According to updated figures from the National Statistical Office, UK GDP rose by 0.3% in the fourth quarter of 2009. Level indicator has exceeded the expectations of market participants. Has been predicted that the value of GDP will be revised from 0,1% to 0,2%.

The index of activity in the UK services sector rose by 0,5% in the fourth quarter, compared with a decrease of 0,3% in the previous quarter. Analysts expected an increase rate of 0,3%.

The volume of production increased by 0,4% during the reporting period against the decrease by 1,0% in the previous quarter

Annual inflation in the euro zone 1.0% in January, at the level of forecasts

In the final data of the EU statistical agency Eurostat, the annual consumer price index for the euro area amounted to 1,0% in January of this year compared to 0,9% a month earlier. The value of the meet analysts' forecasts.

In monthly terms, the consumer price index fell in January to 0.8% after increasing by 0,3% in the previous month.

Annual consumer price index excluding prices for food, tobacco, alcohol and fuel (main index) was 0.9% during the period when the previous value of 1.1%. Economists predicted the main index increased to 1,2%.

Mizuho: dollar / yen will continue to decline

As the currency analyst Mizuho, pair dollar / yen yesterday found at least at the level of 88.80, nearly reaching the February minimum of 88.55. The bank drew attention to the fact that the couple is not resold, and the momentum has not yet turned on the bear territory. Thus, the bank believes that during today's dollar / yen will consolidate above the level of 88.50. However, according to the Bank's strategy for next week couple will continue to decline and, eventually, will fall to a mark of 87.00. Within this goal the bank preferred to sell a couple of the best exchange rate, reinforcing the position at 90.00, with a stop above 90.55. At the moment pair dollar / yen is at around 89.25.

BNP Paribas expects further growth in the euro / pound

As the currency analysts BNP Paribas, the euro / pound overcame resistance in the 0.8840/60 area, as well as the resistance of the downtrend line from the October peak. According to the bank's strategy, the dynamics of couples indicates that an important foundation has been formed. Thus, the Bank expects continued growth in the euro / pound to the target levels of 0.9055 and 0.9155. Currently, the euro / pound is at 0.8922, slightly below the 6-week high 0.8933.

Deutsche Bank predicts lower euro / dollar in the next months

According to currency analysts Deutsche Bank, in the following months, the European currency may drop to 6% against the U.S. dollar against the backdrop of speculation that the Fed will raise interest rates before the European Central Bank. As noted in the bank, analysis of changes in euro / dollar indicates that in the next couple months, probably will be traded at the lower range of $ 1.2750 - $ 1.3000 and possibly even fall to the bottom border. The cause of the next wave of decline of the euro / dollar is likely to be record prices in the market beginning of the cycle of rate hikes the Fed, rather than the further revaluation of the fiscal risks within the euro area. Currently, the euro / dollar was at $ 1.3588.

The volume of euro-zone industrial orders unexpectedly rose for December

Index of industrial orders in the area of the single European currency rose 0,8% in December in monthly terms, said the EU statistical agency Eurostat. Value index has outperformed expectations of market participants, as analysts predicted the decline in industrial orders for 1,1%. Recall that in November, the index increased by 2,7%.

On an annual basis, industrial orders in the euro zone increased by 9,5% in December against the forecast of 7,6%. In November, the annual index was -0.6%.

Unemployment in Germany, 8.2% for February, at the level of forecasts

According to the Federal Bureau of Statistics of Germany, seasonally adjusted number of unemployed increased by 7 000 in February. At the same time, economists predicted increase in the rate of 18 000. In January, the number of unemployed in Germany rose to 5 000.

Unemployment, taking into account seasonal factors was 8.2% in February compared with 8.1% a month earlier. Index value corresponds to analysts.

Sales of new homes in the U.S. fell to a record low

Sales in the primary housing market in the U.S. fell in January to 11,2% to 309 thousand units. As a result, the rate was at a record low level since the beginning of his calculation in 1963.

The third consecutive monthly fall in housing sales was a surprise to experts. They predicted sales of new homes should have been a few grades increase to 355 thousand due to the government program to provide tax relief for home buyers.

Sales of new homes in the U.S. fell by 6,1% compared to the same period in 2009, when the index was at 329 thousand

Eurozone consumer confidence index fell slightly in February, as expected

The index of consumer confidence (Euro-Zone Consumer Confidence) was -17 points in February compared with -16 points in the previous month, said the European Commission. The value of the meet analysts' forecasts.

At the same time, the index of economic confidence Eurozone (Euro-Zone Economic Confidence) decreased from 96.0 points to 95.9 points versus 96.4 points prediction.
Indicator of confidence in the business environment (Business Climate Indicator) was -0.98 points in February compared with the forecast value of -1.05 points and the January level of -1.12 points.

Moody's Warns of Greece Cut If Fiscal Plan Missed

The debt rating of Greece can be lowered within a few months, if the country fails to follow its plan to reduce the largest in the EU budget deficit - have a Moody's Investors Service.

"If the deviation is significant, we can actually somewhat lower rating," - said in an interview in Tokyo today Kallet Pierre (Pierre Cailleteau), managing director for sovereign risk at Moody. Standard & Poor's said yesterday that it might lower the rating by the end of March, as the weak economy and the political opposition threatened the country's ability to reduce the budget deficit.

The euro fell against the yen to its lowest level in a year, Asian markets declined and the cost of protection against default of Greek government bonds soared on concern that the country may need to help the EU in debt payments. The unions staged a strike yesterday in order to counter the actions of Prime Minister George Papandreou (George Papandreou) to reduce costs.

"If in a few months it appears that there are significant deviations from the plan, then it is likely that we will make the corresponding changes in the rating", - said Kallet. At the same time, Moody's rating could stabilize at the level of A2, if Greece will be tough to follow its austerity measures.

"We must allow the government to implement their plans," - said Kallet. "You can not expect from the government" recycling "of public finances for a few days."

He said that the financial position of Greece has not changed since December, when Moody lowered the debt rating to the current level. Rating Moody for Greece - the sixth highest in the list, two points higher than BBB +, to assess the Standard & Poor's and Fitch Ratings.

It is difficult to hold
If Moody's credit rating will lower to the same level as the other major rating agencies, it can aggravate the financial distress of Greece at the end of this year, when the ECB will have to revert to the old rules of which were weakened during the period of global economic recession. The Greek government bonds are no longer able to serve as collateral for the ECB, making loans for the country even more difficult.

Doubts about the ability of Greece to finance the deficits and debts have appeared in the financial markets at a time when the government revealed details about a deficit budget was last year's 12.7%, which is more than 4 times higher than the limit set for countries within the eurozone, as Greek deficit was the largest in terms of the 27 EU countries.

The euro fell 1.1% to 120.73 yen at 15:04 in Tokyo after earlier falling to 120.46, which was the lowest level since February 24, 2009. Currencies 16 countries had slid by 0.5% against the dollar to a mark of $ 1.3467.

Default swaps
Credit default swaps to protect debt of Greece, traded at 10 basis points higher at around 375 basis points, according to Royal Bank of Scotland Group Plc. The contracts rose 19 basis points this week, according to the prices CMA DataVision in New York.

Investors who work with risk premia, are in demand Greek 10-year bonds instead of German, as the first most significantly grown for two weeks. The difference in yields between 10-year Greek and German bonds widened today to 3.39 percentage points from 3.32 yesterday, according to data compiled by Bloomberg. The gap reached 3.96 percentage points on Jan. 28 and became the most significant since October 1998.

"We believe that further declines in Greece on one or two steps perhaps within a month" - said S & P analysts led by Mark Myrsnikom (Marko Mrsnik) in London, published yesterday in a statement.

EU governments are looking for assurances that Papandreou would reduce costs before they will be formulated, what kind of assistance they can offer. EU officials and the ECB have visited Athens this week to make sure that the reduction is really going on.

Additional measures
Under the provisions adopted in this month euro-zone finance ministers, the Greek government will be forced to take additional measures to reduce the hole in the budget if the European commission next month is not satisfied with the current course. These measures may include a higher VAT, luxury tax, higher taxes on energy use and reduce costs - they said.

Kallet also said after the interview that the AAA country "losing height". U.S. deficit reduces national security buffer against potential shocks - he said.

Rating agency Moody stated that the AAA rating of U.S. bonds will be under pressure in the future unless additional measures are taken to reduce the deficit. According to the forecast of the government, the country faces an unprecedented budget deficit of $ 1.6 trillion for the year ending September 30.

Bloomberg

Barclays Capital predicts further strengthening of the yen

As the currency analysts Barclays Capital, the market was still dominated by trend away from risk, and against this background the main benefitsirom is the Japanese currency. Couple pound / yen has broken the lower limit of the range, and sank to a 10-month low at 136.25, while the euro / yen has established at least one-year mark of 120.24. Nevertheless, the bank's strategists predict the further strengthening of the yen in the next month with the prospect of falling pound / yen to 133.65, and possibly to a level of 128.35, the euro / yen - the target levels of 118.00 and 115.00. At the moment couple pound / yen traded at 136.66, the euro / yen is at elevation 120.51.

Credit Suisse: Swiss central bank will continue to track the euro / franc

According to currency analysts Credit Suisse, the Swiss National Bank will continue to be vigilant due to the fact that long-term uptrend of the national currency remains in force. As noted in the bank, the strengthening of the Swiss franc is similar tightening of monetary policy. The bank believes that the central bank of Switzerland, most likely, will continue to seek to intervene in currency markets if necessary, per se. In addition, the Bank believes that further reduction in euro / franc may postpone raising rates in the near future. Bank strategy notes that just the euro / franc in terms of purchasing power parity 1.40. Currently, the euro / franc traded at 1.4633.

RBC Capital Market: U.S. / Canada demonstrates a positive attitude

Pair dollar / Canada today demonstrates a positive attitude. As the currency analyst RBC Capital Market, trends away from risk provided significant support to the U.S. currency, as a consequence, the dollar / Canada reached sessional maximum at 1.0680, breaking the mark 1.0645. The next resistance strategy of the bank put 1.0732. At the moment pair dollar / Canada is at the level of 1.0654.

LiteForex continues to expand the set of tools

In the author's toolbox «Forextools» a new indicator ft.LotRuler.
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Since 2010 Sergei Kravchuk decided to focus on tools for intraday trading, and the first step in this direction was the development of the indicator IntraDay_Eye, the dignity of a group of companies whose customers LiteForex have been able to fully appreciate. Now available to the trader has another indicator - ft.LotRuler.

This indicator is significantly simplifies the calculation of potential losses and profits, but also allows to visually identify and select the appropriate size of the lot. According to Sergey Kravchuk, "such a strong tool saves time and protects the nerves trader in stressful conditions within the day (Intraday)». Use of this indicator also facilitates compliance with the «Money management» (or - the rules of money management), and is a necessary condition for successful trade in market Forex.
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In the nearest plans of the group of companies LiteForex - constant updating and improvement of the proposed toolkit «Forextools».

For Greece, a "fiscal devaluation" is a better solution than a "temporary holiday" from the Eurozone

Martin Feldstein (Martin Feldstein) last week argued that Greece should "take a temporary leave from the right and duty to return with a more competitive exchange rate." In this article, a former economy minister of Argentina and one of its authors claimed that this idea will not work. The best solution would be to adjust the Greek tax system.

Martin Feldstein argues that in order to reduce the costs of financial restructuring, Greece should ask its European partners on a "temporary leave from the right and obligation to go back to a more competitive exchange rate" (Feldstein, 2010). In particular, he proposes to re-enter the Greek drachma, at par with the euro, it depreciated by 23%, and then return to the euro a few years later with a more competitive exchange rate is 1.3 drachmas per euro. His proposal does not include the denomination of financial contracts of the euro in drachmas (this will mean the same thing that a default on these contracts), he proposes to temporarily change the unit of measure used for pricing and payroll in the economy.

The aim of these measures is to reduce labor costs to increase exports and reduce imports (assuming that the carryover effect from devaluation to domestic prices close to zero), and thus stimulate the economy, to compensate for the reduction because of the inevitable financial adjustments needed to improve the creditworthiness of Greece (this, in turn, implies that the consequences of relying on the cost impact of the devaluation outweigh all other deterrent effect).

Eurozone as the Bretton Woods?
In fact, Marty offers to re-establish within the eurozone is the same mechanism that had existed under the Bretton Woods system that would allow countries facing severe internal and fiscal imbalances, to adjust its fixed exchange rates, after consultation with the IMF and other countries who took participation in this agreement.

In this sense, this proposal has a certain logic, but, unfortunately, it gives a course on the creditworthiness of other eurozone countries, which poses a political challenge for its adoption.

We, however, fully agree with Marty, until something is done to enhance competitiveness in foreign markets, unilateral measures on fiscal adjustment does not put Greek economy on its feet. In Greece now operates monetary agreement similar to what happened in Argentina, it prevented the country's economy to adjust more smoothly in 2001 when the country faces a crisis of confidence and scant international support, eventually, the government was forced to implement a tough program of fiscal adjustment . Social tensions caused by this and other measures (one of them was the temporary capital controls) led to the resignation of the government, the administration chose a new error rate policies, for which the country is paying to this day. One of the erroneous action has forced transfer to the peso financial contracts denominated in U.S. dollars, thus (as correctly believes Marty) Greece ought not to do it.

Will improve the competitiveness of the devaluation?
Point of contact, in which we allow ourselves not to agree with Marty - is the idea that devaluation needed to restore competitiveness. In fact, this effect could be reached by other means, which, at least in the case of today's Greece, are less disruptive, for example, by changing the tax structure, without prejudice to the collection of taxes.

In our opinion, one of the reasons for the high cost of labor in Greece is a tax on social security. It is 44% of the nominal wage, 28% of which is paid by the employer and 16% of the employee. Taken together, taxes for social security collected € 33 billion, or slightly less than 14% of GDP. Unlike the VAT, which has collected less than € 32 billion, and whose application is much broader. And all this despite the fact that the evasion of tax on wages (especially self-employed) in Greece sadly common that it is not surprising, given the high level of this tax.

Of course, there is a reason why the VAT collected less than the social deductions, despite the more widespread use and relatively low level of tax evasion (usually much harder to evade payment of VAT than from payroll tax), in addition, VAT rate is relatively lower. With reference to the fact that in Greece there is not one, but several VAT rates, which vary by product and region. Although the overall rate is 19%, on those goods which are basic necessities such as food and medicines, VAT is imposed at a rate of 9%, for books and newspapers - 4,5%. In addition, some Greek islands are subject to lower VAT than the rest of the country. Introducing economic distortions at the microeconomic level, we see that the non-uniform tax rate reduces the tax collection for a given level of average tax rate, and encourages tax arbitrage. By the most conservative estimates suggest, if the Greek government to adopt a uniform tax rate of 15% in all sectors, it will collect the same amount of money that it collects today, according to the differentiated system of rates to the maximum level of 19%.

Using a system of taxation
Given this information, in principle, be possible to reconstruct the Greek tax system so as to achieve a similar reduction of labor costs in euros, that Marty had in mind, without requiring the withdrawal of Greece from the euro zone, or damage to Revenue. This can be done as follows:
- Increasing VAT to 25%;
- Introduce an equal rate for all goods and services in the economy;
- Completely eliminating the payroll tax, or allowing firms to completely write off the cost of VAT returns (of the two options we prefer the latter because it ensures the continuation of the welfare system, while rewarding companies that met their obligation to pay payroll tax ).

The table below shows how we came to this conclusion. The increase in VAT to 25% and the introduction of equal rates would increase the charges VAT on € 21 billion (from € 31.5 billion to € 52.5 billion). This is the same amount of money that will be lost because of the permit firms to defer taxes on wages (ie, 28% of W / n, which the employer deducts social security), thereby compensating for the VAT. Although it will be almost neutral in respect of tax collection, but it will affect the economy. According to our assumption, the total labor costs (the sum of nominal wages and tax deductions) should be reduced to € 96 billion to € 75 billion. The difference in the amount of € 21 billion as a percentage similar to that meant Marty. However, in the absence of transitional or deterrent effects of the devaluation, the impact on competitiveness should be higher. Naturally, some firms will benefit more than others. But if someone wanted to encourage evading taxes, in this case nothing happens.

In conclusion, this measure, along with several others, including a 13% decline in nominal wages in the public sector and accurate debt restructuring carried out by domestic lenders, have been successfully implemented in Argentina in 2001.

Yet this was not enough to prevent a monetary and debt crisis, which occurred at the end of the year after it was promised financial aid in exchange for the implementation of these measures, the IMF suddenly decided to pull the plug on Argentina, announced in November 2001 that would not allocate funds, which promised, which caused a massive outflow of bank deposits and sovereign bonds, accelerating the development of the crisis. We hope that Germany, France and other countries in the eurozone will not allow the same mistake with Greece, which allowed the IMF to Argentina.

VOX EU

Commerzbank: Euro / dollar remains under pressure

As the currency analysts Commerzbank, despite the partial restoration of the euro / dollar, after yesterday's decline, which was stopped in the area of 1.3500, the pair remains under pressure. The bank's strategy drew attention to the fact that a break above the resistance line has not received confirmation, and is now threatened area of support is 1.3445/05, where the minimum and the recent mid-term corrective Fibonacci level. Analysts say the bank, the euro / dollar consolidated just before resumption of decline. As part of the initial upward movement resistance strategy of the bank put the level of 1.3713, where the 20-day moving average, in the case of a breakthrough which will make a significant obstacle region Fibonacci resistance 1.3845/75. Currently, the euro / dollar was at around 1.3544.

Ben Bernanke's comments caused the dollar to fall

Ben Bernanke's comments were reflected in developments in the Forex market. The euro / dollar is actively attacking figure 1.3600, while the dollar / yen tested the lows of 89.75/80. Market participants in the heads of the Fed statement, the U.S. has provided his words about the fact that the U.S. economy to continue the recovery needs of low interest rates. This significantly changed the presentation of the players in the prospects for change in monetary policy the Fed. Now, the immediate goal in a pair euro / dollar is a mark of 1.3640.

Indicator of business conditions in Germany Ifo fell in February predicted

Indicator of business conditions in Germany, produced by the German Ifo Institute for Economic and reflecting the perspectives of development of German and European economies, amounted to 95.2 points in February compared to 95,8 points last month. However analysts predicted that figure will increase to 96.2 points.

Indicator assessment of current conditions Ifo fell in February from 91.2 points to 89.8 points in the forecast increase to 91.9 points.

At the same time, the Ifo indicator of economic expectations rose in February from 100.6 points to 100.9 points, exceeding the forecast of 100.5 points.

The euro will face bigger tests than Greece

Otmar Issing (Otmar Issing), one of the fathers of the euro, correctly formulated the principle that established the single currency. As he wrote in the FT last week, the euro was intended for the monetary union, not political. States parties have established a common central bank, but did not want to give a general regulator of the right to levy taxes. This principle was enshrined in the Maastricht Treaty and since then, literally interpreted the German Constitutional Court. The euro was unique and unusual design, the viability of which is now checked.

The design is clearly spoiled. Full-fledged currency requires the central bank and treasury. Treasury is not necessarily used for taxation of citizens in everyday life, but this function must be used in times of crisis. When the financial system is in danger or collapsing, the central bank can provide liquidity, but the Treasury can deal with solvency. This well-known fact, which must be known to all involved in the creation of the euro. Issing admits that he was among those who believed that "the beginning of monetary union without a political union puts the cart before the horse.

The EU has started, just putting the cart before the horse: establishing limited, but politically achievable goals and deadlines, knowing that they are inadequate and demanding further steps in that direction. However, for various reasons, the process of gradually ceased. The EU is now largely frozen in its current form.

The same applies to the euro. The collapse of 2008 showed an error in the creation, when members of the Union had to rescue their banking system itself. The debt crisis of Greece brought the case to the grand finale. If the participating countries will not be able to take the next step, the euro could collapse.

The original design of the euro assumed that the participants will abide by restrictions imposed in Maastrihe. However, the previous government of Greece egregiously violate these restrictions. The government of George Papandreou (George Papandreou), which was chosen last October in order to restore order and opened the data that the budget deficit reached 12.7% in 2009, which shocked and European authorities, and markets.

European authorities have approved a plan that would reduce the deficit gradually, first to 4%, but the markets are not reassured. Premiums on risks to the Greek government bonds continue to exceed 3%, thus rendering most of Greece, the benefits of joining the eurozone. If this continues further, there is a real danger that Greece will not be able in principle to emerge from its predicament. Further budget cuts could lead to a decrease in economic activity, reduce tax revenues and the deterioration of a debt-to-GDP. Given these threats and the absence of outside assistance, risk premiums will not return to their previous levels.

The situation is exacerbated by the market for credit default swaps, which brings benefits to those who bet on failure. When buying credit-default swaps, the risk will automatically fall if they are wrong. This situation is the opposite in case of sale where the error is automatically increases the risk. Speculation credit default swaps could significantly increase the risk premium.

Recognizing this need, at the last Ecofin meeting, EU finance ministers for the first time pledged to "guarantee the financial stability in the euro area as a whole. But so far they have not found a mechanism to do this because the current institutional arrangements do not meet even the 123 article of the Lisbon Treaty, which provided the legal basis for such action. The most effective solution would be to issue jointly and severally guaranteed Eurobond refinancing under, say, 75% of the debt that you need to pay at the time when Greece will reach its goals, leaving Athens to finance its needs as it is they need. This would significantly reduce the cost of financing, and would be equivalent to a conditional allocation of IMF credit tranches.

Currently, however, politically it is impossible, as opposed to Germany to be a pocket for their profligate partners. Because to be found temporary arrangements.

Papandreou Government was determined to correct past abuses, moreover, it has considerable public support. There were mass protests and resistance from the ruling old guard, but it seems the public agrees with the rate of the economy, yet we see progress in correcting fiscal abuse, and there are a lot of mistakes on which to work. Such interim relief should be enough for Greece, but not enough for Spain, Italy, Portugal and Ireland. Together they make too much of the eurozone to get help the same way. Salvation Greece still leaves in doubt the future of the euro. And even if we manage to cope with the current crisis, what to do with these? Obviously, you need the following: need a well-organized Eurobond market. The question is, will there be enough political will to make these steps.

Financial Times

RBS does not expect good results from the British pound

As the currency analysts RBS, the rhetoric of today's presentations by members of the Committee on Monetary Policy Bank of England at a meeting of the parliamentary committee as a whole, was of a moderate tone and is consistent with a report on inflation and the minutes of the meeting of the Bank of England. As noted in the bank, it is obvious that the central bank allow the probability of continuation of quantitative easing. Bank of England also sees the first signs of recovery, however, drew attention to the fact that it will be slow and protracted, with downside risks persist. In addition, the central bank expressed concern over the export sector and high inflation, but the governor of the Bank of England Mervyn King said that, most likely in the 2 nd half of the year, inflation to fall below the target level. In general, consider a currency strategist with the Bank, in the face of rising risks to get "hung" Parliament and the continuing concern about the fiscal policy of the British pound in anticipation of elections in Britain will not show too good results, especially against the currencies of countries with good financial condition, including which the Australian and Canadian dollars, as well as Norwegian and Swedish krona.

Barclays Capital: the growth prospects of the euro / dollar still persist

According to currency analysts Barclays Capital, break above the resistance trendline at 1.3660 in the pair euro / dollar points to the possibility of testing the level of 1.3765, where the 21-day moving average, in the case of a breakthrough which steam can rise to more violent resistance 1.3840. Nevertheless, today's rising dynamics of the euro / dollar ended at 1.3693, after which the couple sat down to a sessional minimum at around 1.3552. As noted in the bank, breakthrough euro / dollar below 1.3520 would be a refutation of the above bottom-up scenario. Currently, the euro / dollar traded at 1.3583.

Barclays Capital looks forward to continuing the uptrend of the Australian currency

As the currency analysts Barclays Capital, break above the 0.9040 in the AUD / USD has become the basis for forecasting changes in the pair with a neutral to bullish. Bank strategists believe that the rising trend AUD / USD from the recent low of 0.8575 will be continued, with the consolidation of the pair above the 0.8880 in the bank is considered as confirmation of the rising mood of couples. For the purposes of bank analysts put a mark 0.9130 and 0.9230. At the moment pair AUD / USD traded at 0.9000.

Scotia Capital expects to further reduce the dollar / Canada

As the currency analysts Scotia Capital, the Canadian dollar keeps relatively well in the overall strengthening of U.S. currency and some weakening in commodity markets. Despite the decline in currencies of Canada earlier this week, the Friday drop in the dollar / Canada has strengthened the two-week downtrend couples. As the resistance in the bank raise the level of 1.0470. However, as the dollar / Canada is kept below 1.05, reduction remains the preferred scenario. At the moment pair dollar / Canada is at around 1.0430.

CitiFX recommends selling the euro / pound

Currency strategists CitiFX announced the opening short position on a pair euro / pound at stg0.8796 with a stop at stg0.8860 and descending to stg0.8400.

Britain at risk of worse deficit crisis than Greece

The British Government risk facing the worst crisis of the budget deficit, than Greece, which raises serious concerns about the economic stability of the country.

Economists argue that the scale of the budget deficit this year could exceed £ 180 billion

Sterling fell to the unexpected news, after official data showed that the Government has taken £ 4.3 billion last month.

For the first time since 1993, public finances went into negative in January and this month, which is usually tax revenues to the Treasury is moving a significant plus. Economists say that the magnitude of the budget deficit this year could exceed £ 180 billion, even higher than the Chancellor's forecast of a record £ 178 billion.

This deficit (12.8% of UK GDP) could be more serious than that faced by Greece, which already faces a widespread financial crisis, and perhaps she will need help from other eurozone countries or the IMF.

Data on loans coincided with the bad news real estate market, as well as the Council of Mortgage Lenders said a fall in lending last month by 32%, beating, thus, the lowest in a decade.

Bank of England also reported a reduction in lending to enterprises, which suggests that the recession is far from complete.

Poor economic performance has become a serious blow to Chancellor Alistair Darling (Alistair Darling) month before the budget, which, he hoped, would give evidence that the economy is recovering.

The news also appeared on the background of the informal launch election campaign Gordon Brown's Labor Party, which the Prime Minister is planning to build on the basis of economic performance and policies.

Tomorrow Brown will announce the election slogans of the Labor in the general election, which is scheduled for May 6. Here they are: "Ensuring recovery", "Protection of basic services", "Support of the majority", "Protection of future jobs and industries.

Despite the growing warnings from economists and businessmen that the size of the deficit is a serious threat to the future of the British economy, the Labor Party say that government spending should not sokrtitsya until 2011/2012.

In his speech in London, the Prime Minister will insist that the Conservative plans to curb the deficit by reducing spending this year could undermine the recovery.

"Instead of helping restore, their contempt for the government's actions could create additional risks for recovery," - says Brown. "Rather than protecting ordinary families, depriving them of opportunities."

Office for National Statistics said that the government has never had to deal in January, adding that the shortage of funds, which led to borrowing £ 122 billion this year, equivalent to the duty of every Briton to £ 2,000.

The scale of the debt was much higher than in past recessions, since the economic recession resulted in a decline in tax revenues, especially from the City, as well as a sharp increase in social benefits and unemployment benefits and the disadvantaged.

Jonathan Loyns (Jonathan Loynes), of Capital Economics said that although Britain's national debt was much lower than the Greek, the deficit in Britain and the speed with which it occupies, can now be even higher.

He said: "With the budget deficit, which tends to 13% of GDP this year, which may exceed even the Greek, it is clear that a more robust plan to rebuild public finances will need immediately after the general elections in order to keep a lid on markets and rating agencies.

A number of economists and businessmen urged the government to reduce the deficit faster and more thoroughly than is done now, based on the opinions of 20 leading scientists warning last week that because of inactivity, the British government could face a devastating financial crisis.

The Conservatives warned that Britain could donate their top credit ratings, only if the next government will take decisive action.

Shadow Chief Secretary of the Treasury, Philip Hammond (Philip Hammond) said: "These horrific data showing a record deficit in January, illustrate the scale of the debt crisis of the Labor Party."

"The Prime Minister must heed the advice of leading economists and business leaders to present a credible plan to curb the deficit, and, starting this year, to put Britain back on its feet. The longer he delays, the greater the recovery and credit rating would be under threat. "

Following the statistics, the Treasury officials spent much of the morning, comforting and encouraging large investors not to panic in the City.

Nevertheless, as the interest rate, the cost of borrowing for the government rose to 4.1%, which is the highest level in 15 months.

The representative of the Treasury, said: "These findings convince us to make a preliminary forecast to publish the budget ... pre-budget report predicted a sharp drop in capital gains tax and income tax paid in this fiscal year, January is always the most important month for these income; today's data clearly show a downturn. "

James Owen (Owen James) from the Centre for Economics and Business Research said: "In light of the continuing problems in Greece, international investors are wary of economies with large deficits. Despite the fragile nature of recovery, Britain should avoid the attention of predatory eyes now to Portugal, Spain, Italy and Ireland. "

"It is important that the appropriate measures to reduce public borrowing has taken the next government, we are skeptical that the pre-election budget will contain measures that will help calm the markets. Today's data highlight the need for clear commitments on future policy. "

James Knightley (James Knightley), an economist at ING Financial Markets said: "Given the concern over public deficits in Europe at the moment, Britain could again become the focus.



Telegraph

Europe's monetary union has become an instrument of deflation torture

If the aim was to join the euro European diversity and serve as a catalyst for political union, Europe's elites would have to moderate the expression of anti-German sentiment in the Greek parliament last week.

Left recalled the damage from Nazi Germany and its allies, accused the German banks in the infamous game and speculation at the expense of the Greek people. " Centrist Democrats are not better. How Germany could muster the audacity to criticize our financial system, even when she did not pay compensation to victims of war? There are still Greeks, who mourn their lost brothers, "- said the ex-Minister Margaritis Tzimas (Margaritis Tzimas).

This is deeply offensive to a democratic Germany, which is 60 years old with dignity plays its complex role in the history of Europe. No country could do more in order to overcome his demons. She pays the bill, pay again and rarely grumble.

Meanwhile, a decade of monetary union has created a broad and permanent hole between the north and south, that all EU initiatives poisoned. German-Greek relations have never been worse.

Nobel Prize-winning economist Paul Krugman (Paul Krugman) sees no point in blaming any country in this "Evrobesporyadke. "The political elites of Europe have a responsibility," - he said. "This is a big effect on the currency, even if we disregard warnings about what specifically might happen, even Eurosceptics can not assume such a bad scenario." In fact, we have assumed the professor. But thanks anyway.

European Monetary Union is slowly strangling the member states' ups and downs, these countries are trapped in debt deflation, as the EMU operating in the same destructive manner as the Gold Standard in 1930.

Rules of the gold standard were simple: the surplus countries eased policy, scarce - tightened. So keep the balance. World War I shattered this system. U.S. was not willing to take a leading role instead of Britain.

The dollar was undervalued in 1920. America managed a significant surpluses, like China today. France pegged exchange is too low. Both countries have depleted world reserves of precious metals. And yet, no country has softened the policy: the Fed because of the fury of the Chicago Liquidators Bank of France due to the fact that they were still very fresh in the post-war consequences of hyperinflation.

Regulation fell entirely on scarce countries such as Britain. They had to introduce tighter during the recession, keeping debt deflation. Global demand has burst from the inside, until the whole system collapsed. In the end, the U.S. and France were victims of your own stubbornness, but in 1930 or 1931 it was not an obvious fact to all but Keynes.

History of the eurozone. North has a surplus, the South - the deficit. Germany's surplus was equal to 6.4% of GDP in 2008, the Netherlands - 6.5%. Deficiencies in the countries of central Europe prevyshayut14% for Greece and 10% of Iberia (Portugal, Spain, Andorra). The gap has since declined, but remained a structural phenomenon.

This intra-version of the Chinese surplus with the Western bias. Although China is, at least, doing something with his Blitzkrieg fiscal and monetary growth of 30%.

Germany rejected the budget deficit for next year, which allowed the fiscal tightening. IG Metall agreed to freeze payments, again undermining the Spanish and Italian trade unions. As the countries of central Europe can close 30% of the gap between the unit costs for labor and a reduction in release of money supply in Germany?

Brussels enforces the European version of deflationary decree Pierre Laval (Pierre Laval) 1935, a policy which encourages the French third republic to the edge. Now he ordered Greece to reduce the budget deficit by 10% of GDP for three years, or be responsible under 126.9. Spain must reduce the deficit to 8%. France next?

ECB allows inflation to develop its own course. Business lending falls 2.3%, while, as the M3 money supply continues to decline. Frankfurt said the fall in demand for loans, so it does not matter. See.

German growth dropped to zero in the fourth quarter due to the expiration of incentives. Italy once again came to the negative. Spain and not come out of recession. This recovery was L-shaped.

Dr. Krugman said that the EMU has prompted Spain to the debt bubble and left the country in "asymmetric shock" without any protection. "If Spain had its own currency, the currency would have appreciated during the housing boom, and after it - would be devalued. Since this is not and was not, Spain has to suffer because of the painful deflation and high unemployment. " He wants higher inflation deflators rescued from the euro-zone trap. Just as the IMF implicitly. But who in Europe will be able to take such a decision?

Albert Edwards (Albert Edwards) from Société Générale said that the government should use its authority in the context of the exchange rate under Article 219 in order to impose a change in policy. "Politicians must take matters into their own hands and instruct the ECB to lower Euro," - he said.

This is possible only if France believes that the risks outweigh the policy of Laval danger because of neglect by the Bundesbank traditional measures. Until that EMU will be a slow deflationary instrument of torture.

Telegraph

RBC. This week, Bernanke will be the star of the screen

According to analysts RBC, this week's star news channels will be Ben Bernanke, speaking before Congress in accordance with the Humphrey-Hawkins Act. Many expect to get answers to questions that have arisen as a result of raising the discount rate the Central Bank last week. "However, we do not believe that the Bank will change the nature of his comments, noted in the bank. In general, this event is seen as key for the euro / dollar. In early U.S. session, the pair rebounded from a minimum of 1.3585 and reached 1.3630 level. Traders point out a possible quasi-official interest in sales in this area during the European session. Break above 1.3630/35 results in the movement to 1.3655. Technical traders are watching this level, both for the restoration of order on Friday and started to sell from this point with a tight stop.

Greece - it is only the first test for the euro

Otmar Issing, one of the founding fathers of the euro, very correctly identified the principles that underpin the single currency. The euro was conceived and created as an instrument of monetary, not political. The member countries of the Union established a single central bank, but not yet submitted this general authority the right to tax its citizens. This principle is enshrined in the Maastricht Treaty, and since then actively interpreted in all ways the German constitutional court. The euro was unique and special creations, and now its viability is severely tested for strength. He has a serious and obvious flaw. Full-fledged currency requires not only the central bank, but the Treasury (Treasury Department). Such treasury can not deal with the constant tax citizens, however, to use this feature if necessary, for example, during the crisis. When the financial system is on the verge of collapse, the central bank can ensure its liquidity, but only the Treasury can solve the problem of solvency. This well-known fact, it is very unlikely that it did not know about those who conceived the euro and participated in its creation. Issing admits that he was among those who see education as a monetary union without political branches of government attempt to put the cart before the horse.

So, put the cart before the horse - was thus created the European Union. There were limited, but politically it is achievable goals and timetables, but all knew that they would not be enough, will require new steps and new steps. For several reasons, the process of gradually stopped. Development of the EU is now frozen at the current stage. The same applies to the euro. 2008 financial crisis, forcing members of the Union to save their banking systems, he opened our eyes to the defects and flaws in its design. The apotheosis was the debt crisis in Greece. If members of the European Union can not get out of their lethargy and continue the process of development, the euro is doomed. Initially, when creating a single currency, it was announced that members of the Union will comply with the restrictions set by the Maastricht Treaty. However, the previous government of Greece committed a serious violation of these restrictions. The government of George Papandreou, elected last October, with the obligation to restore order, reported that the budget deficit in 2009 amounted to 12.7% than that plunged into a deep shock not only markets, but European authorities.


European authorities contented plan for gradually reducing the deficit, with the first step of reduction of 4%. However, the market is not enough. Risk premium on the Greek government bonds are still kept in 3%, which Greece denies most of the advantages of participation in the euro area. If the situation does not change, Greece simply can not pull ourselves out of debt swamp, no matter what she did. Further budget cuts will only depress economic activity is stronger, leading to a reduction in tax revenues and the decline in the ratio of debt to GDP. Thus, the risk premium will not return to the onetime levels without outside assistance. The situation is worsening developments in the market default swaps on loans: now outweighs the camp of those who bets on a decline. When buying a CDS, the risk is automatically reduced if they do not work. This action can be considered the opposite short-selling shares, where, in case of error, the risk automatically increases. Speculation in the CDS market could trigger a further increase in risk premia.

The ministers of the euro area at its last meeting, recognized the complexity of the situation and pledged to "maintain the financial stability of the euro area as a whole. Unfortunately, they still have not found the mechanisms to implement their obligations, because the current institutional arrangements are not suitable for this purpose - although Article 123 of the Treaty of Lisbon and provides the necessary legal framework. Joint issue Eurobonds to refinance the secured, say, 75% of debt to be repaid in the event of Greece promised performance, would be the best solution. Athens remains to string up and finance the rest. Such measures would help to significantly reduce the cost of financing and, in its essence. correspond to the distribution of IMF credit tranches. But now, from a political standpoint, this is impossible, since Germany was categorically opposed to serve as a feeding trough for their hapless neighbors. Thus, no sane alternatives remains.

Papandreou Government intends to correct the mistakes of the past, it is broad public support. When at the helm were their predecessors, the country now and then roll flat waves of mass protests, but now people seem happy to take the path of hardship if it would lead him to get rid of the budget problems - and they are many. Thus, Greece would be enough temporary assistance. However, there is still Spain, Italy, Portugal and Ireland. However, too many of them to be able to do this kind of action. Salvation Greece still does not guarantee the salvation of the euro. Even if he manages to overcome the current crisis, what if you break out a new one? One thing is clear: we need a strict monitoring and control over the implementation of institutional arrangements in the case of assistance under certain conditions. It is also desirable to create a reliable and well-organized Eurobond market. The question is, can Europe build their political will in a fist for these steps.


George Soros


The Financial Times