Geithner | World Market Update

CAD Rally Continues Despite Data

March 13th, 2009

Jobs Data and Trade Balance Both Disappoint

USDCAD continues to grind lower this morning with the pair briefly trading with a 1.26 handle despite a rather sobering run of Canadian data released ahead of the North American open. Though Canada’s performance, with respect to the employment market, has been well ahead of that of the US over the past 15 months, Canadian businesses are now clearly shedding positions at a rate that could soon see Canada’s unemployment rate rival that of its southern neighbour. Read Full Article »

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Risk Aversion Dominates As Markets Tumble

February 16th, 2009

UK Inflation report takes it toll

Another rocky week for sterling saw mixed data releases and safe haven buying push it back and forth like prime ministers question time. What looked like a beacon of hope for the retail industry was then well and truly quashed by the Bank of England’s inflation report. A deep recession is upon us if we didn’t already know it but the outlook for the next year was patchy to say the least. In a rather heated debate Mervyn King outlined that their predictions are the best in the business but he sealed sterling’s fate with the inkling that they are prepared to start printing money if needs be. Sterling went in to free fall on the back of these comments. Lloyds bank also hit the headlines with record losses and a mere 30% fall in share price hit the pound. We can expect even more volatility as the CBI has signaled that we are in our worst economic slump since 1980. Manufacturing data will dominate the headlines this week as it is evident that it is demand hitting the sector and not credit woes. Tuesdays Inflation data will show another fall towards that magic 2% target but last weeks inflation report really put the Bank of England on the back foot. Mervyn king sealed its fate by saying ‘Im not pretending everything worked well, it clearly didn’t’. More aggressive rate cutting looks highly possible and this will continue to weigh heavily on the pound. Read Full Article »

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Markets Little Changed in Thin Holiday Trade

February 16th, 2009

Currencies Subdued

Currencies were little changed overnight due in large part to the President’s Day holiday in the US today. Most of the majors are close to where they finished last week and should move in a choppy, sideways manner due to illiquid conditions today. Equity markets in Asia took a beating, however, as Japan released their Q4 2008 GDP results, which came in at an eye-popping contraction of 3.3%! This is the sharpest drop in Japanese GDP since the oil crisis of 1974, and marks three times the decline of the US for the same quarter. Many companies in Japan are blaming this year’s poor results on the strength of the JPY, which is seriously hurting the export-driven nation. And though they may not say it explicitly, the central bank could be forced to intervene in currency markets in order to stem the strength of the JPY–something we have seen in the past when it has gone below the 90 level. Read Full Article »

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Risk Aversion Continues to Dominate

February 12th, 2009

US Retail Sales Offer a Glimmer of Hope

Equity investors desperate for a bit of good news on which to hang their hopes probably didn’t wake up this morning with an overly optimistic outlook for the day’s US economic data. Nonetheless, retail sales for January beat analysts’ consensus expectations by a wide margin, with a 1.0% increase against forecasts of a 0.8% contraction. This is good news, as this increase represents the first gain in US consumer spending in seven months. Retail sales excluding autos followed the lead of the headline figure with a 0.9% increase. That being said, of course, the overall figures from the past three months still paint an unmistakably dismal picture, with total spending down 24.3% over the same period from a year ago. Read Full Article »

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Mixed Bag After Yesterday’s Market Selloff

February 11th, 2009

Equities Down After Geithner Proposal

Yesterday many were looking for a new round of optimism to spread over the market, as Treasury Secretary Timothy Geithner was slated to unveil a new plan to help revive the flow of credit and help the banks regain trust in each other. However, North American stock markets slid before he took the stage and as details, or lack thereof, were released the market plummeted on concerns that the efforts will not be enough to alleviate the widespread concerns that participants have. Read Full Article »

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Geithner - World Market Update