USD Enjoys Yet Another Risk Averse Rally

March 5th, 2009

Plenty of Negative News for Financial Markets

The USD index is up more than 0.6%, and yesterday’s rally in equities appears to have been stopped dead in its tracks by growing doubt at GM that the storied automaker can remain a going concern if it cannot generate cash and stop the bleeding of red ink in very short order. Contained within the filing of its 2008 annual report to the US Securities and Exchange Commission, GM stated that there is “no assurance that the global automobile market will recover or that it will not suffer a significant downturn.” The firm has requested access to $30 billion USD in emergency funding from the federal government just to survive the coming period, and with sales of its product continuing to plummet around the globe, the situation couldn’t be more dire. GM stock is trading down more than 7% ahead of the opening bell. 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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US Employment Numbers Reflect Ailing Economy

January 12th, 2009

Sterling softer after positive week

After trading at sub 1.4500 levels throughout the Christmas period, Sterling spent most of last week printing more respectable numbers. Anything over the 1.5000 mark at the moment is seen as reasonable value, so with most of the deals done last week exceeding this level, its wasn’t a bad week at all. We have however opened this morning softer, reflecting renewed sentiment that the UK economy is headed for a prolonged slowdown. Read Full Article »

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