Forex News Fed’s Stern on the wires. Feds Beige Book to be released at 2:00 PM

•  SAYS HEALTHY GROWTH MAY RETURN SOMETIME IN 2010
•  PREDICTS U.S. ECONOMIC RECOVERY WILL BE SUBDUED BUT IS NOT FAR OFF
• RECESSION WILL LAST AT LEAST TWO MORE QUARTERS

At 2:00 PM the market will get further anecdotal news on the economy when the Fed’s Beige Book will be released.  The Beige Book is a region by region assessment of the economic activity within those regions.

Forex News US Initial and Continuing Claims due out at 8:30 AM

 The The weekly claims data for the US will be released at 8:30 AM.  The Initial Claims is expected to come in at 575K after last weeks spike to 586K.  Last weeks gain was a 26 year high.  Meanwhile the Continuing Claims are expected to rise to 4400k from 4370k.  The recent high for the release has been 4431K.  This series is also at levels not seen since 1982. 

Next week the US NFP will be released.  The early call is for another oversized decline of 475K.   

Forex Trading GBPUSD looks to test the lows from yesterday

The GBPUSD is approaching the lows from yesterday at the 1.4381 level now.  The upside was tried but when a rally failed, and the old low at 1.4466 gave way, the bottom picking traders gave up and the downside was probed.  The low so far has been 1.4391.  A break of the 1.4381 level should lead to further selling.  The GBPUSD has not reached this low since April 2002.  For a longer term perspective, the 2002 low reached 1.4041 while the 2001 low reached 1.3681. 

Forex News US Beige Book Headlines from the Fed

The US Beige Book of economic conditions:

• ECONOMY WEAKENED ACROSS ALL DISTRICTS SINCE MID-OCT.
• RETAILERS PREPARING FOR RELATIVELY SLOW HOLIDAY SALES
• NEARLY ALL REGIONS REPORT WEAK HOUSING MARKETS
• FALLING SALES, WEAKENING JOB MARKET
• PRICE PRESSURES EASING
• LENDING CONTRACTED, LOAN STANDARDS TIGHTER
• MANUFACTURING DECLINED NOTICEABLY
• TOUGHER FOR CAR BUYERS IN 5 REGIONS TO GET LOANS

Bobbys Corner- Open Market 12.3.2008

Good Morning:

Weak data from the EuroZone pushed the Euro and GBP lower.  Tomorrow the BOE will meet regarding interest rates-another cut is expected. The U.K. economic situation seems to be increasingly worsening as credit continues to be difficult to obtain by both corporations and individuals.

Traders in North America will be focusing on employment data-as Friday’s Non farm Payroll and Unemployment Rate will be announced.

This morning’s Challenger Job cuts and ADP Employment data were both disappointing.

European Equities fell-and U.S. futures are weaker this morning as disappointing earnings from Infineon (Europe’s 2^nd largest maker of semiconductors) and RIM (the makers of BlackBerry).  Asian markets were slightly higher in overnight trading.

 Oil: $ 46.74                                                     Gold; $ 767.00 

Today we have data on:

Ism Non Manufacturing data:                Exp: 42.0                     Prior: 44.4

Fed Beige Book at 2 PM

 HAVE A GREAT DAY & GOOD LUCK

Bobby’s Corner- Open Market 10.15.2008

Good Morning:

World equity markets and U.S. Futures fell as markets speculate that next years global growth will be lackluster.  Comments by some Fed officials that the U.S. is already in recession also added nervousness to the marketplace.

LIBOR rates were lower this morning as the ECB, BOE and SNB offered unlimited dollars to the financial sector is a move to open up the credit markets.

Oil dropped overnight as speculation that the U.S. rescue plan will not be enough to avoid a recession-thus lowering fuel demand in the U.S. and abroad.

 Oil; $ 75.76                                         Gold; $ 846.70 

Today we have data on:

PPI:                                               Exp: -.4%                     Prior: -.9%       Act: -.4

Retail Sales:                                   Exp: -.7%                     Prior: -.3%       Act: -1.2%

Empire Mfg:                                  Exp: -10.0                    Prior: -7.4        Act: -24

Bus Inv:                                        Exp: .5%                      Prior: 1.1%

Beige Book at 2PM

HAVE A GREAT DAY & GOOD LUCK      

Forex Week Review and Preview: Another historic week. G7/G20 review and what’s on tap for this week

Last week was once again historic in its own right.  The Dow, for the first time, moved more than 1000 points in a single day.  That is an 11% move.  A bear market is typically defined as a move from a high to low of 20%.  The current market moved 11% in one day. 

Other milestones for the week:

• The Dow dropped through 8000 for the first time in 5 years
• NYSE and NASDAQ volume reached a volume records
• The Dow fell by 18% – the worst ever
• The Nasdaq fell 15%
• The S & P fell 18%
• The UK FTSE fell by 21%
• The German Dax fell 21.6%
• The French CAC fell 22.2%
• The Nikkei fell 24.3% and
• The Hong Kong Hang Seng fell 18.7%
• The FOMC, Bank of England, ECB, Swedens Riksbank, Swiss National Bank Bank of Canada, Bank of China anounced a coordinated rate cut.  This was the first time on record such a coordinated action was taken.  The Reserve Bank of Australia cut earlier by a larger than expected 100 basis points.

The global stock markets are in a bear market that is arguably the most severe in history.  The NY Times had a telling chart that outlines the severity and the duration of US bear markets (click this link to view the interactive chart more clearly http://www.nytimes.com/interactive/2008/10/11/business/20081011_BEAR_MARKETS.html). 

According to the chart, the current US bear market has the steepest decline to date of any previous one, but is well short on duration compared to the other more serious downturns.  The question is, how serious is the downturn and will the efforts employed so far help, hurt or have little effect?

CLICK HERE TO  ENLARGE THE CHART

THE G7 AND WEEKEND RESULTS

The G7 vowed to unite but fell short of guaranteeing things like interbank deposits.  Nevertheless, they did vow to prevent "systematic" important financial institutions from failing.  They also will continue to employ all tools available to get the credit markets moving again.  They all vowed to make sure bank-deposits guarantees like the FDIC were implemented and strong so as to keep deposits in place.  Finally, they vowed to make sure troubled institutions that are deemed systematically important institutions would have access to liquidity and capital. 

In the US US Treasury Secretary Paulson said they would look to provide capital for stakes in a "broad array of financial institutions" similar to what the UK proposed.  This proposal would use part of the 700 billion rescue plan package.

There are other fiscal measures being proposed in the US including works programs for rebuilding and repairing bridges and roads, another stimulus package, and measures to extend jobless benefits. 

The UK announce bailiout details.  The European leaders are expected to present a 14 point plan that will stabilize their region. 

President Bush united the G20 over the weekend and they issued a statement pledging their united support.  The concensus seems to be that this is everyones problem that will need to tackled collectively.  There was a strong emphasis that a protectionist trade strategy would not be welcomed. 

So although there was no strong cooperative guarantee released over the weekend, there still is a unity that was reinforced collectively.    

Overall, I would rather be an optimist than a pessimist.   The measures being put in place will hopefully all contribute to an easing of the pressure on the stock markets, credit markets, and the economies around the globe. 

Realistically, however, deep recessions are unavoidable.  Financial failures will not be avoided.  People will lose jobs.  Stock markets may find support but they will have trouble rallying too much given the uncertainty that will grip the global economies. 

For the currency market, the flow should continue to favor the dollar as a safe haven from the unknowns of emerging economies, the uncertainty of the European Union in uniting effectively and efficiently, and for the simple fact the US will have a growing deficit which will require issuing more T-bills, Treasury Notes and Bonds which have become the investment instrument of choice for the time being at least.  In addition it seems the fear of inflation is less of a concern for the ECB/UK which should lead to further rate cuts.  Finally, implementing and executing the plans simply takes time and that is something the stock markets and general public around the globe are not willing to wait around for and stock market declines have tended to hurt the EURO and the pound. 

Nevertheless, the markets will continue to remain volatile, and with it comes increased uncertainty and changes in sentiment.  These times are a changing and so can the sentiments of the short term traders.    

So sit tight and lets see what this week will bring us.

KEY EVENTS AND RELEASES FOR NEXT WEEK

The week will once again be dominated by the global credit crisis situation.  The LIBOR market rates will be scrutinized.  The CP market will continue to be followed.  Comments out of central bankers will be interpreted and although there are no Central Bank Meetings, there will exist the possibility of rate cuts out of the UK, New Zealand, and the ECB if credit conditions warrant another stimulus measure.  

Sunday, October 12th

5:45 PM EDT, New Zealand Retail Sales, Estimate;+0.4% vs -0.8%.  Core retail Sales  +1.05 vs. -0.2%
Bank Holiday Japan

Monday, October 13th

4:30 AM EDT, UK PPI Input/Output for September, Estimate Input MoM -1.5% vs. -2.0% last month, YoY 19.8% vs. 26%.  Output PPI MoM -0.4% versus -0.6%, YoY 8.8% versus 9.7%.
8:30 PM EDT, Australia NAB Business Confidence, No estimate versus -7 last month.

Tuesday, October 14th

4:30 AM EDT, UK CPI for September, Estimate, MoM +0.4% versus +0.6%, YoY 5.0% versus +4.7% last month, Core CPI YoY 2.0% versus 2.0% last month
5:00 AM EDT, Eurozone ZEW Economic Sentiment Index for October, Estimate,  -57.5 versus -40.9 last month
5:00 AM EDT, Eurozone Industrial Production for August, Estimate MoM +1.2% versus -0.3%, YoY -1.6% vs -1.7%
10:00 AM EDT, US IBD/TIPP Economic Optimism, Estimate, 45.0 versus 45.8 last month

Wednesday, October 15th

4:30 AM EDT, UK Unemployment Statistics for September, Estimate, Unemployment Rate5.6% vs. 5.5%. Jobless Claim Change, +36,000 versus +32,500 last month. 
5:00 AM EDT, Eurozone CPI for September, Estimate, MoM +0.1% versus -0.1%, YoY +3.6% vs +3.6%, Core CPI YoY +1.9% versus +1.9%
8:30 AM EDT, US Retail Sales for September, Estimate, -0.7% versus -0.3% last month, Core Retail Sales (less autos) -0.2% versus -0.7% last month.
8:30 AM EDT, US PPI for September, MoM -0.5% versus -0.9% last month, YoY 8.7% vs. +9.6%, YoY Ex Food and Energy, +3.8% vs. +3.6%. 
1:15 PM EDT, FOMC Bernanke to speak
2:00 PM EDT, US Beige Book will be released
6:00 PM EDT, New Zealand Manufacturing Index for September.  Last month 45.7

Thursday, October 16th

3:15 AM EDT, Swiss Retail Sales for August, Estimate YoY +0.8% versus +6.2% last month
8:30 AM EDT, US CPI for September.  Estimate: MoM +0.1% vs -0.1% last month. Ex food and energy +0.2% versus +0.2%, YoY 5.0% vs 5.4% last month, Ex food and energy 2.5% versus 2.5%
9:15 AM EDT, US Industrial Production and Capacity Utilization for September, Estimate Industrial Production, -0.8% versus -1.1%, Capacity Utilization, 77.9 versus 78.7.
10:00 AM EDT, US Philadelphia Fed index for October, Estimate -10.0 versus 3.8 last month
7:50 PM EDT, Japan tertiary Industry Activity Index, Estimate, -0.8% versus 1.2% last month

Friday, October 17th

2:35 AM EDT, BOJ Governor Shirkawa Speaks
5:00 AM EDT, Eurozone Trade Balance for August, -5.4 billion EUROS versus -6.4 billion
8:30 AM EDT, US Housing Starts and Building Permits for September, Estimate Housing Starts 870,000 versus 895,000 last month, Building Permits, 840,000, versus 857,000
9:55 AM EDT, Univ. of Michigan Consumer Sentiment for October (preliminary), 65.0 vs. 70.3 last month.

Forex News US Beige Book reports on the US economy. Somewhat soft in the economic assessment

• MORTGAGE LOAN DEMAND WEAKENING
• DISTRICTS SEE STEADY DEMAND FOR BUSINESS LOANS
• SOME DISTRICTS SEE SLOWER EXPORT DEMAND
• SOME DISTRICTS REPORT THAT CONSUMERS CONCENTRATING ON STAPLES
• MODERATE WAGE PRESSURES AS HIRING SLOWS
• RESIDENTIAL PROPERTY MARKETS SOFT
• ALMOST ALL DISTRICTS SEE PRICE PRESSURE
• SLOW CONSUMER SPENDING, MANUFACTURING DROP
• ECONOMIC ACTIVITY HAS BEEN SLOW

Analysis: Overall a weakish report which should pressure the dollar a bit.

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