Forex News | Currency News by Forexlive

We just found out. From the “old” highs around 1548, we rocketed to nearly $1560 but none of the other markets seemed to give a hoot.

Let the weekend begin…

After days of brutal crackdown in Syria, the US has placed sanctions on Syria’s intelligence agency and two relatives of the Syrian president, but not on President Assad himself.

Wouldn’t want to do anything rash, now would we?

The Syrian situation is seen as a supportive factor for the CHF, along with dwindling concerns over franc strength from the SNB…Throw in just a smidge of dollar weakness, and you have a prescription for record lows in USD/CHF…

Another updraft for gold. We’ve surpassed $1550 and we’re chugging toward $1555. Looks like some top-pickers are scrambling to cover shorts.

Silver trails far behind, trading in the $48.60s after repeated stalling just shy of the $50 level over the last week.

EUR/USD is edging higher but a critical report from the EU on the state of the European banking sector is  undermining EUR strength, to an extent.

By Steven K. Beckner

WASHINGTON (MNI) – Federal Reserve Chairman Ben Bernanke Friday
reemphasized his concern about high unemployment and home foreclosures,
while making no mention of inflation, in a speech on “community
development.”

Two days after holding a press conference following a meeting of
the Fed’s Federal Open Market Committee meeting, Bernanke did not talk
about monetary policy per se, but the thrust of his remarks reinforced
his Wednesday message that the Fed needs to keep monetary policy “highly
accommodative” for the indefinite future.

Bernanke had not been expected to say much about the economy or
policy in a speech to the Fed’s Community Affairs Research Conference
across the Potomac River from Fed headquarters in Arlington, Virginia.
But he took the opportunity to talk again about his leading economic
worries, relating them to the problems of lower income people and
communities.

“The broader economy is in a moderate recovery, and we have
recently seen some welcome, if gradual, improvement in the labor
market,” he said in remarks to the conference. “But our economy is far
from where we would like it to be, and many people and neighborhoods are
in danger of being left behind.”

Earlier, in a similar vein, Bernanke said “the economy is
recovering at a moderate pace” and noted that “the labor market has been
gradually improving and the unemployment rate has declined somewhat.”

“But unemployment remains quite high, particularly among
minorities, the young, and those with less education,” he added. “What’s
more, long-term unemployment remains at historically high levels. Nearly
half of the unemployed have been out of work for six months or more.”

What’s more, Bernanke observed that “the housing market is also
holding back the recovery.”

“The foreclosure rate remains very high, and many homeowners who
have avoided foreclosure find themselves ‘under water,’ meaning their
mortgage debt exceeds the value of their homes,” he said.

“Obviously, the problems in the labor market and the housing market
are not unrelated,” he continued. “In particular, lost income from
unemployment is causing many families to fall behind on their mortgage
payments.”

Conspicuously absent from Bernanke’s text was any mention of rising
gasoline, food and other prices, even though those presumably affect
lower income households more than most.

On Wednesday, Bernanke echoed the FOMC policy statement in
acknowledging that inflation had “picked up” and needs to be monitored,
but was likely “transitory” in nature.

The Fed chief told reporters then that the Fed will tighten
monetary policy “at the appropriate time,” but left the impression that
that time is some ways off. He defined the FOMC’s “extended period” of
“exceptionally low” short-term interest rates as encompassing at least
two more FOMC meetings.

And he said “the substantial ongoing slack in the labor market and
the relatively slow pace of improvement remain important reasons that
the committee continues to maintain a highly accommodative monetary
policy.”

While the FOMC, as expected, voted to complete its $600 billion
quantitative easing program at the end of June, it left open-ended its
practice of reinvesting proceeds of maturing mortgage backed securities
to prevent the Fed’s balance sheet and bank reserves from shrinking.

Bernanke said a discontinuation of the reinvestment policy will
likely be an “early step” in monetary tightening, whenever the
“appropriate time” comes. But he made clear it will not occur until
sometime well after the conclusion of QE2 and only after careful
appraisal of economic conditions.

One of the Fed’s statutory responsibilities is to enforce the
Community Development Act (CRA), which mandates that financial
institutions under its purview provide fair access to credit to lower
income individuals and communities.

And so, speaking to the “community development” delegates Friday,
Bernanke expressed particular concern for how economic and financial
difficulties are affecting less well-off people.

“People who were vulnerable to begin with — those with low
incomes, few assets, and less education — have had a more difficult
time weathering the financial storm or recovering from setbacks,” he
said. “The same is true for communities that were already relatively
poor, with fewer community assets and insufficient drivers of economic
growth.”

He said some people “did not share in our country’s general
prosperity, even in good times,” and the financial crisis made matters
even worse.

“Declines in the values of homes and stocks sharply reduced the
wealth of many Americans during the crisis,” Bernanke noted.
“Three-fifths or more of families across all income groups reported a
decline in wealth between 2007 and 2009, and the typical household lost
nearly one-fifth of its wealth, regardless of income group.”

“Unemployment and declines in wealth obviously can make it
difficult for a household to pay its debts on time,” he went on, citing
survey data showing that “lower-income households fell behind on their
payments at a substantially higher rate than higher income
households.”

“Just as lower-income households weather financial storms with more
difficulty, the same is true of communities,” he said. “In short, the
financial crisis and recession touched many families and communities.
But those that were struggling before the crisis were often
disproportionately affected.”

Bernanke said “providing responsible credit for individuals and
small businesses through community development financial institutions
can stimulate economic activity that generates local tax revenues.”

And he pledged, “For our part, we at the Federal Reserve will
remain closely attuned to the economic health of all communities,
including low- and moderate-income communities.”

** Market News International **

[TOPICS: M$U$$$,MMUFE$,MGU$$$,MFU$$$,M$$BR$]

A. Andy asks:

A. If you are a successful trader and have sufficient capital, there is no reason in the world to join a firm (barring an invite to join a top hedge fund).

Keeping every dime you make while controlling all aspects of your trading decisions (or decisions not to trade).

There are advantages and disadvantages of trading for a bank. You are given monthly, yearly targets to meet.

Meet them and you get a bonus that is often very largely discretionary on the part of management. Fail to meet them, and your job can become imperiled…Not a healthy environment in which trade, especially when things are going poorly.

Working for a big fund that collects a 2% management fee and 20% of the profits? That’s pretty tasty…If you get THAT opportunity, take it.

As far as working with these firms in which you trade their capital, I have no experience with them whatsoever, so will not offer an opinion. Others out there may have a better feel for that arrangement than I.

Bottom line, trading for your own book can be the most rewarding, on many levels, if you have the ability to withstand losers as well as winners.

NEW YORK (MNI) – Forecasters see a 60.6 headline index number for
Monday’s manufacturing ISM report in the ongoing three-month MNI
Forecast Competition.

Forecast contest participants delivered their ISM forecasts by the
noon ET deadline.

Wednesday, the 2.5% increase for March U.S. Durable Goods Orders
differed from the average of entries in the contest, +1.1%, by 1.4
percentage point.

Monday, the 300,000 level for March U.S. New Home Sales reported
differed from the average of entries in the ongoing three-month MNI
forecast Competition, 260,000, by 40,000.

Last Tuesday, the 549,000 level for March U.S. Housing Starts at an
annual rate exceeded the average of entries in the ongoing three-month
MNI Forecast Competition by 64,000.

Friday April 15, the Consumer Price Index report result differed by
0.3 point from the 0.8% increase that was the average of entries.

Thursday April 14, the average of the forecasts for the report on
the U.S. Producer Price Index of 1.2% turned out to be off 0.5 point.

Wednesday April 13, the average of the forecasts for the report on
U.S. retail sales of +0.8% turned out to also be off by 0.4 point.

Tuesday April 12, the average of the forecasts for the U.S.
February Monthly Trade Balance of $45.7 billion turned out to be off the
actual result, $45.8 billion, by only $100 million.

Participants can register for the online contest without cost at
http://mni.lumenogic.com/mni/login/login.html where there is more
information and a guided tour. The results will continue to be published
by Market News International.

The contest runs until June 30. The contest will decide who wins
the title of Best Overall Forecaster, the recipient of the $1,500 prize.

When the outcome of each economic indicator is published — the
initial release without revisions — each individual forecast will be
scored for how soon it was registered and for its accuracy. The total
score for every participant will be summed up on a monthly basis and
ranked in descending order.

Each month until June 30, the three forecasters with the highest
scores will be awarded Visa gift cards worth up to $500. The MNI
Forecast Competition outcome for each indicator, determined by averaging
all participant forecasts, will be published on the MNI Main Wire and by
MNI Bullet Points at least 12 hours prior to the official release time.

At the end of June, MNI will award the competition’s Best Overall
Forecaster award with a Visa gift card of $1,500.

The competition covers the following 10 U.S. economic reports:

International Trade Balance
Retail Sales
PPI
CPI
Industrial Production
Housing Starts
New Homes Sales
Durable Goods Orders
ISM Manufacturing Index
Nonfarm Payrolls

** Market News International New York Newsroom: 212-669-6430 **

[TOPICS: MAUDS$,M$U$$$]

• Economy far from where we would like to be
• Economy is in moderate recovery; recent improvement in labor market
• High unemployment contributing to problems in housing market
• Housing market holding economy back

Have a general question on how markets work or the intricacies of the interbank market? send it to jamie (at forexlive.com. The best questions will be answer on our pages. Take a look at previously asked questions so we can cover new ground please.

FRANKFURT (MNI) – Eurozone inflation rose more than expected in
April, raising pressure on the European Central Bank to tighten monetary
policy even as economic sentiment weakened notably.

Eurozone consumer price inflation exceeded expectations to hit a
30-month high of 2.8% year-on-year, according to preliminary Eurostat
data released Friday. No details are available yet, but the strong
reading was likely the result of higher energy costs and the impact of a
late Easter holiday.

But even if one-off factors played a role, today’s data point to a
significant upward revision for ECB staff forecasts in June from the
current 2.3% midpoint. This will add pressure on the central bank to
tighten its monetary policy stance further and could even prompt it to
raise rates as soon as June rather than as previously expected in July.

On the other hand, the Council’s confidence in the strength of the
Eurozone recovery may have weakened after the European Commission’s
economic sentiment indicator dropped for the second consecutive month to
the lowest level since November. An unexpected slowdown of bank lending
to consumers and businesses in March may further add to concerns.

Meanwhile, Eurozone unemployment remained steady at an elevated
9.9% with regional data once again highlighting pronounced divergences
across the region and the vast challenges faced by peripheral countries.
In Spain, the jobless rate rose sharply in the first quarter to 21.3%
from 20.3% in the last three months of 2010, the Spanish statistics
agency, INE, reported.

The latest data certainly has not made the task of the ECB — or
predicting its policy path — any easier. Markets will listen closely to
President Jean-Claude Trichet’s press conference following Thursday’s
Governing Council meeting. Any mention of “strong vigilance” on
inflation would probably mean a rate hike in June.

Trichet is unlikely to make any commitments regarding the ECB’s
exit from non-standard measures, since no decision is required before
the June meeting. The latest comments from Council member Yves Mersch,
echoing those of Executive Board member Juergen Stark, suggest that the
bank is keen to resume its exit.

“We are committed to a gradual exit from this type of measures,”
Mersch said. “The restructuring of banks is not the task or objective of
the central bank.”

Meanwhile, it appears increasingly clear who will lead the ECB
through the difficult times ahead after Trichet’s mandate ends on
October 31: Mario Draghi.

After a number leading Eurozone policymakers — including French
President Nicolas Sarkozy and Eurogroup head Jean-Claude Juncker —
expressed their support for Draghi in recent days, only the consent of
German Chancellor Angela Merkel is needed to clear Draghi’s ascent to
the executive suite of the Eurotower.

After previous hostile attacks, followed by tentative support in
late March, Germany’s all-important tabloid Bild-Zeitung has now thrown
its full weight behind Draghi. Dismissing its previous stance that
Draghi’s Italian roots imply hereditary inflationary tendencies, Bild
praised Draghi in Friday’s edition as “rather German, even truly
Prussian.” The paper even awarded Draghi honorary German citizenship.

Bild, which is known for its close ties to Merkel’s CDU party, may
well have been flying a trial balloon for Merkel while at the same time
seeking to foster popular support for Draghi before the government makes
a commitment. Berlin is leaving its options open as long as possible in
case it needs to react to a potential popular backlash against Draghi.

Draghi’s appointment would require Executive Board member Lorenzo
Bini Smaghi, another Italian, to vacate his post for a Frenchman. French
Treasury head Benoit Coeure or Ambroise Fayolle, France’s administrator
at the IMF and World Bank, have been named as possible candidates.
Xavier Musca, Secretary General at the Elysee Palace — essentially
Sarkozy’s chief of staff — had also been named as a potential
candidate, but according to recent news reports, he is not available.

This is not where the imminent personnel changes at the ECB end.
Bini Smaghi may or may not take Draghi’s position at the Bank of Italy.
If he does not get the post, he will be departing not only from the
ECB’s Executive Board but also from its Governing Council. Alternative
candidates to replace Draghi in Rome include Treasury head Vittorio
Grilli and Ignazio Visco, the Bank of Italy’s deputy director general.

At the end of this month, Executive Board member Gertrude
Tumpel-Gugerell will be replaced by Belgium’s Peter Preat. At the end of
June, Nout Wellink will leave his job as head of the Dutch central bank.
The Dutch government said earlier this week that it has no short-list
for a potential successor yet, but the bank’s Executive Director Lex
Hoogduin and Jeroen Kremers of RBS Nederland have been mentioned.

In a surprise announcement Friday afternoon, the Maltese government
said that Governing Council member Michael Bonello will also resign at
the end of June to be replaced by Josef Bonnici, a Maltese central bank
director and professor of economics.

The most imminent change will come Monday, when Jens Weidmann
starts his eight year term as the president of the Bundesbank. Weidmann,
who was a student of the outgoing Axel Weber, is said to share Weber’s
hawkish policy views. However, a quieter personality and long political
experience suggest that he may be more diplomatic and consensus-seeking
than his predecessor.

–Frankfurt newsroom +49 69 72 01 42; Email: jtreeck@marketnews.com

[TOPICS: MT$$$$,M$$EC$,M$X$$$,M$$CR$]

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