January 24th, 2011 16:55:42 GMT.

US CongressWk: Obama Tuesday, CBO Report Weds To Shape Debate


–President Obama Expected To Call For ‘Responsible’ Deficit Cuts
–President Also Expected To Endorse Tax Reform
–Congressional Budget Office To Release New Deficit & Econ Report Weds
–CBO Chief To Testify To Senate Budget Panel Thursday
–Tsy’s Geithner Invited To Testify Wednesday on TARP

By John Shaw

WASHINGTON (MNI) – President Obama’s State of the Union address
Tuesday and the Congressional Budget Office’s release of its new ten
year budget and economic outlook Wednesday will kick off the year’s
fiscal and policy debate.

Obama will address a joint session of the House and Senate at 9
p.m. EST. In his speech, Obama is expected to continue to send signals
that he wants to work with a politically divided Congress on initiatives
that boost growth and control spending.

In a video preview of his speech emailed to supporters, the
president says “my principle focus, my number one focus, is going to be
making sure that we are competitive, that we are growing and we are
creating jobs, not just now but well into the future.”

In the video, Obama says that it’s important to deal with the
budget deficit “in a responsible way,” adding that “we’ve got to reform
government so that it’s leaner and smarter for the 21st century.”

Many in Congress and elsewhere are expecting the president to make
a vigorous case for tax reform, but it’s unclear if he will urge
lawmakers to pass a comprehensive overhaul in the new Congress or focus
first on corporate tax reform.

House Budget Committee Chairman Paul Ryan will deliver the official
Republican response to Obama’s speech Tuesday evening. He is expected to
focus heavily on a call to cut spending.

Before the speech Tuesday, the House is expected to pass a
GOP-drafted resolution that would call on Ryan to introduce a plan to
reduce the rest of fiscal year 2011 non-security spending to FY’08
levels or lower.

The year’s fiscal debate will sharpen Wednesday when the CBO
releases at 10 a.m. its new budget and economic estimates. The CBO’s
director, Doug Elmendorf, will hold a briefing on the report at 11 a.m.
Wednesday and then will testify on the report before the Senate Budget
Committee Thursday at 10 a.m.

Neil Barofsky, the special inspector general for TARP, will testify
Wednesday at 9:30 a.m. before the House Oversight and Government Reform
Committee on TARP. Treasury Secretary Tim Geithner has been invited to
testify at that same hearing.

The House Budget Committee will hold a hearing Wednesday at 10 a.m.
on the fiscal impact of health care reform. Richard Foster, the chief
actuary of the Centers for Medicare and Medicaid Services will testify.

The House Ways and Means Committee will also hold a hearing
Wednesday at 10 a.m. on the economic effects of the health care overhaul

The House Financial Services Committee will hold its organizational
meeting Tuesday at 10:30 a.m. and then will hold a hearing Wednesday on
ways to boost economic growth and job creation. The panel will hear from
a wide range of witnesses including John Taylor of the Hoover
Institution and Stanford University and former Federal Reserve Board
vice chairman Donald Kohn, who is now a scholar at the Brookings

President Obama is set to release his fiscal year 2012 budget on
February 14.

Congress is still trying to complete work on the FY11 budget.
Before adjourning in late December, Congress passed a stop-gap spending
bill that funds the government until March 4.

** Market News International Washington Bureau: (202) 371-2121 **

[TOPICS: M$U$$$,MFU$$$,MCU$$$]


January 24th, 2011 16:48:03 GMT.

EUR/USD taking a well-deserved breather


EUR/USD reached 1.3686 before finally slipping into a consolidation. Not a bad days work for the pair that continues to move its way higher in stair-step fashion.

Expect some profit-taking toward 1.3700 from accounts who aggressively flipped from short to long over 10 days ago when the ECB began sending hawkish signals. Options protection ahead of a 1.37 barrier is expected as well.

1.3650 is intraday support on pullbacks near-term. Expect a few trailing stops to gather around the 1.3640 level on pullbacks now.


January 24th, 2011 16:33:17 GMT.

AUD/USD absorbing offers above 1.0000


AUD/USD has been firming along with EUR/USD, pushing up through the 1.0000 level a short while ago. Contacts report that large amounts of AUD have gone through at around the 1.00 level but that sizable offers are coming into the market and being absorbed. We’re edging above the 10-day average at 1.0011 as we write. 1.0077 is next resistance.

US real money accounts have been good buyers on the recent strength.


January 24th, 2011 16:20:44 GMT.

Dallas Fed index edges up


The index rose to 117.3 in November from 116.4 in October.

The Dallas Fed district accounts fro about 8% of US economic output…


January 24th, 2011 15:51:38 GMT.

Can’t keep a good euro down…


Rising hopes for an ECB rate hike and a final comprehensive package to solve Europe’s sovereign debt woes are lifting EUR/USD to fresh trend highs.

If Europe is an fact able to pull off the ambitious reforms the think tank forecasts, most of the European banking threats which hang over the market could be dealt with after being swept under the rung for far too long.

This is all supposition at this stage but the market is trading off it, eying the key 1.3700 area where another barrier option is rumored.

A I said earlier, if long, I’d be a scale out seller into strength as we approach technical targets of 1.3700/35, perhaps keeping a small core long if EUR gains are sustained.


January 24th, 2011 15:45:18 GMT.

Swiss President: Switzerland To Keep Supporting The Euro


BERLIN (MNI) – Switzerland will continue to support the single
European currency, Swiss President Micheline Calmy-Rey said at a press
conference after a meeting with German Chancellor Angela Merkel here.

As an export nation Switzerland is carefully monitoring the
development of the Eurozone’s sovereign debt crisis, Calmy-Rey

“I could assure [Chancellor Merkel] in our talks that Switzerland
is making a contribution to support the euro and the stability of the
Eurozone,” the president said.

“The Swiss National Bank has engaged itself for the stability of
the euro by buying dozens of billions of euros,” Calmy-Rey pointed out.
“Approximately 70% of our reserves are now in euro,” she remarked.

–Berlin bureau: +49-30-22 62 05 80; email: twidder@marketnews.com

[TOPICS: M$X$$$,MGX$$$,MFX$$$,M$$CR$,M$G$$$,MT$$$$,M$$EC$]


January 24th, 2011 15:35:22 GMT.

MNI US Retail Trade Weekly Index 63.0 Thru Jan 22 vs 63.5


By Mark Pender

NEW YORK (MNI) – MNI’s U.S. retail trade index slipped a half point
in the Jan. 22 period to 63.0 indicating strong year-on-year growth but
no significant month-on-month change, according to the results of Market
News International’s weekly survey.

Total sales edged two tenths lower to a year-on-year +5.2%, a level
that’s also the four-week average.

Same-store sales ended four weeks of decline with a one tenth rise
to +2.4%.

News flow has so far been limited in January, a low sales month in
which month-to-month seasonal adjustments play the most significant role
of the year for the government’s retail sales report.

Income for the sample is soft and steady at an on-year +5%. The
period’s sample size is 165 chains representing 126,000 separate retail

Editor’s Note: MNI compiles its retail trade index based on a
weekly sample of company news and data.

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


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