March 22nd, 2010 20:55:04 GMT

Let’s spend the night together…

by

Or the morning, depending on your local. Sean will be joining us mid-session in Asia, so I will be manning the helm for a few more hours…

Risk trades have been in recovery mode for most of the US afternoon after a very rocky early New York session.

Things got so bad that EUR/CHF fell to within 10 pips of its all time low, touching 1.4310, as Greece fired back at Germany. That cross ends the NY session at 1.4345.

16 Comments

March 22nd, 2010 20:20:54 GMT

ForexLive US wrap-up: Dive below 1.3500 short-lived

by

EUR/USD dove to 1.3463 as Greek deputy PM Panaglos made incendiary remarks aimed at Germany, accusing Merkel of allowing German banks to speculate against Greece and welcoming the resulting euro weakness as a boon for German exports. Prices did not spend long near the lows as traders were well aware that the three prior drops below the 1.3500 level were also short-lived. Four trips below 1.35 and not one close below that level yet.  We tripped stops above 1.3550 and reached 1.3569 before stalling.

Pressure grows on Merkel to get in line with the rest of the EU in seeking a fall-back for Greece if rates don’t fall.

GBP/USD was a big mover today, recovering overnight losses to 1.4934, reaching 1.5100 late in the day. EUR/GBP selling was the culprit for the EUR bid as EUR/USD fell and a stable cross at the lows allowed cable to rebound against the dollar. Position adjustment rather than fundamentals looked to have been the catalyst. Central banks continue to liberally add to long GBP/USD positions below 1.500, it should be noted.

USD/JPY slid to 89.84 as EUR/JPY was slammed in early US trade. It bounced right back as EUR/USD recouped lost ground, rising to 90.20 in the afternoon. Rumors of Japanese “semi-0fficial” (Kampo)  buying were heard again below 90.00. AUD/USD dipped below 0.9100 with the euro but ends the day a cent above the lows at 0.9180. A turnaround in commodity prices and lessening risk aversion helped boost the AUD.

2 Comments

March 22nd, 2010 20:15:14 GMT

Fed Lockhart: US Deficit Concerns Could Hike Infln Expectatns

by

–Must Contain Infln Expectations If Rates To Stay Approp For Recov
–Accommodative Pol Appropriate For Tentative, Fragile Recovery
–Greece Situation Deserves ‘Rapt’ Attention
–Greek, Euro Fear Could Spark Dlr Safe Haven Flow; Currency Appreciates

By Brai Odion-Esene

WASHINGTON (MNI) – Atlanta Federal Reserve President Dennis
Lockhart warned Monday that although he is not concerned about inflation
in the immediate future, concerns over the rising U.S. deficit — and
belief the country will inflate out of the problem — could increase
inflation expectations and present a dilemma for monetary policy.

“If such a situation begins to develop, the Fed will face a
difficult trade-off between continued support for the recovery and
aggressive action to re-anchor inflation expectations,” Lockhart in
prepared remarks to the Naples World Council on World Affairs in
Florida.

He noted that current monetary policy as it stands is “obviously
very accommodative, and, in my opinion, is appropriate for a recovery
that is tentative and facing headwinds.”

However, the Fed official said government finances are strained at
all levels, with the rising debt-to-GDP ratio a source of “great”
concern. Not only do these fiscal pressures represent another downside
risk for the broad economy, he said, “but I see a connection to
inflation risk as well.”

Although the current accommodative stance of policy is not
inconsistent with the dual mandate as long as inflation expectations
remain well anchored, Lockhart cautioned that if the public becomes
convinced nothing will be done to restore the federal fiscal balance,
especially at the federal level, this skepticism may be reflected in
inflation expectations.

“In my view, the capacity to maintain interest rates at the level
appropriate to support the recovery depends critically on containment of
inflation expectations,” he said.

He said the “drama” in Greece should heighten recognition of the
urgent need in the U.S. for a credible path to fiscal sustainability.

For now, however, Lockhart said inflation expectations are holding
steady, and incoming data suggest price pressures are muted. “It is hard
for me to summon much concern about inflation in the immediate future,”
he said.

Lockhart in his remarks also provides his outlook for the economy
– domestically and globally — saying he agrees with forecasts that see
first quarter GDP coming in around 3%.

“Underlying continued growth is a steady improvement in private
spending in the United States. Consumer spending is expanding modestly,”
he said. Still, “The recovery under way seems at this juncture to be
tentative and fragile.”

Overall, Lockhart expects the U.S. to experience a “relatively
modest recovery, with slow reduction of unemployment.” He predicts
various headwinds to hold back GDP growth. These include:

“A weak banking sector that is slow to expand credit in part
because of weak loan demand and commercial real estate problems, subdued
consumer activity reflecting a more frugal consumer mindset as well as
restricted consumer credit, and extremely cautious business investment
in both inventory and capital goods.”

The outlook for the global economy also continues to see
improvement, the Atlanta Fed chief said, noting that “China’s economic
growth has been especially strong, lifting global demand for raw
materials and capital goods.”

Latin America has also weathered the crisis “much better” than
previous downturns he said, due to stronger economic fundamentals. But
Japan’s economic growth trajectory remains very uncertain, while the
recovery in Europe is fragile due to concerns over Greece and other
nations with large fiscal burdens.

Lockhart expanded on ways he believes Greece’s problems could
impact the U.S., for instance that fiscal problems could dampen euro
area growth and so constrain U.S. exports.

Second, he warns that safe haven currency flows from the euro into
dollar assets could cause appreciation of the dollar and hurt U.S.
export competitiveness.

Third is the possibility that the Greek fiscal crisis could lead to
a broad shock to financial markets — impacting the banking system or in
the form of a general retreat from sovereign debt, Lockhart said.

But at this point, “these possibilities are not factored into my
outlook in any way. But developments around the Greek situation deserve
rapt attention,” he concluded.

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

[TOPICS: M$U$$$,MMUFE$,MGU$$$,MFU$$$,MT$$$$,M$X$$$,M$Q$$$,M$J$$$,M$$FX$]

Comments Off

March 22nd, 2010 19:49:52 GMT

Deficits as far as the eye can see

by

Spain’s economy minister says the public deficit in that country reached 11.2% of GDP last year while US fiscal woes worry a member of the Fed.

In the US, Atlanta Fed Lockhart says that Greece’s budget crisis highlights the US’s own fiscal woes.

US “fiscal largesse” ( a term you will hear a lot more going forward) could boost inflation expectations, complicating monetary policy.

No reaction from the markets as EUR/USD snoozes at 1.3550.Cable is the standout, pumping up against the 1.5100 level late in the day.

Comments Off

March 22nd, 2010 19:20:16 GMT

USD/JPY at afternoon highs but more resistance above

by

USD/JPY has stalled several times in the 90.20 area this afternoon and seems, like the rest of the market, to be going no where fast. Should the dollar break higher, there are offers stacked up at the 90.40/45 level but stop-loss buy orders are just above those offers.

The year-end JPY repatriation to Japan is beginning to slow but traders expect JPY-positive flows for the Dai-Ichi Life IPO to follow-close behind the year-end repatriation.

USD/JPY trades quietly at 90.17.

12 Comments

March 22nd, 2010 19:05:19 GMT

US Reid: To ‘Cross The Finish Line This Week’ On Health Care

by

–Senate Majority Leader: Reconciliation Bill Debate Begins Tuesday
–Sen. Reid: Blasts GOP For ‘Strategy of Delay, Myths and Fear’
–Senate Minority Leader McConnell: Dems Hurt Themselves W/Health Bill
–Sen. McConnell: Reconciliation Makes Health Bill ‘Even Worse’

By John Shaw

WASHINGTON (MNI) – A week of hard, partisan fighting over the final
piece of health care legislation began Monday, with Senate Majority
Leader Harry Reid predicting final passage of a reconciliation bill and
Senate Minority Leader Mitch McConnell vowing vigorous resistance.

In remarks on the Senate floor, Reid called House passage of a
sweeping health care bill Sunday night “momentous and historic.”

Reid said the Senate will begin debating the reconciliation bill
Tuesday, adding that he expects the year-long effort to pass health care
reform will “cross the finish line this week.”

Reid blasted Republicans for embracing a “strategy of delay, myths
and fear” in opposing the bill.

McConnell, speaking after Reid, scorched Democrats for trying to
push through Congress health care legislation which he said is deeply
unpopular with the public.

He said passage of health care would be a negative “turning point”
for Democrats in Congress.

McConnell did not reveal what strategy Senate Republicans will use
to try to defeat — or delay — passage of the reconciliation bill this
week.

But he said the reconciliation bill, which is designed to fix the
underlying health care legislation, would, in fact, “make it even
worse.”

“Enough is enough,” McConnell said.

The reconciliation bill makes a number of “fixes” to the
comprehensive health care bill that President Obama is expected to sign
Tuesday.

If the Senate passes the reconciliation bill without any changes,
it goes to Obama for his signature. But Senate Democrats first must
defeat Republican amendments and parliamentary attempts to remove
provisions from the bill. If the legislation is altered at all, it must
be sent back to the House for its consideration.

Under Senate rules, reconciliation bills are limited to 20 hours of
debate and all amendments must be germane to the bill.

McConnell said over the weekend that Republican amendments will
“highlight the massive Medicare cuts, the massive tax increases, and
other deficiencies that we think are the reason the American people are
against this bill.”

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

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

Comments Off

March 22nd, 2010 18:10:20 GMT

Consensus growing for framework that covers all, just not Greece

by

Trichet mentioned that there should not be a loan subsidy only for Greece but that there should be a mechanism that protects all the Eurozone members.

Sounds like Italy has a similar idea.  Foreign Minister Frattini is on the wires with a framework that would valid for all. Each country would contribute to a rescue plan in proportion to their weight in the ECB.

France, Spain, Italy and Belgium all back Barroso’s ideas on Greek aid, Frattini says. He also rules out expulsion for any Euro group member, saying ti would weaken the whole euro zone.

EUR/USD trades quietly after a busy New York morning. We trade now at 1.3550 at mid-afternoon.

1 Comment

March 22nd, 2010 17:45:26 GMT

Update 2: Trichet: To Rethink Collateral Issue If Necessary

by

–Adds Comment on ECB Opposition to Idea of a Eurobond

BRUSSELS (MNI) – The European Central Bank does not expect Greek
government bonds to be downgraded again, but if they are it might have
to reconsider its plan to revert back to pre-crisis collateral rules at
the end of this year, European Central Bank President Jean-Claude
Trichet said Monday.

“At the present moment, I qualified the decisions which have been
taken by the Greek government…as convincing and courageous,” Trichet
said, adding that he expects “all financial institutions will
progressively realize that this is convincing.”

This why “my working assumption is that “we won’t have
difficulties, because there won’t be downgrading of the signature of
Greece,” Trichet told the European Parliament.

“If it should appear that this working assumption is too
optimistic, then we would look at the situation,” he added.

Trichet reiterated his opposition to a jointly-issued Eurobond,
arguing that such an issuance would blur the distinction between “good”
and “less good” management.

“We are in a system that is certainly not federal, so it is not
necessarily a good thing not to distinguish between good and bad
management,” he explained. That is “why we have never been in favor of
issuing treasuries in the Eurozone under one single signature,” he
added.

Asked whether the ECB should coordinate the issuance of treasury
bonds in the Eurozone, Trichet said, “I would guard against involving
the ECB too much in helping coordinate treasuries’ issuance.”

“I do not think it would be appropriate for the ECB or any central
bank to be too engaged in the handling of treasuries,” he added.

Following the collapse of Lehman Brothers in autumn 2008, the ECB
lowered its minimum acceptable rating on collateral eligibility from A-
to BBB- as part of its non-conventional support measures. It always
intended to return at the start of 2011 to the old framework, which
stipulates that a security must have a rating of A- or higher from at
least one of the rating agencies.

Greek debt would still qualify under the old rules, since it has an
A2 rating from Moody’s. However, now that Standard & Poor’s and Fitch
have cut their rating to BBB+, a downward revision from Moody’s would
create problems if the ECB returned to its initial threshold.

Until recently, the ECB insisted that it would not keep any
emergency measure in place longer than anticipated for the sake of a
single country.

–Frankfurt bureau. Tel: +49-69-720-142. Email: frankfurt@marketnews.com

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

Comments Off

March 22nd, 2010 17:45:24 GMT

ECB Trichet: China Should Allow The Yuan To Appreciate

by

BRUSSELS (MNI) – Global imbalances must be addressed if a new
crisis is to be averted, and China should contribute by allowing its
currency, the yuan, to gradually appreciate, European Central Bank
President Jean-Claude Trichet said on Monday.

Global imbalances “are largely responsible for the dramatic crisis
we had to cope with at the global level,” and if they are not addressed
“then we would have the best recipe for the next crisis,” Trichet told
the European Parliament.

Vis-a-vis China, “the message is that progressive and orderly
appreciation of the Chinese currency would be both in the interest of
China and the interest of the global economy,” Trichet said.

–Frankfurt bureau. Tel: +49-69-720-142. Email: frankfurt@marketnews.com

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

Comments Off

1 13,229 13,230 13,231 13,232 13,233 13,234 13,235 13,236 13,237 13,238 13,239 15,623

About Forexlive

Founded in 2008, ForexLive.com is the premier forex trading news site offering interesting commentary, opinion and analysis for true FX trading professionals. Get the latest breaking foreign exchange trade news and current updates from active traders daily. ForexLive.com blog posts feature leading edge technical analysis charting tips, forex analysis, and currency pair trading tutorials. Find out how to take advantage of swings in global foreign exchange markets and see our real-time forex news analysis and reactions to central bank news, economic indicators and world events.

Our authors have years of experience in financial markets and provide diverse, thought-provoking updates relating to news about global macro events and the worldwide forex economic calendar, with frequently updated content that is educational for traders at all levels from beginner to novice that can help traders make better decisions about forex trading. Our forex news focuses on G10 events, macroeconomic indicators, major equities indexes, treasury and bond yields from around the world, politics as it relates to forex trading and news from the FOMC as well as global central banks in, Europe and Asia.

Learn More About The Forex Live Authors Here and Follow us on Twitter, Facebook & Google+

Top

© Copyright 2014 ForexLive™  |  Advertise With Us  |  Login To Comment  |  Sitemap

HIGH RISK WARNING: Foreign exchange trading carries a high level of risk that may not be suitable for all investors. Leverage creates additional risk and loss exposure. Before you decide to trade foreign exchange, carefully consider your investment objectives, experience level, and risk tolerance. You could lose some or all of your initial investment; do not invest money that you cannot afford to lose. Educate yourself on the risks associated with foreign exchange trading, and seek advice from an independent financial or tax advisor if you have any questions.

ADVISORY WARNING: FOREXLIVE™ provides references and links to selected blogs and other sources of economic and market information as an educational service to its clients and prospects and does not endorse the opinions or recommendations of the blogs or other sources of information. Clients and prospects are advised to carefully consider the opinions and analysis offered in the blogs or other information sources in the context of the client or prospect's individual analysis and decision making. None of the blogs or other sources of information is to be considered as constituting a track record. Past performance is no guarantee of future results and FOREXLIVE™ specifically advises clients and prospects to carefully review all claims and representations made by advisors, bloggers, money managers and system vendors before investing any funds or opening an account with any Forex dealer. Any news, opinions, research, data, or other information contained within this website is provided as general market commentary and does not constitute investment or trading advice. FOREXLIVE™ expressly disclaims any liability for any lost principal or profits without limitation which may arise directly or indirectly from the use of or reliance on such information. As with all such advisory services, past results are never a guarantee of future results.