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UK Housing Prices Continue Declining Let's start in the UK, where for the seventh month in a row the number of surveyors reporting a drop in housing prices outpaced those seeing prices climbing. Inventories of unsold homes continue to increase, encouraging buyers to negotiate lower prices. The downturn in housing is a big factor in the recent slowdown of the UK economy. UK Retail Sales Cool After January's Discounts The BRC retail sales monitor showed sales slow to an annual pace of 1.5% compared to 2.6% in January. Clearance sales were a strong factor in boosting January's figure, but now, with consumer confidence mired in multi-year lows, it is likely that they will tighten their belts in the coming months. GER ZEW Economic Sentiment Improves for 2nd Month The ZEW Center for European Economic Research said its index of investor and analyst expectations in Germany rose to -32 from -39.5 in February. It's the second straight month that the data beat expectations. This data goes hand in hand with the IFO Business Climate Index, which has shown two months of improvement in business conditions. The German economy seems to be weathering the slowdown in the US better than other Euro-zone countries. EUR/USD - Strong Moves Back and Forth Action
The Euro-Dollar pair had a wild swing this session. Following the ZEW report the pair surged 150 pips, coming close to the 1.55 level. However as NY trading got underway, the Fed announced that it will inject $200 billion into the banking system in order to ease credit markets. The announcement was welcomed by financial firms as the Fed will lend Treasuries in exchange for debt that includes mortgage-backed securities. The news boosted US stock markets and the Dollar. In NY trading the pair fell around 180 pips. USD/JPY - Dollar Rallies as Stocks Rally
The Dollar-Yen pair rallied from its 8-year low, with the pair's gains accelerating during NY trading. US equities rallied after 3 sessions of losses, with the Dow industrials index up more than 400 points at the day's close. The Dollar-Yen pair was trading near 103, about 100 pips higher than its level at the NY open. AUD/JPY - Australian Dollar Rallies as Investor Confidence Returns
Risk appetite returned to carry trade pairs, as can be seen here in the Aussie-Yen. The Yen has been on a tear as US equities faltered. Today's rally in stocks helped push up the value of high-yielding currencies, like the Australian Dollar. The pair was up 190 pips since NY trading, and 280 pips from its session low overnight. The pair broke above yesterday's high and was trading in the range seen last Friday. US Trade Deficit Widens, Though Smaller Than Expected The US Trade deficit expanded, but at a smaller extend than economists had anticipated. Total imports grew by $2.7 billion while exports were up $2.4 billion. CAN Trade Surplus Up to C$3.3 Billion In Canada, the trade surplus was better than expected, posting a balance of C$3.3 billion. Exports increased at their fastest pace in more than a year, totaling 38 billion. A big portion of the increase was driven primarily by increases to prices, and not necessarily an increase of volume of goods traded. CAN Housing Prices Up More Than Expected The new housing price index in Canada also performed better than forecasts. Prices rose 0.6% on the month. On the year, prices rose 6.5%, the second year-over-year increase, following 16 months in which gains in hew housing prices had been decelerating. USD/CAD - Dollar Gains on Loonie
The US Dollar- Canadian Dollar started the session falling in favor of the Loonie, until New York trading, when the pair found support near 0.9890. From here it recovered around 75 pips to set a session high near .9970. Upcoming Releases Tonight, Japan will reveal several fundamental indicators including revised GDP data for the 4th quarter, the corporate goods price index, current account, consumer confidence and the Bank of Japan Meeting minutes. Overnight, the UK will post trade balance, while the euro-zone unveils its industrial production figures. Switzerland finishes the Euro session off with its ZEW Expectations. There are no big releases for the US, except for the weekly crude oil inventories which will have an impact on oil futures. |
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