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JPN Tankan Survey Falls by Most in 34 Years The sentiment among Japan's largest manufacturers fell the most in 34 years in the 4th quarter, as companies scaled back production and employment levels in the face of a deepening recession. The quarterly Tankan survey fell to -24 from -3 in the 3rd quarter. Sentiment among large non-manufacturers fell to -9, the first time it has been negative in 5 years. EUR/JPY - Euro Climbs vs Yen in NY Trading
Japanese investors stocks brushed off the Tankan news, as it was mainly expected, and the Nikkei 225 climbed 5.2% during the Asian session. Stocks in Europe were up most of the session as oil producers and miners shares increased, though they fell back down on concerns over the exposure of European banks to the fraud scheme ran by Bernard Madoff. The Euro-Yen, rose to 124.45 in NY trading continuing a rally after the pair dipped sharply in early Friday trading. UK Rightmove House Price Index Down 2.3% In the UK, home prices fell 2.3% in December following a 2.9% decline in November. House prices continue to fall as distressed sellers vie for the smaller pool of potential buyers that can manage to get approved for mortgage financing in a very tight lending environment. SWZ Producer Prices Down 1.4% in November In Switzerland, producer and import prices were down 1.4% in November and cooled to an annual pace of 1.1%. The fall was led by a drop in import prices; a reflection of falling oil and commodity prices. GBP/CHF - Pound Rises to Resistance vs. Franc
The Pound rose against the Swiss Franc, swinging 300 pips from its low near 1.75 at the start of NY trading. Resistance at the 1.7830 level from Friday held, and the Pound began falling in later NY trading as US stocks were mostly in the red. GBP/USD - Pound Soars 400 Points vs Weak Greenback
The Pound-Dollar pair rose 400 points from its low near 1.4920 to hit a session high at 1.5380. The Dollar weakness we saw last week continues, as all the programs designed to bail out the financial system and help the economy is increasing the supply of Dollars in the world. The gains seen in the greenback the past several months are most likely done as investors' flight to safety and the speed of de-leveraging slows. US Empire Manufacturing Index At -25.8 in December In the US, the NY Empire manufacturing index showed conditions continuing to deteriorate in December. The general business index, at -25.8, held near the record low set last month. The new orders and shipments indexes also remained near their recent record lows, and the unfilled orders index dropped to a new low. The indexes for prices paid and prices received fell below zero, and employment indexes remained deep in negative territory. US Industrial Production Declines 0.6% US industrial output declined 0.6% in November, the third month out of four that production has been negative. Motor vehicle and parts production declined 2.8%, after a 3.6% drop in October. Production of consumer durable goods such as cars, furniture and electronics designed to last more than 3 years was down 3%. Capacity utilization, which measures the proportion of factories and plants in use, fell to 75.4% as more and more plants go idle in the midst of the downturn in the US economy. EUR/USD - Euro Surges to 1.37
The Euro-Dollar pair continued its rally from last week, surging 280 pips in today's trading to reach the 1.37 level, breaking through a key level of resistance at 1.35. With the Fed deciding on interest rates tomorrow, traders are pricing in the chance that borrowing costs will move to the lowest on record. USD/CAD - Loonie Gains on Rise in Oil
After climbing on Friday the US Dollar-Canadian Dollar pair fell back down in today's trading. Oil prices rose overnight before retreating in NY trading which dictated the action in this pair. The counter-rally in the afternoon bounced down off support turned resistance at 1.2460. Today's and Tomorrow's Releases Tonight, Japan will release data on its services sector and Australia will reveal housing starts and its RBA meeting minutes. Overnight, Switzerland will post industrial production data and the Euro-zone releases preliminary versions of manufacturing and services PMI. Also overnight the UK reveals consumer prices. Tomorrow morning, the US will post its consumer price index, housing starts and building permits. In the afternoon the Fed will decide on interest rates and is expected to cut by 50 basis points. |
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*Trading OTC Forex on margin carries a high level of risk, and may not be suitable for all investors. The high degree of leverage can work against you as well as for you. Before deciding to invest in foreign exchange or futures you should carefully consider your investment objectives, level of experience, and risk appetite. The possibility exists that you could sustain a loss of some or all of your initial investment and therefore you should not invest money that you cannot afford to lose. You should be aware of all the risks associated with foreign exchange and futures trading, and seek advice from an independent financial advisor if you have any doubts. |
