Forex Futures Forum Archive for 08/25/2006

Livingston nh 20:05 GMT August 25, 2006 Reply   
M1 money supply in the US continues to decline as checking deposits shrink - this in conjunction with recent increase in growth rate of consumer credit seems to be related to the mortgage re-fi as homeowners cut back // SO Bernanke has now managed to invert the yield curve while maintaining a negative real interest rate AND pushing M1 into reverse // there is still no definite signal from the equity market of a slowdown in the US economy so the real bubble may be in Fixed Income

Meanwhile China's overinvestment and export dependence may be the cause of the first recession in the current Globalized economy - even a modest reduction in consumer demand in the US will have an hydraulic effect on China -- the US has outsourced jobs and it may also have outsourced recessions

madrid mm 14:05 GMT August 25, 2006 Reply   
For those who are interested. Statement in full at

http://www.federalreserve.gov/boarddocs/speeches/2006/20060825/default.htm

dc CB 13:25 GMT August 25, 2006 Reply   
last post

Tropical Depression 5....to the Gulf of Mexico?

dc CB 13:23 GMT August 25, 2006 Reply   
http://www.nhc.noaa.gov/refresh/graphics_at5+shtml/084736.shtml?5day

Syd 09:39 GMT August 25, 2006 Reply   
China: Number Of Suspect Forex Transactions Rise Sharply


SHANGHAI (AP)--Closer monitoring resulted in a 12-fold surge in the number of China's reported suspicious foreign exchange dealings, the central bank said in its latest report on money laundering.
The report said China uncovered more than 50 major money laundering cases in 2005, about the same as in 2004. But the total amount of money involved more than doubled to CNY10 billion ($1.25 billion) from CNY4 billion in 2004, the report said.

Syd 08:10 GMT August 25, 2006 Reply   
Foreign cenbanks net buyers of US debt in week
LINK

madrid mm 07:25 GMT August 25, 2006 Reply   
Bernanke speaks at 1400 GMT today.

madrid mm 07:21 GMT August 25, 2006 Reply   
Economic Events today / figures

Time Country Event Previous Consensus Actual
GMT
08:30 United Kingdom BBVA Releases Mortgage Lending Figures 0 p 0 p
08:30 United Kingdom Exports 5.30 % 4.80 %
08:30 United Kingdom Government Spending 0.10 % 0.60 %
08:30 United Kingdom Gross Fixed Capital Formation 1.40 % 0.80 %
08:30 United Kingdom Imports 5.70 % 3.70 %
08/25 08:30 United Kingdom Private Consumption 0.30 % 0.80 %
08:30 United Kingdom !! Gross Domestic Product (QoQ) 0.70 % 0.80 %
08:30 United Kingdom !! Gross Domestic Product (YoY) 2.30 % 2.60 %

! – Low volatility expected
!! – Moderate volatility expected
!!! – High volatility expected

madrid mm 07:16 GMT August 25, 2006 Reply   
hello fx jedi

Asia Highlights - 25 August 2006

Japan "new" nationwide core CPI for July +0.2%y/y, weaker than +0.5% expected, Headline +0.3%. Tokyo core CPI for August +0.0%m/m, vs +0.2% expected. Tokyo area August overall CPI +0.9%y/y under the new calculations.

Chief Cabinet Secretary Shinzo Abe says the Government wants BoJ to support recovery through monetary policy.

MoF Sadakazu Tanigaki says no need to change view that deflation end is in sight despite the weak new Japan CPI.

Economics Minister Kaoru Yosano says prices remain on upward trend. End of deflation is in sight desipte the weak CPI. Expects BJ to raise rates slowly. Government will decide in September if deflation is over.

US Trade Representative Susan Schwab will make her first visit as USTR to meet Chinese Commerce Sec Bo Xilai and other in Beijing this Sunday. (Mkt eye Trade talks and any CNY reval comments).

Kyodo: Japan's new PM will be picked in the Diet on Sept. 22 after LDP's presidential election slated two days earlier, government sources said Friday.

Retiring RBA Gov MacFarlane, in FT, says world economy will not face a serious inflation problem even if there is a further significant increase in the price of oil.

The UAE has yet to decide when it will convert part of its reserves from USD into EUR and gold, the CB governor Sultan Nasser al-Suweidi was quoted as saying on Thursday. UAE CB said last month it had decided to convert up to 10% of its $23bln (as end Dec) reserves into euros and gold. - Reuters.

Focus on "new" Japan CPI, which came in mucher weaker than expected and saw broad based USD/JPY, EUR/JPY and Cross/JPY buying after the date release.

Activity resumed toward Tokyo 0600GMT again as large stoploss orders were taken above 116.80-85 on stoploss buying, above morning highs of 116.75, hitting 1-month highs of 116.91, with some speculation of buying ahead of large 117.00 options expiry, 0600GMT Tokyo cut. Good Japanese exporters, mega-city banks and options offers capping 117.00.

Earlier USD/JPY was bought higher, helped further by weekend go-to-bi Nakane fixing. Talks Japanese sec houses, mega-city bks good buyers, taking out offers from US investment houses/ banks. The Japanese securities/ investment houses then dumped, but running into good UK clrs bids in USD/JPY.

EUR/JPY hit day highs of 149.27 on good US money centerr banks, Tokyo buying, after second straight day of failure to take out 148.50-30 stops. Still huge 150.00 options above.

EUR/USD hit 1-wk lows of 1.2747 after stops and rumoured option k-os at 1.2750 taken out, as markets seen long EUR post IFO, Hearing large UK clearers/HK bought on dips, with speculation of more Asian CBs, China, Asian CBs bids 1.2730-50. Focus on Fed Bernanke at 1400GMT.

JPY, CNY eye any CNY rumors as USTR Schwab visit China on Sun.

EUR/GBP weighed by Belgacom buying of Vodafone stake in Proximus, EUR2bln. AUD/NZD capped at 1.2010-20 by local, Aust.

Nikkei -8.24pts at 15,952, closing lower toward its Friday close. 10-year JGB futures hit 5-month highs of 134.12, high since March, after the weaker than expected Japan CPI. 10-year yields -0.095% at 1.700%.

Asian FX ranges: USD/JPY 116.43/116.85, EUR/USD 1.2747/1.2781, GBP/USD 1.8855/1.8892, USD/CHF 1.2373/1.2406, AUD/USD 0.7602/0.7615, NZD/USD 0.6335/0.6356.

Syd 06:35 GMT August 25, 2006 Reply   
Dollar Advances Against Euro Before Tomorrow's Bernanke Remarks (Bloomberg)
..``It is still a 50-50 chance the Fed may raise rates one more time,'' said Richard Vullo, head of corporate foreign exchange sales at Fortis Financial Services LLC in New York. ``Until we have confirmation from the Fed, it is hard to see the dollar get hammered.''....``Until we get over the Fed meeting and a clear message from the Fed that they are done, the dollar may still have some support here,'' said Joseph Francomano, vice president of foreign exchange at Erste Bank in New York. The dollar may rally to $1.27 in the next two weeks, he said...
...``The euro has failed to gain traction'' because too many investors have are betting it will rise further against the dollar this year, said Paresh Upadhyaya, who helps manage $29 billion in currency assets at Putnam Investments in Boston...

Syd 06:12 GMT August 25, 2006 Reply   
EURONOMICS: Missing German Consumer Poses Growth Risk
That the German economy grew at its fastest pace in over five years in the second quarter suggests euro-zone interest rates will keep heading up.

But faltering confidence in the currency union's largest economy points the other way. And so does Thursday's news that private consumption dropped during the second quarter.

Germany's gross domestic product grew a seasonally-adjusted 0.9% during the three months ending with June, but the gain was mostly due to strong business spending, official data showed. Household spending declined by 0.4% from the first quarter and slashed 20 basis points from overall growth. The latter suggest that the euro-zone's economic recovery is not "broadening out" as the European Central Bank expects.

"Household consumption is still the weak link," said Juergen Michels, an economist at Citigroup.

That has been a refrain for five years in Germany, but many analysts expected the country's export-led industrial resurgence would now lead it out of the gloom - especially as the country hosted the World Cup.

That apparently did not happen. And any improvements in consumption during the second half of 2006 are likely to be short-lived as consumers move up purchases before value-added tax jumps in January to 19% from their current 16% rate, Michels said.

"It is unlikely that the German consumer will become a sustained driver of growth," said Andreas Rees, an economist at HVB. "Consumers are still too worried about rising energy prices and dearer healthcare costs."
The ECB, which has raised rates four times since last December to 3.0% from 2.0%, has said numerous times that monetary tightening is warranted as strong business trends will translate into more jobs and more consumer spending.

That assumption - and with it expectations that the ECB will take its benchmark rate to 3.5% by the end of the year - is looking shakier.

German 10-year bunds gained Thursday, reversing Wednesday's slide and bringing their gain this week to more than 60 basis points. Yields are now at 3.8%, down from above 4.0% last week.

And clouds are gathering. Although the Ifo business sentiment index deteriorated only slightly in August, to 105.0 in from 105.6 in July, it follows sharper falls in the ZEW and Belgian business sentiment surveys.

The Ifo index has of late reflected corporate profits and production trends, both of which may not be sustainable at current buoyant levels.

And with household spending sluggish and global demand sliding, German production may struggle to find a buyer. Indeed, an inventory buildup - which typically means a drag on future production as stock is sold off - made the biggest contribution to second-quarter GDP growth, having had a similar effect on France's seemingly stellar 1.1% expansion during the period, noted Gabriel Stein of Lombard Street Research.

Developments in private consumption, meanwhile, have puzzled investors. The Federal Statistics Office revised upward its reading of private spending growth in the first quarter to 1.1% from 0.7%. While an improvement, that still happened some time ago.

To be sure, classifying foreign tourist spending during the World Cup as an export rather than as consumer spending dragged down the private consumption figure.

But that should have helped the export data. Instead, exports grew by only 0.7% in the second quarter, well below the 1.9% average of the past eight quarters, representing a "cause for worry", according to Stein.

Neither Stein nor other analysts expect Germany's economy to screech to a halt. But expansion at the trend rate of 1.5% will make it harder to create jobs and boost household income.

Such an outcome doesn't fit very nicely with what the ECB has called its "baseline scenario."

houston st 01:13 GMT August 25, 2006 Reply   

I posted a few updated charts here...remove the underscore from the link to get there...good trades.