Thursday February 7, 2008 - 21:35:02 GMT
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FX Blog: Market Snapshot Far East Open
GVI Market Snapshot-- Far East Open
- The USD soared vs the EUR and GBP, plus it is ending stronger on the day vs. the carry trade funding currencies (JPY and CHF).
- The U.K. saw weaker than expected U.K. production figures and then a -25bp cut in its repo rate to 5.25%. The BOE policy statement was equivocal on inflation. The BOE MPC appeared to be waiting for the quarterly inflation report in about a week.
- The ECB kept policy on hold (4.00% refi rate), as expected. The tenor of comments by President Trichet and the ECB policy statement were closely scrutinized. While Trichet did not signal policy ease in March, the markets moved forward its expectations for a rate cut to the niddlr of 2Q07. 2-yr schatz yields fell sharply by 14bps to 3.12% in anticipation of lower EZ rates.
- The commodity currencies (AUD, CAD and NZD) are trading mixed. Gold and oil closed firmer.
- Many of the far east equity markets were closed for Lunar New Year observations. In Japan the Nikkei gained. European bourses were weaker. U.S. equities are better. U.S. Bond prices closed very weak.
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