Tuesday November 9, 2004 - 11:01:33 GMT
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FOREX: US OPEN MARKET POINTS 11-09-04
In Japan the Eco Watchers survey which monitors the general business sentiment of barbers, taxi drivers, waiters and other service related workers printed a disappointing 46.4 versus 47.3 for the prior month. We have always liked “the man in the street” quality of the survey because we felt it accurately reflected the true business conditions in the field. Tonight’s report – which registered the lowest value in a year – confirms the softness of the Japanese economy and bodes poorly for the more broader Japanese Consumer Confidence survey due later in the week.
In Europe, a more toney crowd – business and investment analysts – is feeling just as blue, as the ZEW survey of Economic sentiment reports a whopping drop to 22.1 from 33 expected nearly hitting a two year low. The ZEW was brought down by the usual suspects; high energy prices and weak domestic demand. Now, the consensus view in Euro-Zone is that growth will not return until well into 2005.
Despite the negative eco data, the euro stubbornly holds the 2900 handle as we go to print. Every market participant in FX understands that the euro is trading off US fundamentals rather than its own. Yet as we noted yesterday, the unit cannot trade on dollar bearishness alone. Unless the upcoming US data reports materially worse than the weak Euro-zone releases we’ve seen so far, the euro is likely to retrace some of its gains from last week because it cannot be supported by sentiment alone.
FX Spot Overnight
- EUR trades down to 2900 but holds it off terrible ZEW data
- JPY heads back to 106 as Japanese economy shows more signs of slowdown
- GBP trades at 8550 as Visible Trade Balance reports 700M better than last month with exports at 2 year highs
- CHF trades in sync with EUR/USD
- 15:00GMT – (10:00 AM EST) USD Wholesale Inventories (SEP) Expected 0.7%, Previous 0.9%
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