Wednesday November 5, 2008 - 10:40:07 GMT
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FX Blog- GVI New York Open for November 5, 2008
USD Trading Outlook: New York Open for November 5, 2008
- Obama won a big victory in th U.S. Tueasday. His party gained strong majorities in the House and Senate, but did not get filibuster-proof control of the Senate. That would have required 60 seats, but they won 54 seats. Two independent Senators will caucus with the Democrats. Financial markets will take some comfort from this, as it will tend to contain some of the more radical ideas of the left wing of the party.
- Asian bourses rallied on the back of the U.S. advance on Tuesday. European bouses are down on a â€śsell the factâ€ť reaction today. The early call is for lower share prices in the U.S. Bond prices are lower. Its just a matter of time until they start to break hard under the weight of the massive government borrowing already in the pipeline, not to mention what is to come.
- It is interesting that Volcker is seen as a savior by many. He tenure as Fed Chief was notable for the bitter medicine he dispensed to the economy to break the back of inflation. The earlier Volcker strongly opposed excessive government spending.
- The 2-yr U.S. minus E-Z bond spread is -108 bps +7 bps. U.S. bond prices are lower. Prices on E-Z bonds are better.
- The USD is up sharply vs. the EUR, GBP and CHF. The JPY is better. The AUD, CAD and NZD are weaker. Gold and oil are softer. See the GVI calendar for an updated schedule of data releases in the two weeks ahead.
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