Monday November 24, 2008 - 20:38:56 GMT
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FX Blog- GVI Analysis November 25, 2008
GVI Forex Analysis Thread: November 25, 2008
Pre-Far East Open
- The Citi bailout program could turn out to have been a watershed events for the markets, but we will not know if this true for several months. Importantly, the government drew a bright red line around Citibank and all of the other institutions named inside that inner circle. That does not mean that future problems will not arise, but it does mean that the government will not allow bear raids to succeed.
- The Citi bailout plan took some of the USD risk premium out of the market. Japanese markets were closed for a holiday today. Far East bourses otherwise closed mixed to weaker. European bourses closed up shaply. The call for the closing of U.S. shares is for sharply higher.
- October German Ifo data were even weaker than expected and will inftensify the pressure on the ECB to make an aggressive rate cut in December. German industrial orders were also substantially weaker than expected.
- In the press conference about Obama economic team, the president-elect got mixed reviews due to his lack of specificity and the fact that he appeared uncomfortable discussing the topic.
- The 2-yr U.S. minus E-Z spread is -103 bps -2 bps. U.S. bond prices are lower. E-Z bond prices have fallen as well.
- The USD is sharply lower vs. the EUR, CHF and GBP from late Friday. The JPY is weaker. The volatile commodity currencies (AUD, CAD and NZD) are sharply higher. Oil has held the critical $50 line. Gold is higher. See the GVI calendar for an updated schedule of data releases in the two weeks ahead.
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