Tuesday December 2, 2008 - 10:34:36 GMT
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FX Blog- GVI Forex Analysis Thread: December 2, 2008 Pre-New York Open
GVI Forex Analysis Thread: December 2, 2008 Pre-New York Open
- The markets are still trying to recover from the major slide in U.S. equity prices on Monday. Far East bourses tumbled today in reaction. European bourses are modestly softer at this hour. The early call for the U.S. open today is for higher.
- The first week of December is an active one for the central banks. As expected, the RBA made another major rate cut, reducing its cash rate target by 100bps to 4.25%. Some had been hoping for a 125bp rate reduction. As expected, the Bank of Japan announced that additional corporate liquidity will be made available to the banking system.
- Significant rate cuts are still expected from the ECB, BOE and RBNZ on Thursday. EU Finance ministers are meeting today to debate a fiscal stimulus package. There are concerns that German participation will be modest.
- The 2-yr U.S. minus E-Z spread is -119 bps +4 bps. U.S. bond prices are higher. E-Z bond prices have advanced as well.
- The USD is lower vs. the EUR from late Monday. The CHF, JPY and GBP are barely changed. The volatile commodity currencies (AUD, CAD and NZD) are mostly better. Oil is softer and through the pivotal $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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