rating for Greece, negative outlook for other EMU countries
off to a disappointing start
Â·ECB view that
inflation risks are balanced is difficult to comprehend
Euro under pressure
the course of the week, EUR-USD has fallen significantly. The single European
from about 1.37 at the end of last week to below 1.31 at times and was trading below
1.33 at the close of the week. In our view, there are three major factors
weighing on the euro at present:
The drastic deterioration of the growth outlookin the eurozone:
It looks as though economic output will
contract even more sharply in the eurozone than in the US
in 2009. Against this background, markets are assuming that further sizeable
interest rate cuts will be necessary in the euro area. The reactions of
policymakers, including the ECB, are regarded as being too slow and inadequate.
And if policymakers do not pull out all stops, stabilisation will be delayed,
and the problems will intensify.
Weakness in equity markets:
from the weak economic data, the start of the reporting season is currently
dampening investorsâ€™ mood considerably. The earnings reports released so far
have not been at all encouraging.
Concern over the fiscal strength of some euro nations:
credit rating has been downgraded, the outlook on some other EMU member statesâ€™
ratings has been put on negative, and there are rumours (officially denied)
might request the support of the International Monetary Fund. There is growing
concern that some of the smaller member states, which are in a weaker economic
position, might not be able to withstand the fiscal burden of the financial and
economic crisis. There is considerable uncertainty in the markets about the
risks stemming from the financial and property sector; one chilling example is Iceland,
where the extent of the debt burden exceeded the countryâ€™s economic output by far.
Moreover, the institutional uncertainties are higher than in the US
for example: how much solidarity
is there amongst the member states, and will the ECB be the lender of last
sustained slide of the US economy â€“ where the rapid increase in unemployment is
threatening to put consumer spending under even more pressure â€“ is not having
an impact on the dollar at the moment. This is probably partly due to the Obama
factor. His inauguration stands for a fresh start, and the massive stimulus
package, currently in preparation, is making the political event more significant.
The $800bn package is likely to help to stabilise economic activity, at least
for a while. (In the long term, however, it should be borne in mind that the
correction of the US
current account deficit is an essential part of the global adjustment process.
Thus the dollar only has limited appreciation potential).
EMU inflation risks balanced?
ECB has succumbed to the pressure of the data and cut interest rates by 50
basis points to signalled that there was still scope for further cuts, but that
a decision was not likely to be taken until March, when the new macroeconomic
projections are released.
cutting interest rates on Thursday, the ECB acted as markets had been
expecting. Over the
few weeks, the economic indicators had deteriorated so drastically, that the
was no longer valid. However, the accompanying statement and ECB president Trichetâ€™s
comments betray a certain lack of direction. The ECB governing council did
admit that growth risks have become evident and that inflation pressure has
diminished â€“ due to the unfavourable growth outlook. And it said that there is
unmistakable evidence of downside risks to growth, despite the interest rate
cut. But at the same time the governing council kept claiming that the
medium-term inflation outlook corresponds with the price stability target (this
had already been maintained in December) and that the risks are broadly
balanced. This assessment of the risks to price stability is inconsistent: the
need for revision, which the ECB sees on the growth side, implies a continuous and
marked widening of the demand gap, presumably over the entire projection period
until the end of 2010. This means pressure on prices, especially if there is
increasing excess supply worldwide. Therefore the inflation forecast for 2010
would have to be reduced.
the more so, since the December inflation projection was based on much higher
oil prices i.e. $67 in 2009 and $77 in 2010 â€“ at an exchange rate of 1.27. Oil
market futures prices are currently about $15 lower for both years. All in all,
the ECBâ€™s December inflation projection with an average of 1.8%, is now just as
invalid as the growth projection. But apparently the ECB is still loath to
acknowledge downside risks to price stability, i.e. deflation risks, and to
take the monetary policy consequences.
Rieke +49 69 718-4114
Grabbe / Klaus NÃ¤fken
report has been prepared by BHF-BANK Aktiengesellschaft on behalf of itself and
its affiliated companies (together "BHF-BANK Group") solely for the
information of its clients. The information and opinions in this document are
based on sources believed to be reliable and acting in good faith, but no
representation or warranty, express or implied, is made by any member of the
BHF-BANK Group as to their accuracy, completeness or correctness. Opinions and
recommendations are given in good faith but without legal responsibility and
are subject to change without notice. The information does not constitute
advice or personal recommendation, for which the duty of suitability would be
owed, but may facilitate your own investment decision. Moreover, you should
seek your own advice as to the suitability of an investment matter mentioned
herein. Investors are reminded that the price of securities and the income from
them can go down as well as up and that the past performance of an investment
or a market is not necessarily indicative for future results. This document is
for information purposes only. Descriptions of any company or companies or
their securities mentioned herein are not intended to be complete, and this
document is not, and should not be construed as, an offer to sell or solicitation
of any offer to buy the securities mentioned in it. BHF-BANK Group and its
officers and employees may have a long or short position or engage in
transactions in any of the securities mentioned in this document, or in any
related securities. This publication must not be distributed in the United
rights reserved. Please mention source when quoting from it.
Forex Trading News
Daily Forex Market News Forex news reports can be found on the forex research
headlines page below. Here you will find real-time forex market news reports
provided by respected contributors of currency trading information. Daily forex
market news, weekly forex research and monthly forex news features can be found
Forex News Real-time forex market news reports and features providing
other currency trading information can be accessed by clicking on any of the
headlines below. At the top of the forex blog page you will find the latest
forex trading information. Scroll down the page if you are looking for less
recent currency trading information. Scroll to the bottom of fx blog headlines
and click on the link for past reports on forex. Currency world news reports
from previous years can be found on the left sidebar under "FX Archives."
Elevate Your Trading With The Amazing Trader!
The Amazing Trader includes:
Actionable trading levels delivered to YOUR charts in real-time.
looking for your first broker or do you need of a new one? There are
more critical things to consider than you might have thought.
We were trading long before there were online brokers. Global-View
has been directly involved with the industry since its infancy. We've
seen everything and are up-to-data with recent regulatory changes.
The Global-View Forex Forum is the hub for currency trading on the web. Founded in 1996, it was the original forex forum and is still the place where forex traders around the globe come 24/7 looking for currency trading ideas, breaking forex news, fx trading rumors, fx flows and more. This is where you can find a full suite of forex trading tools, including a complete fx database, forex chart points, live currency rates, and live fx charts. In addition, there is a forex brokers directory where you can compare forex brokers. There is also a forex brokers hotline where you can ask for help choosing a forex broker that meets your individual fx trading needs. Interact on the same venue to discuss forex trading.
The forex forum is where traders come to discuss the forex market. It is one of the few places where forex traders of all levels of experience, from novice to professionals, interact on the same venue to discuss forex trading. There is also the GVI Forex, which is a private subscription service where professional and experienced currency traders meet in a private forex forum. it is like a virtual forex trading room. This is open to forex traders of all levels of experience to view but only experienced currency tradingprofessionals can post.
Currency trading charts are updated daily using the forex trading ranges posted in the Global-View forex database. You will also find technical indicators on the fx trading charts, e.g. moving averages for currencies such as the EURUSD. This is another forex trading tool provided by Global-View.com.
The forex database can be used to access high, low, close daily forex ranges for key currency pairs, such as the EURUSD, USDJPY, USDCHF, GBPUSD, USDCAD, AUD, NZD and major crosses, including EURJPY, EURGBP, EURCHF, GBPJPY, GBPCHF and CHFJPY. Data for these currency trading pairs dating back to January 1, 1999 can be downloaded to an Excel spreadsheet.
Forex chart points are in a currency trading table that includes; latest fx tradinghigh-low-close range, Bollinger Bands, Fibonacci retracement levels, daily forex pivot points support and resistance levels, average daily forex range, MACD for the different currency trading pairs. You can look on the forex forum for updates when one of the fx trading tools is updated.
Global-View also offers a full fx trading chart gallery that includes fx pairs, such as the EURUSD, commodities, stocks and bonds. In a fx trading world where markets are integrated, the chart gallery is a valuable trading tool. Look for updates on the Forex Forum when the chart gallery is updated.
Global-View.com also offers a forex blog, where articles of interest for currency trading are posted throughout the day. The forex blog articles come from outside sources, including forex brokers research as well as from the professionals at Global-View.com. This forex blog includes the Daily Forex View, Market Chatter and technical forex blog updates. In additional to its real time forex forum, there are also Member Forums available for more in depth forex trading discussions.
WARNING: FOREIGN EXCHANGE TRADING AND INVESTMENT IN DERIVATIVES
CAN BE VERY SPECULATIVE AND MAY RESULT IN LOSSES AS WELL AS PROFITS. FOREIGN
EXCHANGE AND DERIVATIVES TRADING IS NOT SUITABLE FOR MANY MEMBERS OF THE
PUBLIC AND ONLY RISK CAPITAL SHOULD BE APPLIED. THE WEBSITE DOES NOT TAKE
INTO ACCOUNT SPECIAL INVESTMENT GOALS, THE FINANCIAL SITUATION OR SPECIFIC
REQUIREMENTS OF INDIVIDUAL USERS. YOU SHOULD CAREFULLY CONSIDER YOUR FINANCIAL
SITUATION AND CONSULT YOUR FINANCIAL ADVISORS AS TO THE SUITABILITY TO YOUR
SITUATION PRIOR TO MAKING ANY INVESTMENT OR ENTERING INTO ANY TRANSACTIONS.