Tuesday January 23, 2007 - 10:56:18 GMT
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Black Swan Capital - www.blackswantrading.com
â€˘ The US economy last year recorded its lowest rate of labour productivity growth in more than a decade, with growth in output per hour worked falling behind the EU and Japan. The fall casts further doubt on the ability of the Federal Reserve to cut interest rates as the US economy slows. (FT)
â€˘ China will cut export tax rebates on low-margin steel products to ease mounting trade friction but it will not reduce payments on high value items as it wants to climb the steel value chain, analysts said. (AFX)
â€˘ Key Reports (WSJ):
7:45a.m. ICSC Store Sales Index For Jan 20. Previous: Unch.
8:55a.m. Redbook Retail Sales Index. For Jan 23. Previous: +1.5%.
10:00a.m.Conference Board Consumer Confidence Index. Exp: +0.3%. Prev: +0.1%.
10:00a.m. Jan Richmond Fed Mfg Business Index. Previous: -6.
5:00p.m. ABC/Wash Post Consumer Conf. For Jan 21. Previous: -2.
Dueling views on goldâ€¦and the buck:
â€śThere's a tsunami of cash hitting the market and we're moving to a new realm of crowd psychology. What matters now is what the hedge funds are doing, or the pension funds, who are adding all the time. The central banks of countries like Russia, China and Vietnam, are looking for alternatives to the dollar and are gradually buying gold."
Ross Norman, director of TheBullionDesk.com
"Our house view is that the long US dollar bear market will end in 2007; and we believe that the latter stages of the commodities bull market constituted a bubble, which is in the process of deflating,"
Stephen Briggs, metals strategist at SociĂ©tĂ© GĂ©nĂ©rale
FX Trading â€“ Turning?
Cyclically, the dollar outlook has improved dramatically, given the forecasts (including ours) heading into the new year. But, shouldnâ€™t we have seen move from the buck given the type of â€śperceivedâ€ť turnaround in the U.S. economic growth forecasts to the plus-side? Is the weight of the ubiquitous â€śstructuralâ€ť dollar concerns shifting sentiment despite U.S. economics i.e. Chinaâ€™s continued musings about changing the way it deals with reserves, euro-denominated bond market growth relative to dollars, the push offshore from more and more U.S.-based investors, petro-dollar types buying fewer U.S. assets, etc.?
The pound and Aussie, of the majors are doing quite well against the buck. The low yielders, yen and Swiss are very weak. And the Loonie continues to trade with crude, looking past anything good in Canada and proving once again why they call it the Loonie.
But euro looks like itâ€™s trying to turnâ€¦
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