Wednesday February 7, 2007 - 10:28:29 GMT
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Black Swan Capital - www.blackswantrading.com
Dithering into G-7...
â€˘ U.S. Treasury Secretary Henry Paulson repeated on Tuesday that he considered the value of Japan's yen currency was fairly set and indicated he will make that point to disgruntled European colleagues this week. (Reuters)
â€˘ Despite the recent weakening of the Hong Kong dollar caused by arbitrage, the peg with the US dollar can run smoothly without Hong Kong Monetary Authority intervention, Bank of China Hong Kong has said. (The Standard)
â€˘ Key Reports Due (WSJ):
7:45a.m. MBA Refinancing Index. Previous: +4.9%.
8:30a.m. 4Q Non-Farm Labor Productivity, prelim. Expected: +1.5%. Previous: +0.2%.
8:30a.m. 4Q Unit Labor Costs, prelim. Expected: +2.0%. Previous: +2.3%.
3:00p.m. Dec Consumer Credit. Expected: +$6.7B. Previous: +$12.3B.
"Pictures can deceive as well as instruct. The brain highlights what it imagines as patterns; it disregards contradictory information. Human nature yearns to see order and hierarchy in the world. It will invent it where it cannot find it."
FX Trading â€“ Dithering into G-7â€¦
Expectations run high for some and are being doused by others for some communiquĂ© from the G-7 that mentions FX, specifically Japan and Chinaâ€™s.
A lot has been made of Treasury Secretary H Paulsonâ€™s rather public split with European Council President J-C Juncker on Japan as a culprit in the currency depreciation wars. But if you were Paulson, wouldnâ€™t you want a little bargaining chip for the meeting if your main target was bigger fishâ€”China?
Reports this morning that Japan may level a WTO complaint againstâ€¦drum roll pleaseâ€¦â€¦â€¦â€¦â€¦â€¦â€¦if you guessed China you are correct-a-mundo! Hmmmmâ€¦.the yen is weakening this morningâ€”can you say â€śQuid pro quo?â€ť Sureâ€¦I knew you could.
But it wontâ€™ likely be that simple. Five of the Gâ€™s, and maybe six, arenâ€™t all too happy with a super competitive yen crushing exports and grabbing market share in its path. So we dither until we find out if 6 of the Gâ€™s can get their story straight. What a shock it would be if nothing was accomplished at a G-7 finance ministers meeting.
DXC Chart...23-days ranging...so far
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