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FX Day Trading - 4 Mar 2010
Quantitative Easing - The Latest
BoE and ECB policy decisions today
Will Germany help Greece?
The long tail of the recession still hobbles the air transport industry, affecting different players in different ways.
Air traffic control at New York's JFK has had to resort to pre-teen trainees giving takeoff clearance to passenger flights.
British Airways is training up an army of volunteer flight attendants to keep the airline flying when cabin crew begin their strike.
Turkish airline Corendon has had one of its pilots arrested for forging his air transport pilot's licence.
But in the toughest position of all is bankrupt JAL. The company is trying desperately to prevent redundant stewardesses selling their uniforms on the black market. Every Miss Whiplash in Japan wants one and the unsatisfied demand has pushed a uniform's street value as high at ¥200k.
At the beginning of the year ¥200k would have been £1,300. Ten days ago it would have been £1,400. Today it is £1,500.
Given the international scale of Britain's service sector, this trend will have had some bearing on yesterday's impressive purchasing managers' index. At 58.4 the services PMI was more than three points better than predicted, scoring a three-year high. It blew America's 53.0 and Euroland's 51.8 into the weeds.
Coming hard on the heels of a ten-point jump in consumer confidence it also persuaded investors that not everything to do with Britain was a crock. The Pound-Dollar spread added 0.5¢ and the pound picked up a couple more cents against each of the two antipodean dollars.
Sterling is unchanged against the euro because it, too, found a little extra support as a result of developments in Athens.
Despite fierce resistance from public sector workers and pensioners, Prime Minister George Papandreou is pushing ahead with an 'austerity' package of budgetary reforms.
With a mixture of higher secondary taxes (there is no point is raising direct taxes in a country populated by Michael Ashcroftopoloses) and lower guaranteed bonuses for public servants Mr Papandreou hopes to raise €4.8 billion and to pave the way for EU financial assistance.
Things might have gone even better for the euro had it not been for the German Chancellor's dismissive comments about tomorrow's meeting between the prime minister and herself. Frau Merkel told reporters that the summit would not be about aid commitments. The market was left to wonder what the two would talk about, if not aid. Yoghurt perhaps? A holiday apartment?
But what concerns investors this morning is the press conference following the European Central Bank' Governing Council policy meeting.
It is difficult to imagine Jean-Claude Trichet getting through his conference without mentioning the Greek Problem. What Greece very much does not need at the moment is higher interest rates. At the same time the ECB must pay attention to the future course of euro zone inflation and that, in time, implies higher interest rates.
Will the ECB make allowance for the specific problems of Greece and delay its tightening or will it forge ahead regardless? Some journalist is bound to ask that question of Trichet today.
The questions they will be asking of the Bank of England's Monetary Policy Committee (at least they would if they could) relate to the shall-we-shan't-we future of quantitative easing.
Another unanimous decision to stick at £200 billion would in theory be positive for the pound while anything less than an 8-1 vote would probably be unhelpful.
There are no UK data due for release today and only the updated fourth quarter GDP figure from the euro zone.
Canada's Ivey purchasing managers' index, a composite of all business sectors, is expected to rise by four points.
From the States come January's factory orders and pending home sales. US weekly jobless claims have been such a hopeless guide to non-farm payrolls recently that they ought to be irrelevant. That may not prevent die-hard traditionalists trying to make something out of them.
But it looks as though today's action will centre on the ECB and the MPC. Neither the Euro nor the Pound will be able to relax until those two are out of the way.
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'FX Day Trading 4 Mar 2010', Article by Moneycorp, last update: 4-Mar-10
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