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FX Day Trading - 5 Mar 2010
Greek Government Sells Bonds
ECB Washes its Hands of Greece
US Non-Farm Payrolls Today
On the eve of the Oscars it emerges that one producer, Nicolas Chartier, will not be allowed to attend the ceremony.
He circulated an email to Academy members maligning 'Avatar' and plugging his own film, 'The Hurt Locker'. It was against the rules, which stipulate that any such back-biting and bitchiness be confined to cocktail parties.
As a Frenchman M Chartier cannot be blamed for operating by European standards, which encourage insults on a continental scale. In Berlin, for example, two senior MPs have raised the temperature of Greco-German relations with a suggestion 'that Greece sell off some of its islands, historic buildings and art works as a condition of receiving a financial lifeline from the EU' (The Guardian).
Okay, the gold ought to have been enough, but there is merit in the suggestion. Maybe Gordon Brown should take note; the Elgin Marbles must be worth a few bob.
As for Britain's buildings, historic or otherwise, there is general agreement that they are worth a little less than they were a month ago.
Nationwide (-1.0%) and Lloyds (-1.5%) both saw house prices falling in February, even if they are still up by around 8% from the lows of a year ago. The Halifax figure was the only UK statistic yesterday.
Coming a day after the unusually strong services PMI and just three hours ahead of the Bank of England's policy announcement it did not attract sufficient attention to change investors' minds about the pound.
Nor, for that matter, did the Monetary Policy Committee's decision. The Bank Rate will be 0.5% for a 13th month and quantitative easing remains on hold. With identical wording to that of a month ago, the bald statement offered no clues.
In Frankfurt the European Central Bank was more forthcoming. Jean-Claude Trichet said that whilst it would continue to lend one-week money to commercial banks at 1% for at least another seven months, three-month operations will be going back to a variable rate in April.
In other words the ECB is tightening policy despite the situation in Greece.
M Trichet held out no olive branch to the Athens government, saying that he would oppose any attempt to approach the IMF for assistance and that the matter of financial aid was up the EU, not the ECB.
The euro sagged slightly on M Trichet's hard line but gained support from news that Greece had managed to find buyers for a €5 billion bond issue. If it can manage to shift another €20 billion in the next few weeks the euro will breathe a huge sigh of relief.
Thursday's statistics brought a couple of surprises but failed to get currencies moving.
Canada's Ivey purchasing managers' index was a disappointment at 51.9. Although it was a point higher on the month is was three short of what the analysts had predicted.
In the States there was another shock for the residential property market with a -7.6% monthly fall in pending home sales.
Otherwise the data ran according to form with confirmation of +0.1% growth for Euroland GDP in the fourth quarter and a +1.7% lift in US factory orders.
It being the first Friday of the month, US non-farm payrolls should be the dominant feature.
The pundits agree that the unemployment rate will be higher but they are vague about the change in payrolls, with consensus forecasts anywhere between -50k and -65k.
Investors will probably be more interested in the meetings between Chancellor Merkel and Prime Minister Papandreou and between Gordon Brown and the Chilcot inquiry than they will about US payrolls.
However, tradition will demand a reaction if the forecasts turn out to be wrong. Have a good weekend.
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'FX Day Trading 5 Mar 2010', Article by Moneycorp, last update: 5-Mar-10
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