[U]
[B]Fundamental Headlines[/B][/U]
• [B]USDJPY [/B]– The Eco Watchers Index, which measures merchant sentiment, slightly increased to 33.6 from it’s six year low of 31.8. As rising energy and food costs weigh on consumer sentiment and sap their spending power, expectations are increasing that a BoJ rate cut is in store by year’s end. However, Machine Tools orders jumped 19.6% in January - its fastest pace in seven years - supporting the BoJ’s case that the economy will continue expanding on strong Chinese demand. For more news and resources please visit our Japanese Yen Currency Room.
• [B]GBPUSD [/B]– Record Oil prices have led to U.K. manufacturers passing on costs at the fastest annual pace since 1991. Producer prices increased 19.4% from a year ago raising concerns that inflation may exceed the BoE’s 3% tolerance level. Additionally, industrial production decreased by 0.1% from December, led by decreases in textiles, food, drink & tobacco. This will only complicate future monetary rate decisions as the central bank weighs softening the landing of their declining economy against rising inflation. Discuss the topic and your trade ideas in the GBP/USD Forum.
• [B]EURUSD [/B]– Despite a strong Euro, Germany and France saw unexpected increases in exports. The German surplus grew to 17.1B versus expectations of 15.3B, while France saw its deficit decrease to 3.4B from 3.9B. Increasing demand from developing nations China and Russia are offsetting the slowing U.S. economy. This was evident as French industrial production expected to remain flat rose 0.5%. As the European fundamental data continues to be surprisingly stronger, the chances of future rate cuts by the ECB are diminishing. Discuss the topic and your trade ideas in the EUR/USD Forum.
• [I]Mall. Offices May Slump Less Steeply Than Homes[/I] (link) – Wall Street Journal
• [I] Crude Awakening:, Analysts Adjust [/I] (link)– Wall Street Journal
• [I]Carlyle Capital Seeks Standstill Pact /I – Financial Times
• [I]Hedge funds Reel From Margin Calls Even On Treasuries[/I] (link) – Bloomberg
• [I]TIPS’ Yield Show Fed Has Lost Control Of Inflation[/I] (link) – Bloomberg
