07.03.08 Survey

07.03.08 Survey

The assault on the dollar continued received in the past Thursday ...

The assault on the dollar continued received in the past Thursday. This motives for the sale of American currency speculators have been few. First, continue to be high expectations or better, fears that went to the United States on Friday February report on employment (Nonfarm payrolls) will be worse than expectations, pointing out that the recession in the world's largest economy, perhaps already started.

Secondly, attention should be given to the results of the last meeting of the Bank of England and the European Central Bank.

In both cases, we can once again make sure that no Mervyn King, or Jean-Claude Trichet is not in a state of panic and an equally aggressive lowering of interest rates as the Fed is likely in the near future will not. And third, comments Governing FedRezerva could still undermine the dollar on FOREX. Thus, the Fed from Geithner said on Thursday that the Central Bank would be obliged to retain the interest rates at a low level at least until the situation in the financial markets do not improve. This, incidentally, confirms that the Fed may soon lower the bid to 0.75%. Overall, it is possible once again to note that the dollar was still in force sinker long-term trend.

With regard to the employment report, which will be released in the United States on Friday at 16:30 Moscow time, then, in my opinion, should not be overestimated its possible impact on the currency market and the dollar. So far, in general, the labour market in the United States is not very bad shape, pointing rather to a temporary economic downturn than at the beginning of the recession. On the other hand, if during the few months we will see a stable output indicator Nonfarm payrolls in the negative area, that is sustainable in the forthcoming reduction in the number of jobs and the economy will lose approximately 300k-500k, then it will be possible to conclude that the worst times really began .

Relatively speaking Friday following data:
Investors fear that Nonfarm payrolls will be below 0k (25k/30k forecast), which actually may be, to some extent, already been taken into account in exchange rates, that is, the decline in employment in the United States by the amount of no more than 30k market can move without great losses; on the other hand exit-level indicator on the 100k will mean even greater drop in the American stock market, curtailing carry trade positions and the reduction of the dollar;
employment sub-index within the ISM manufacturing fell in February, but a similar component in the ISM services index (service accounts for the lion's share of the U.S. economy), on the other hand, improved;
recruiting report from ADP pointed to the decline in employment in the region last month, the expected growth;
Number of primary application for unemployment benefits (Jobless claims) in the last 4-5 weeks has been on quite such a high-level (above 350k, 400k will be higher - the recession started), which itself can be seen as an argument in favour of that record 7 March will be worse than expectations.

In general, if summed up, I would have waited statistics on Friday worse analysts forecasts, in particular, the Nonfarm payrolls at 0k or negative area. In this new position on the sale of the dollar, I would not hurry to open, given his pereprodannost. I note that the expectations of better times can be as a valid reason for the correction to the recent growth pair EUR / USD, as well as lead to the restoration of no interest in the carry trade, the latter could well play.

The ECB on Thursday left interest rates without change at the level of 4%, unchanged in principle and remained communique, with the attendant press conference introduced Jean-Claude Trichet. Suffice it to say that a priority for the Central Bank continues to be the fight against inflation, rather than the problems of economic growth. Combined with the fact that FedRezerv, eager to stimulate economic growth in favour of the weak dollar, it comes as no surprise that the pair EUR / USD to the outcome of Thursday shows growth to 1.5380 from 1.5265. In cross-rates, we may also see quite such a significant strengthening of the position of the single European currency. And so it would seem, until the trend in the market with rising oil does not change to the descending or in the Eurozone would not begin wing economic problems.

This feeling that the investor environment did have some concerns that the Bank of England may move to reduce the interest rate under the regular meeting. So when this did not happen, we have seen quite such a large purchase in a pair GBP / USD, where open positions for the purchase of several easier psychologically than the EUR / USD. Strong closure on GBP / USD trading day on the outcome of the week above 1.9900 / 1.9950 may be true signal that we left 1,94-1,99 price range and direction to the area now rezistansa 2.04, which can be made in spring, when a pair EUR / USD goes to 1.55.

Adding that, following Thursday pair GBP / USD adds about 200 points, showing an increase from 1.99 to 2.01.

Discharge of risk assets, as "disservice" trend in the American stock market continues, that could mean an even greater growth rate of the Japanese yen and the Swiss franc in cross XXX / JPY and XXX / CHF. If we talk about the causes and factors that led to a further attack risk aversion, it can be safely on Thursday to allocate the following:
judging by the rumours, UBS and Citigroup eve in a hurry to sell their portfolios of mortgage bonds Fannie Mae and Freddie Mac;
Carlyle Capital Investment Fund has received margin-call on a number of its commitments and positions in the market - just remember, as the summer of 2007 caused such messages;
Thornburg Mortgage Mortgage Company is on the verge of bankruptcy and there is no buyer for its assets;
the money went again - jumped Libor rates.
Overall, the S & P500 in the coming months, I also do not support the reduction in district 1300 points. With regard to the January renewal minima, as we wrote earlier, it almost happened in the U.S. stock market.

Save risky assets again can only report on employment in the United States is better expectations this Friday. The purpose of USD / JPY 100/101, 5. While the Bank of Japan begins to "shout" in the market that such a strong yen strengthening of the position he was not satisfied, little has changed in FOREX against Asian currencies.