Financial News and Economical Crisis

USD

Yesterday only reinforced the position of the dollar, forcing the euro to go below the 1.40, although not for long, but still … Naturally,the main catalyst was the outcome of the FOMC meeting on rates. Here, as we expected, his role was the fact that the Committee decided to ignore the recent weak data on the labor market and consumer sector. Fed left rates unchanged and promised to keep it low for a long time to stimulate economic growth, which is constrained by high unemployment. Covering statement reflected some increase in sentiment compared with the December, although the central bank at that time did not mention the stabilization of the housing market. The decision was taken a vote of 9-1, as the head of the FBI Kansas City, Thomas Hoenig was for having to remove the phrase “extended period of time.” That”s what prompted such a reaction to the market. The logic is simple: if there is one person, you have entered for the transition to tighten, there will be found and his followers. Generally, this rather optimistic tone accompanying the statement (ignoring the recent weak economic data) is very convenient for Bernanke in anticipation of its approval for a second term. However, if rates will continue to talk about the slowdown, it could undermine the reputation Fedrezerva.

Not all data received yesterday, proved to be so optimistic. Last week, the number of Americans who filed applications for mortgages fell for the first time this month. Index MBA mortgage applications fell by 11% to 513 against 575.9 a week earlier. The volume of refinancing fell by 15%, while the number of purchases fell by 3.3%. In addition, unexpectedly fell in December, new home sales in the United States. This was proof that the effect of the Government”s tax breaks for buyers of the first extinct and no longer stimulates demand. Purchases declined by 7,6% to 342 thousand, the minimum rate since March.

Today, the focus will be data on the number of requests for benefits b /d, and the number of orders for durable goods. According to forecasts, and both figure to be stronger than in previous periods. If expectations are not confirmed, it could put pressure on the U.S. currency: after an optimistic report Fedrezerva frustration can be much stronger. In today”s calendar, there is another risk factor: Obama”s speech to Congress a report on the situation of the United States. Pay attention to the tone of speech and characterization of the economic situation in the country.

EUR

As we mentioned above, the euro yesterday for some time had gone below the level of support 1.40. Despite the fact that now is traded for higher grades, but the precedent is created and is now the probability of penetration is high. With regard to economic data published yesterday, everything here is not so bad. The confidence of French consumers in January showed growth from December”s levels, as households responded to the improvement of housing conditions. Index CPI in Germany fell by 0.6% in January, and HICP - by 0,7%, annualized CPI rose by 0.8% and HICP - by 0,7%.

This pattern suggests that the ECB has to relax and not rush to move in tightening mode. Nevertheless, as stated yesterday, the ECB board member Axel Weber in the first half of this year, the central bank may continue to take steps to cuts in programs of infusion of liquidity into the banking system against the backdrop of improving economic health. Such a declaration could serve as a mainstay of the euro, if it is supported and other representatives of the Central Bank. Today the order of the data on the labor market in Germany, as well as a study of consumer and business confidence in the eurozone. The negative in this area can only increase pressure on the single currency.

GBP

Briton once again moving against the general trend, have managed to strengthen against the dollar. This pattern was supported by an aggressive speech of the representative of the Bank of England Sentensa. Member of the Monetary Policy Committee advises the Central Bank to prepare for the change in policy direction on the background of strengthening economic recovery and inflation, demonstrating growth due to the weakening pound. Recall that in December, inflation rose by 1% to 2,9%. Price pressures have intensified amid falling pound by 17% since 2007. Next week the Bank of England has to decide whether it is time to end the program for buying bonds.

When such statements pound hardly reacted to the rather weak data on retail sector. UK retail sales fell in January, as cold weather, coupled with an increase in VAT reduced consumer demand. Confederation of British Industry (CBI) reported that the monthly balances in January fell to -8 mark of 13 in December. Today”s calendar is empty, which means that the pound will move under the influence of technical factors and data from the U.S., and it poses the likelihood of abating.

JPY

USD /JPY has deployed direction and could strengthen slightly in response to the accompanying statement FOMC. Subject risks receded, and the Japanese currency once again came under pressure due to this factor. In addition, economic data also did not veyali optimism. Japanese retail sales fell by 0,3% in December against the previous year. These data, unadjusted for inflation, were weaker than forecasts of analysts, who expected to fall by 0,1%. The December decline was the 16-m drop in a row, in November, a revised decline was -1,1%.

The only “fly in the ointment” in a news background - the negative data on sales of durable goods
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