jump to navigation

Back to Gloom 03/03/2009

Posted by chrisdshaw in Uncategorized.
trackback

Following this morning’s post the markets have resumed their downward trajectory after the all too brief respite in Asia and early morning trading in Europe. Equity markets in Europe have continued to decline: the FTSE 100 closing down 3.14%,DAX closing 0.52% down. In the Foreign Exchange market the USD has regained strength, reaching a 2006 high against the currencies of its six main trading partners, following Bernanke’s comments that the financial system isn’t yet stabilised reduced risk appetite and a flight to safety. In particular, EURUSD is back to near its 1.2515 January 19 lows. The pair looks vulnerable, given the event risk of surrounding the ECB’s rate decision later in the week. The same applies to Cable, which has been trading in a narrow range- just above the key resistance level of 1.40. Given the lack of decisive break yesterday, I would expect any decisive break to occur below the 1.3940 level, also a possibility given the imminent BOE rate decision. The RBA’s completely unexpected decision to keep  its cash rate at 3.25% demonstrates bank rate decisions are not a one way bet. 

One crumb of comfort to gain from today was the positive, or should it be lack of, response to Time Geithner’s call to the House Ways and Means Committee that the efforts to stabilize the financial system “might cost more”. The Treasury Secretary’s performance in recent weeks has not been surefooted or consistent. Today’s performance has calmed some nerves.

Comments»

No comments yet — be the first.

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s

%d bloggers like this: