: BCE recognizes the risks, forecasts over the Inflation target

14 June 2012 08: 30 GMT the takeaway: ECB acknowledges the downside risk and appears to be higher that the inflation target-> Merkel to the G20 Summit to call for debt - cutting-> Euro trading slightly higher
The European Central Bank said that he sees risks increased in its economic Outlook, according to the monthly bulletin of the Bank. The ECB also expected that inflation will remain above its 2% target this year before falling below 2% in 2013.
Editorial of the bulletin noted economic uncertainty in the short term, saying as high adjustment of unemployment and the balance sheet could slow underlying growth dynamics. The ECB decided to keep interest rates unchanged after its last meeting, but the risk of inconvenience could lead to a reduction in the future.
The Bank expects a GDP growth of 0.3% to 0.5% for 2012 and 2013 GDP could grow anywhere from 0% to 2%, explains.
Earlier today, German Chancellor Angela Merkel said that cutting debt must be part of any plan of action created by the Summit of the g-20 meeting next week. Angela Merkel has said the German Parliament that the Summit will focus on the crisis in the Euro area and firmly declared that Europe is future and destiny of the Germany, it added that the strength of his country to cope with the current crisis is not unlimited. Angela Merkel also stated that the recovery will be slow and debt-fueled growth must be combated.
Yesterday, Moody cut the debt Spain rating of A3 to Baa3 following the assistance of Spain plan. The rating did not significantly affect currency or bond markets, as the Euro has had a small rise yesterday against the US Dollar and yields of 10 bonds Spanish years had prices in the poorly received the debt market and reached new heights of 6.83%.

EUR/USD did not react strongly the ECB report and is only slightly higher than open today.
DailyFX provides news forex and technical analysis on trends affecting the world market currencies.
Learn forex trading with a free account of practice and exchange of graphics of FXCM.
14 June 2012 08: 30 GMT Jun, 14: 15: 09 GMT Robust financial system Canadian but very sensitive to the Euro CrisisJun, 14 13: 05 GMT US Dollar dips against Euro, Yen, after the first trimester, current account, can CPIJun, 14 09: 18 GMT may euro area Inflation was as expected, slightly SofterJun, 14 07: 47 GMT SNB maintains 1.2000 EURCHF floor, will "not tolerate" stronger FrancJun13 21: 56 GMT NZD/USD: RBNZ has OCR rate 2.50%, the Kiwi continues its rise

-> Economic recovery of Japan Blasts past peers as Q1 GDP tops forecasts

Is little more than a year after the devastating earthquake and tsunami that decimated a good part of Japan and its economy, but more recent data suggests a remedy whose-half the resilience and the commitment of the Government of Japan. Recent figures show that Japan's economy far ahead of call-in capture of industrial services, including USA, UK, Germany.
According to the Japanese Cabinet Office, Japan's economy grew in the first quarter, with Gdp mentioned in 4.1% annualized, well above the revised increase of 0.1% in the previous quarter and analysts ' expectations for an increase of 3.5%. In a fourth quarter-in basis, the figures are consistent, 1.0% increase from 0.0% in the previous quarter and slightly besting predictions of 0,9%. According to the report, the better than expected numbers was the result of a combination of factors including increased exports, domestic consumption and public investment in infrastructure reconstruction.
As of this writing, the pair USD/JPY is higher in 80.4620, the EUR/JPY is flat on the 102.1705 and the USD/JPY is higher at 79.7856. OpenBook trader from mencke to Germany has recently closed many professions Yen-crossed with various degrees of profit, a position long USD/JPY which closes with a 23,7% profit, while a long EUR/JPY where a trader with a profit of 22.4% in USD/JPY long who eked out a profit of 0.24%. The trader only has negotiated to OpenBook for about a month, but we can already see some laudable gains on Yen-with crossed lines for the month, the distribution of 4,6% of the pair USD/JPY has provided the trader with a profit of 26.9%, while the allocation of 7% to EUR/USD gave the dealer a return of 10.5%.
OpenBook guru Noe017 from France also had some good success with the Japanese yen, trading during the last quarter, the allocation of 4.8% for the pair USD/JPY gave 5,4% return, while a breakdown by 10,9% EUR/JPY has given a profit of 1.9% over the same period. An open short EUR/JPY close to dead, and a short position in the pair ended recently with a profit of 10.63%. Guru has 234 copiers and 2,493 followers as of writing this and the quarterly P/L is 54.7% and in 6 months is 101.2%.
It also shows improvement for the month of March was industrial production improved 14.2% by 13.9% (revised from 1,5%) on an annual basis. Based on a month to month, the Japanese Ministry of economy, trade and industry reports to 1,3% increase from a revised 1,0%, compared with expectations of 1,1%.
The Bank of Japan said that it is determined to maintain the Japanese Yen value oppressed despite the insurgence of funds safe haven after the eurozone's debt crisis. Despite the improvement in key points of data, the latest news is not likely to change position of the Bank in any way, but in fact might even stronger determination. Analysts believe that growth in Japan is likely to be modest, given the situation in the eurozone crisis and slowdown of the Chinese economy, which will weigh on Japan's exports.

$$$ Dollar: Fed Forecasts and 1Q GDP Promising Breakout Catalysts

Dollar: Fed Forecasts and 1Q GDP Promising Breakout Catalysts British Pound will Put Modest Hawkish Upgrade to the Growth Test Australian Dollar Traders Have a Clear Expectation for Tuesday’s CPI New Zealand Dollar Measured its Reaction to Inflation, How About the RBNZ? Euro Traders Should Watch French Election, IMF Response and Crisis Headlines Japanese Yen Not Seen as a High-Level Volatility Risk, Good Setup for the BoJ Gold May Finally Find Impetus in Rate Decisions, Inflation and Growth Readings Dollar: Fed Forecasts and 1Q GDP Promising Breakout Catalysts

With the dollar’s close this past Friday, it managed to carve out a weekly range that fit neatly within the breadth of the previous period, which in turn fit within its predecessor. In other words, the greenback has worked itself into significant congestion – the perfect setup for heavy event risk in a FOMC rate decision and US GDP reading to force a critical breakout. To assess the situation heading into this loaded week of trading, we first must understand the greenback’s stubborn congestion as of late. The lack of drive through risk trends is the most prominent disconnect. As long as the S&P 500 (as a benchmark for sentiment) is set adrift, a strong bull or bear run will be difficult to generate for the premier safe haven. A further complexity that has ensured the dollar can’t build any steam is the diminished premium of the subtle shift in rate expectations.

It is the recently deflated outlook for the an early exit to the Fed’s excessive stimulus regime that where we likely find the greatest potential for a meaningful change in the dollar’s tone – and possibly even in the character of underlying risk trend. Wednesday afternoon, the central bank is schedule announce the decision after its two day monetary policy deliberation. There is little doubt that the central bank will hold both rates and balance sheet unchanged. The real interest is in the updated forecasts for fund rates, growth and inflation that are also due, as well as Chairman Ben Bernanke’s press conference to follow. We have oscillated from a consensus for QE3 from the market ranks to a tentative outlook for a 2013 rate hike (insinuating a withdrawal of stimulus), but currently the views are more finely balanced. This could break that stalemate.

An outlook for accommodative policy for the foreseeable future or one of the most massive policy programs being worked down has direct implication for the currency, but it also directly taps into underlying risk appetite. Securing a clear break from equities is likely a requirement for the dollar itself to pick up a lasting drive, but so far 1Q earnings has proven unable. Perhaps everyone is waiting for Apple’s figures. If that isn’t the case, perhaps the advance reading of 1Q GDP can deliver. Though due Friday, it may be more impediment than catalyst.

British Pound will Put Modest Hawkish Upgrade to the Growth Test

After the Bank of England minutes tipped the scales away from expectations of another round of bond purchases come May, the sterling took to a notable climb. Yet, as we have seen with many currencies in similar positions, removing the burden of dovish policy does not necessarily translate into a hawkish regime. For that, we need an active catalyst to encourage appreciate. We won’t be seeing any hawkish/bullish favor on the monetary policy side of things, so perhaps the pound can compete on the fiscal/growth side. The UK took a gamble by proactively pursuing deficit reduction, and there have always been detractors to the effort. Depending on the 1Q GDP reading, policy approaches could be changed.

Australian Dollar Traders Have a Clear Expectation for Tuesday’s CPI

After the previous Reserve Bank of Australian (RBA) rate decision, Governor Glenn Stevens suggested to the markets that the probably for dovish action at the following (May) policy meeting was high; but an actual cut would depend on the state of inflation. The market has taken that to mean a cut for sure, but such a clear bias leaves the door wide open for surprise. To be sure, the sizable drop in the year-over-year, headline CPI figures (from 3.1 percent to 2.2 percent) would justify the 95 percent probability of a 25bp May rate cut, but does it clear the way for the 94 bps of cumulative cuts over the coming 12 months. Even if the market deftly prices in the next move, there is still wider berth further on.

New Zealand Dollar Measured its Reaction to Inflation, How About the RBNZ?

There is little chance of a change in policy from the exceptionally consistent RBNZ policy path according to the markets. That said, we are working with markets that are far more adept at working with the subtleties of the changes in expectation further out in the future. Looking at the adjustment error-size 5 percent probability of a rate cut and collective 9 bps of hikes seen over the coming year, it is clear that expectations are set to neutral. Yet, we’ve just recently seen a very weak CPI reading from New Zealand and China reported a significant slowdown in growth (an issue for all of Asia). Will Governor Bollard adjust for these developments? It’s a possibility that the market isn’t well positioned for.

Euro Traders Should Watch French Election, IMF Response and Crisis Headlines

Fears of financial crisis are starting to fade, though only in the financial headlines. If we look at the sovereign rates, we find clear trouble in the health of Spain certainly, but also Italy, Greece and Portugal. Notable through this past week, Spanish and Italian 10-year rates closed in on the six-percent market (the seven percent threshold is seen as the bailout mark); Greece’s four largest banks reported record losses on the order of €24 billion; and Portugal said it would not ask for lenient conditions similar to those for Greece. Clearly, there are still issues. However, we need action...catalysts. First stop is the French election, though that will likely just introduce a May 6 vote. We also have a notable round of data.

Japanese Yen Not Seen as a High-Level Volatility Risk, Good Setup for the BoJ

Another fundamental event that is flying under many traders radars (not surprising when advance quarterly GDP readings and contentious monetary policy decisions are vying for our attention) is the upcoming BoJ policy decision. At the last meeting, there was heavy speculation that the central bank would fold to government pressure and follow up with its February expansion of its asset purchase program hoping to exert the same force on the Japanese yen. The disappointment was clear when the group refused. This time around, there is little expectation for the same. Yet, if they deliver, that means many market participants will be caught off guard. That said, can such a move rouse the same reaction?

Gold May Finally Find Impetus in Rate Decisions, Inflation and Growth Readings

Whether we look at the daily or weekly chart, the constraint on gold is clear. The fresh, nine-month low from the CBOE’s gold ETF volatility index (16.7 percent) perhaps summarizes the situation best: that market conditions are too quiet. That is an interesting position to be in when the question of stimulus (and therefore the demand for an alternative store of wealth to traditional fiat currencies) comes up multiple times over the coming week. Volatility of course is a consideration, but the real concern is direction. A bearish move could crack a multi-year bull trend.

For Real Time Forex News, visit: http://www.dailyfx.com/real_time_news/

**For a full list of upcoming event risk and past releases, go to www.dailyfx.com/calendar

ECONOMIC DATA

Next 24 Hours

Producer Price Index (QoQ) (1Q)

Producer prices may indicate lower CPI this coming week

Producer Price Index (YoY) (1Q)

Japanese economy still stable, growing moderately

Following convenience store data

French Own-Company Production Outlook (APR)

French surveys still trending weaker as debt fears cut into investment spending

French Production Outlook Indicator (APR)

French Business Confidence Indicator (APR)

Real Estate Index Family Homes (1Q)

French PMI Manufacturing (APR P)

Purchasing indices may be stagnant, will await further developments

German PMI Manufacturing (APR A)

Eurozone PMI Composite (APR A)

Eurozone PMI Manufacturing (APR A)

Italian Consumer Confidence Ind. Sa (APR)

Euro-Zone Govt Debt/GDP Ratio (2011)

Austerity targeting lower ratio

Corp Service Price Index (YoY) (MAR)

Bundesbank Publishes Monthly Report

SUPPORT AND RESISTANCE LEVELS

To see updated SUPPORT AND RESISTANCE LEVELS for the Majors, visit Technical Analysis Portal

To see updated PIVOT POINT LEVELS for the Majors and Crosses, visit our Pivot Point Table

CLASSIC SUPPORT AND RESISTANCE –EMERGING MARKETS 18:00 GMTSCANDIES CURRENCIES 18:00 GMT

INTRA-DAY PROBABILITY BANDS 18:00 GMT

TradeTheNews.com Asian Market Update: RBA keeps rates on hold, Weaker GDP forecasts for NZ and China

Share This Story:
(AU) RESERVE BANK OF AUSTRALIA (RBA) LEAVES CASH TARGET RATE UNCHANGED AT 4.25%, NOT EXPECTED >- (NZ) NEW ZEALAND Q4 AVERAGE HOURLY EARNINGS Q/Q: 0.0% V 0.5%E; PRIVATE WAGES EX-OVERTIME Q/Q: 0.7% V 0.5%E (3-year high); INCLUDING OVERTIME Q/Q: 0.7% V 0.5%E
- AU) AUSTRALIA JAN AIG PERFORMANCE OF CONSTRUCTION INDEX: 39.8 V 41.0 PRIOR (first decline in 4 months; 20th month of contraction)
- (IN) INDIA Q1 ADVANCED GDP ANNUALIZED Y/Y: 6.9% V 7.0%E
- (JP) JAPAN DEC PRELIMINARY LEADING INDEX: 93.8 V 93.8E; COINCIDENT: 93.2 V 93.1E
- (UK) UK JAN BRC SALES LFL Y/Y: -0.3% V -0.8%E
- (PH) PHILIPPINES JAN CONSUMER PRICE INDEX (CPI) M/M: 0.4% V 0.5%E; Y/Y: 3.9% V 4.0%E
- (KR) SOUTH KOREA JAN DEPARTMENT STORE SALES Y/Y: -4.2% V +11.0% PRIOR
- (JP) JAPAN JAN OFFICIAL RESERVE ASSETS: $1.31T V $1.30T PRIOR
- (PH) PHILIPPINES JAN FOREIGN RESERVES: $77.0B V $75.1B PRIOR
- (RU) RUSSIA JAN OFFICIAL RESERVE ASSETS: $505.4B V $505.0BE
- (ID) Indonesia Jan Foreign Reserves: $112.0B v $110.1B prior
- (ID) Indonesia Jan Net Foreign Assets (IDR): 980.8T v 965.9T prior
- (ZA) South Africa Jan Foreign Reserves: $41.7B v $39.9B prior
***Markets Snapshot (as of 05:30GMT)***
- Nikkei225 -0.4%
- S&P/ASX -0.5%
- Kospi +0.3%
- Taiwan Taiex +0.2%
- Singapore Straits Times +0.3%
- Shanghai Composite -1.9%
- Hang Seng -0.2%
- S&P Futures unchanged at 1,339
- April gold -0.1% at $1,723/oz
- March Crude -0.1% at $96.86
***Overview/Top Headlines***
- Markets were subdued across the region ahead of the key Reserve Bank of Australia rate decision. However after the RBA, in a surprise move, kept rates unchanged at 4.25% the markets tumbled, with the ASX falling 0.4%, key trading partner China saw the Shanghai Composite fall nearly 2%. The AUD/USD rose over 90 pips testing $1.08, a 6-month high. The RBA said there were reduced risks from Europe and borrowing rates had declined to levels close to medium term average. RBA also thought that the inflation outlook provided for easier policy. Markets also remained under pressure from the thorn in the side of Europe, Greece, and its inability to come to a solution; this is also counteracting stronger economic data out of the US. Adding insult to injury Greek PM Papademos and other politicians delayed a key meeting on reforms ry. Mixed earnings out of Asia-Pacific are also muddling any strong move to the upside. EUR/USD reequired by creditors adding more frustration to the situation ahead of a 24 hour strike in Greece todamained slightly weaker awaiting the outcome in Greece. USD/JPY bounced around in a tight range after the Japan MoF released Q4 intervention data which showed 5 days of intervention in Nov, spending ¥1.02T on stealth intervention with yen selling in the period. Also weighing on China shares were cautious comments from China's MIIT and IMF's projection that China GDP could be cut in half from 8.2% if the European situation got worse. Commodities were weaker across the board with heavy pressure on copper and silver.
***Speakers/Geopolitical/In the press***
- (CN) CBRC: China is not likely to liberalize 1-year deposit rates this year - China Daily
- (KR) Bank of Korea (BoK): Economy will return to a modest pace of accelerating growth in H2; Jan inflation fall mainly due to high 2011 figures
- (NZ) New Zealand Treasury: Outlook is weaker than in pre-election update; Q4 GDP likely to be 0.6% q/q vs 0.8% in Q3
- (JP) Japan Fin Min Azumi: Cannot rule out any currency options; Concerned about Greece's problems; Japan needs to strengthen its cooperation with China
- (CN) According to China Real Estate Index System 37 mainland developers each booked property sales exceeding CNY10B in 2011 v 35 companies in 2010 - HK press
- (JP) Bank of Japan (BoJ) Gov Shirakawa: Reiterates will make strong effort to combat deflation; BoJ has been supplying plenty of liquidity to the market
- (CN) China Industry Ministry: Steel industry profits in China to narrow because weaker demand and higher input costs; Still expects relatively rapid industrial output growth in 2012, but modest slowing possible
***Equities***
- Advanced Semiconductor Engineering, 2311.TW: Reports Jan consolidated Rev NT$13.6B v NT$14.9B m/m, -13.1% y/y
- KUB: Reports 9-month Net ¥42.8B v ¥44.1B y/y, Op Profit ¥76.8B v ¥69.0B y/y, Rev ¥730.6B v ¥680.0B y/y
- TM: Repuidance and production targets
- Korean orts Q3 Net ¥80.9B v ¥61Be, Op Profit ¥149.7B v ¥96Be, Rev ¥4.86T v ¥4.9Te; Raises FY11/12 gAir, 003490.KR: Exec: Was a difficult year for the freight market; Saw no drop in bookings after wing cracks on A380
- TCL.AU: Reports H1 Net profit A$93.2M, +24.8% y/y; Rev A$571M, +23.1% y/y
- COH.AU: Reports H1 Net loss A$20.4M (ex-recall costs A$80.2M) v profit A$87.2M y/y; Rev A$387.5M v A$377M y/y
- MQG.AU: Guides FY12 Net profit 25% lower than FY11 (implies A$717M); Announces plans to start 10% share buyback program in H1 FY13
***US Equities***
- YUM: Reports Q4 $0.75 v $0.74e, R$4.11B v $4.0Be; +2.2% afterhours
- APC: Reports Q4 adj $0.85 v $0.62e, R$3.84B v $3.3Be; +1.4% afterhours
- CSTR: Reports Q4 $1.00 v $0.64e, R$520.5M v $498Me; Redbox to acquire the assets of NCR's Entertainment Line of Business for up to $100M; +16.9% afterhours
***FX/Fixed Income/Commodities***
- SLV: iShares Silver Trust ETF daily holdings rise to 9,649 tons from 9,622 tons (highest since 9,698 on Dec 20th)
- (JP) Tokyo Grain Exchange may be dissolved, considering transferring some market to other bourses - Japanese press

Data of the work to the bat forecasts, unemployment still falls United States

February 3, 5: 02 pm

The U.S. Bureau of Labor Statistics reported earlier than January pay data non-firm show 243 000 new jobs. Release before surveyed analysts were predicting an increase of only 150,000 new jobs. Data for December revised 203 000 new jobs. Including, the unemployment rate fell yet again, this time to 8.3%, same as the expectations of analysts for the rate remains unchanged.
On Wednesday, ADP reported that only 170,000 new agricultural non-exploitations jobs in December, well off the coast of 185,000 consensus forecast. Who, with the decision of the Federal Reserve to extend the duration of the ultra low rate of interest through 2014, has considerably weakened the Dollar for several days.
Some traders OpenBook were convinced that data from work today to continue its upward trend and meet or even beat expectations, and traders were short the EUR/USD pair in anticipation.
Just forward the announcement, sentiment on the OpenBook is bullish and the EUR/USD pair more rated 1.3172, took a quick dive a few minutes later to opening prices the day that their bounces back quickly. It took a full 20 minutes before the couple lost steam and directed in negative territory. This wording of the pair is trading less than 1.3103 and feeling turned down.
OpenBook guru pyruss, which had closed with profit of long positions of the data dissemination, closed with profit both long and short position once his targets had been met. Guru robepu was able to liquidate a long position at 1.3189 with a gain of 23.26% of the moments just after the announcement.

TradeTheNews.com European Market Update: UK Q4 GDP contracts; German IFO survey mixed; All eyes now on FOMC statement and forecasts

IFO survey mixed; All eyes now on FOMC statement and forecasts

***Economic Data***
- (EU) ECB: €3.6B borrowed in overnight loan facility v €3.4B prior; €485.8B parked in deposit facility vs. €490.5B prior
- (FI) Finland Dec Preliminary Retail Sales Volume Y/Y: 1.8% v 2.5%e
- (TH) Thailand Central Bank cut the Benchmark Interest Rate by 25bps to 3.00%, as expected
- (HU) Hungary Nov Retail Trade Y/Y: +1.1% v -0.1%e
- (ES) Spain Dec Producer Prices M/M: -0.1% v -0.1%e; Y/Y: 5.2% v 5.2%e
- (NL) Netherlands Jan Producer Confidence: -1.4 v -2.0e
- (DE) Germany Jan IFO Business Climate: 108.3 v 107.6e; Current Assessment: 116.3 v 116.8e; Expectations Survey: 100.9 v 99.0e
- (IT) Italy Nov Retail Sales M/M:-0.3% v -0.2%e; Y/Y: -1.8% v -1.5%e
- (UK) Q4 Advanced GDP Q/Q:-0.2% v -0.1%e; Y/Y: 0.8% v 0.8%e v 0.5% prior
- (UK) Dec BBA Loans for House Purchase: 36.2K v 35.0Ke
- (UK) Nov Index of Services M/M: 0.6% v 0.4%e; 3M/3M: +0.1% v -0.1%e
- (BR) Brazil Jan FGV Consumer Confidence: 116.0 v 119.6 prior
- (UK) Jan CBI Trends Total Orders: -16 v -23e; Selling Prices: +13 v +3e; Business Optimism: -25 v -30 prior

Fixed Income:
- (RU) Russia sold RUB19.8B vs. RUB20.0B in 2017 OFZ Bond; avg yield 8.04%
- (EU) ECB allotted$7.9B v $5.9B prior in 7-Day USD Liquidity Tender at fixed 0.60%
- (EU) ECB allotted €19.6B in 3-Month Tender vs. €35.0Be
- (SE) Sweden sold SEK2.5B vs. SEK2.5B indicated in 3.5% 2022 Bonds; Yield 1.826%
- (DE) Germany sold €2.46B in 3.25% July 2042 Bund; avg yield2.62 % v 2.82% prior (record low); Bid-to-cover: 2.1x v 1.10x prior

*** SPEAKERS/FIXED INCOME/FX/COMMODITIES/ERRATUM ***
***Notes/Observations***
- Apple beats expectations
- Japan does record its first trade deficit since 1980

Equities:
FTSE 100 -0.60% at 5718, DAX -0.40% at 6391, CAC-40 -0.60% at 3301, IBEX-35 -0.80% at 8525, FTSE MIB -0.70% at 15,820, SMI -1.3% at 6057

- European equity indices opened the session higher, but have since pared gains amid another batch of disappointing corporate earnings, rise in peripheral bond yields (notably Portugal), continued concerns related to the Greek debt talks and caution ahead of the US Fed's interest rate decision due later today. Also, declines in shares of most financials are weighing on the European indices. The weakness in financials is being led by French and UK banks. Equities in Switzerland have underperformed, following earnings reports from Novartis [NOVN.CH] and Lonza [LONN.CH]
- In individual movers, technology names, including Dialog Semiconductor [DLG.DE], Imagination Technologies [IMG.UK] and Arm Holdings [ARM.UK] are all moving higher after Apple reported better than expected quarterly results. In Switzerland, Lonza [LONN.CH] is lower by over 11%, after the company disclosed FY11 earnings and announced plans to search for a new CEO. Novartis [NOVN.CH] has declined by more than 3%, following its Q4 earnings report and 2012 guidance. Roche [ROG.CH] is lower by approximately 2%, after announcing a hostile $5.7B bid for US genetic analysis system manufacturer Illumina [ILMN]. In Sweden, Ericsson [ERICB.SE] has lost over 13%, after reporting weaker than expected earnings. Shares of Alcatel-Lucent [ALU.FR] and Nokia [NOK1V.FI] are also lower amid the weakness in Ericsson's shares. In Germany, Beiersdorf [BEI.DE] is higher by more than 3.5%, after reporting earnings. In France, Air France [AF.FR] is lower on renewed speculation that the company could report a significant loss for 2011. Also in France, shares of Inter Parfums [ITP.FR] and Biomerieux [BIM.FR] are both higher following their respective financial reports.

Speakers:
- EU was said to be losing hope regarding voluntary Greek bond deal and chatter circulated that the ECB might take losses on Greek bond positions
- IMF's Lagarde commented in a French radio interview that if good decisions are taken at this time it could help revive global economic growth. She noted that the Greek financial situation was extremely difficult and stressed that the EU needed firewalls to prevent contagion in the region. She reiterated that combining the EFSF and ESM was a positive idea. Global economy was on a narrow path with limited room for maneuver.
- IMF Zhu Min commented during CNBC Davos interview that global risks remained on the downside and reiterated that Europe needed to increase the size of its bailout fund and stressed the need to get the Greek PSI deal done
- German Chancellor Merkel commented in the Spanish press that Europe must take measures to increase economic growth and jobs. She reiterated that Germany wanted to keep the euro
- The Thailand central bank commented at its rate decision that interest rates were not on a downward trend and that the current interest rate of 3.00% was appropriate for both economic growth and inflation. The central bank noted that today's rate cut was to accommodate its recovery from the recent floods. Manufacturing to return to normal levels in late Q3 vs. Q2 prior view
- Japan Econ Min Furukawa commented that the Govt shared the same view of economy as the BOJ and reiterated the view that the recent decline in exports was due to strong yen and slowing global economy. He believed that the trade deficit last year was due to one-off factors.
- Spain Econ Min Guidos commented that H1 to be very difficult for Spain, though might see some signs of optimism at year end. He noted that a VAT hike was not on the agenda
- Portugal Industrial Confederation chief: Portugal needs an additional €30B in EU/IMF aid to solve credit crunch. Expected EU/IMF bailout to be extended after Govt shows it can meet targets
- German IFO economist Abberger commented that 2012 had started on a positive note with export and construction sectors were clearly more confident. -The weak Euro currency has helped. The IFO did not expect Germany to slip into recession but cautioned the current business situation was less favorable compare to Dec
- India Central Bank Gov Subbarao commented that interest rate cuts were dependent upon several factors that include Rupee currency, India's deficit balance and level of inflation
- Bank of England Minutes saw another unanimous vote to keep both interest rate and asset purchases steady. On monetary policy some MPC members thought further expansion of QE was likely to be required but it reiterated the view of no compelling reason to think that QE impact now materially different from first round. On inflation the MPC reiterated it would fall sharply in the coming months, but the extent and speed of further fall was uncertain. Some saw risk spare capacity greater than assumed in Nov inflation report while others saw risks to inflation more finely balanced, less clear that inflation would fall below target. The minutes had mixed news on energy prices, as Middle-East raised risk of sharp rise in oil prices.

Currencies:
- The FX price ahead was quiet ahead of the FOMC rate decision but the USD was firmer ahead of the NY morning. Dealers did note that the statement could be vital for the USD's direction particularly in regards to inflation targeting. The scenario laid out by various dealers noted that no inflation targeting by the Fed would provide the greenback with momentum to test the low 1.28's. Conversely any inflation targeting could weaken the greenback towards 1.3250 area in the near future.
- The GBP was at its session lows of 1.5535 ahead of its Q4 GDP data on concerns that the QoQ contraction could be significantly worse than expectations but managed to find some footing afterwards. The BOE minutes might have provided an excuse as the inflationary commentary appeared to be less dovish as in the past.
- The EUR/USD tested session highs of 1.3050 following the better German IFO sentiment data but failed to sustain the momentum into the NY morning as concerns over Greece continued to linger. The pair was back below 1.30 by the late European morning.
- The JPY continued it soft tone against the majors following the first annual Japanese trade deficit in over 30 years which seemed to highlight the country's declining competitive edge but dealers did point out the current account remained a surplus.

Political/ In the Papers:
- During the session, the German press reported that that the EU said to be losing hope regarding voluntary Greek bond deal. It was added that the ECB may take losses on Greek bond positions.
- The Telegraph's Evans-Pritchard commented on PSI talks related to Greece and the role that CDS could play. He suggested that EU officials signaled that they would allow Greece to default unless its private creditors are willing to accept more pain. The head of the EU Commission's economics team Mario Buti said the EU is prepared to allow credit default swaps (CDS) on Greek bonds to play a role if the talks with private creditors do no yield the desired results.
- The Ireland's NAMA may disclose its actual loan losses according to the Irish Independent. The comments follow years of campaigning by Blackrock, Co Dublin-based Brian Flanagan, who had requested it include greater transparency about loan sizes, and the extent of those losses. Note that NAMA does not provide any details about individual borrowers or of development projects; there is no plan to modify that, as it has long argued that disclosures as such would breach confidentiality.

***Looking Ahead***
- 7:00 (UK) Prime Minister's question time in House of Commons
- 7:00 (EU) EU's Almunia
- 7:00 (US) MBA Mortgage Applications w/e Jan 20th: No est v 23.1% prior
- 7:00 (RU) Russia Dec Producer Prices M/M: 0.8%e v 1.6% prior; Y/Y: 15.4%e v 15.7% prior
- 7:15 (DE) German Foreign Min Westerwelle meets Australia Foreign Min Rudd
- 7:30 (TU) Turkey Jan Industrial Confidence: No est v 97.2 prior; Capacity Utilization: 74.1%e v 75.5% prior
- 9:00 (US) Federal Open Market Committee (FOMC) holds a closed meeting
- 9:00 (MX) Mexico Dec Preliminary Trade Balance: -$359.5Me v $ prior
- 9:00 (CA) Canada Nov Teranet/National Bank HPI M/M: No est v 0.0% prior; Y/Y: No est v 7.0% prior; House Price Index: No est v 149.46 - -
- 9:30 (BR) Brazil Central Bank Posts weekly Currency Flows:
- 9:45 (UK) BOE to buy £1.7B in 2022-2036 Gilts in reverse auction
- 10:00 (US) Nov House Price Index M/M: 0.0%e v -0.2% prior
- 10:00 (US) Dec Pending Home Sales M/M: -1.0%e v 7.3% prior; Y/Y: No est v 6.9% prior
- 10:30 (US) Weekly DOE Energy Inventories
- 10:30 (UK) UK PM Cameron addresses Council of Europe in Strasbourg, France
- 11:30 (US) Treasury to sell $35.0B in 5-Year Notes - 12:00 (CA) Ontario Fin Min Duncan speaks in NY
- 12:00 (FR) France Dec Net Change in Jobseekers: +25.0Ke v +29.9K prior; Total Jobseekers: 2.879Me v 2.845M prior
- 12:30 (US) FOMC Interest Rate Decision: expected to leave Interest Rates unchanged at 0.25%
- 13:00 (US) FOMC Q1 Economic Forecast Summary
- 14:00 (AR) Argentina Dec Supermarket Sales Y/Y: No est v 19.2% prior
- 14:15 (US) Fed Chairman Bernanke press conference
- 15:00 (NZ) New Zealand Central Bank (RBNZ) Interest rate Decision: Expected to leave the Official Cash Rate unchanged at 2.50%

Legal disclaimer and risk disclosure

All information provided by Trade The News (a product of Trade The News, Inc. "referred to as TTN hereafter") is for informational purposes only. Information provided is not meant as investment advice nor is it a recommendation to Buy or Sell securities. Although information is taken from sources deemed reliable, no guarantees or assurances can be made to the accuracy of any information provided. 1. Information can be inaccurate and/or incomplete 2. Information can be mistakenly re-released or be delayed, 3. Information may be incorrect, misread, misinterpreted or misunderstood 4. Human error is a business risk you are willing to assume 5. Technology can crash or be interrupted without notice 6. Trading decisions are the responsibility of traders, not those providing additional information. Trade The News is not liable (financial and/or non-financial) for any losses that may arise from any information provided by TTN. Trading securities involves a high degree of risk, and financial losses can and do occur on a regular basis and are part of the risk of trading and investing.

Daily Forex Market News
Forex news reports can be found on the forex research headlines page below. Here you will find real-time forex market news reports provided by respected contributors of currency trading information. Daily forex market news, weekly forex research and monthly forex news features can be found here.

Forex News
Real-time forex market news reports and features providing other currency trading information can be accessed by clicking on any of the headlines below. At the top of the forex blog page you will find the latest forex trading information. Scroll down the page if you are looking for less recent currency trading information. Scroll to the bottom of fx blog headlines and click on the link for past reports on forex. Currency world news reports from previous years can be found on the left sidebar under "FX Archives."

TradeTheNews.com European Market Update: UK Q4 GDP contracts; German IFO survey mixed; All eyes now on FOMC statement and forecasts

 TradeTheNews.com European Market Update: UK Q4 GDP contracts; German IFO survey mixed; All eyes now on FOMC statement and forecasts
***Economic Data***
- (EU) ECB: €3.6B borrowed in overnight loan facility v €3.4B prior; €485.8B parked in deposit facility vs. €490.5B prior
- (FI) Finland Dec Preliminary Retail Sales Volume Y/Y: 1.8% v 2.5%e
- (TH) Thailand Central Bank cut the Benchmark Interest Rate by 25bps to 3.00%, as expected
- (HU) Hungary Nov Retail Trade Y/Y: +1.1% v -0.1%e
- (ES) Spain Dec Producer Prices M/M: -0.1% v -0.1%e; Y/Y: 5.2% v 5.2%e
- (NL) Netherlands Jan Producer Confidence: -1.4 v -2.0e
- (DE) Germany Jan IFO Business Climate: 108.3 v 107.6e; Current Assessment: 116.3 v 116.8e; Expectations Survey: 100.9 v 99.0e
- (IT) Italy Nov Retail Sales M/M:-0.3% v -0.2%e; Y/Y: -1.8% v -1.5%e
- (UK) Q4 Advanced GDP Q/Q:-0.2% v -0.1%e; Y/Y: 0.8% v 0.8%e v 0.5% prior
- (UK) Dec BBA Loans for House Purchase: 36.2K v 35.0Ke
- (UK) Nov Index of Services M/M: 0.6% v 0.4%e; 3M/3M: +0.1% v -0.1%e
- (BR) Brazil Jan FGV Consumer Confidence: 116.0 v 119.6 prior
- (UK) Jan CBI Trends Total Orders: -16 v -23e; Selling Prices: +13 v +3e; Business Optimism: -25 v -30 prior

Fixed Income:
- (RU) Russia sold RUB19.8B vs. RUB20.0B in 2017 OFZ Bond; avg yield 8.04%
- (EU) ECB allotted$7.9B v $5.9B prior in 7-Day USD Liquidity Tender at fixed 0.60%
- (EU) ECB allotted €19.6B in 3-Month Tender vs. €35.0Be
- (SE) Sweden sold SEK2.5B vs. SEK2.5B indicated in 3.5% 2022 Bonds; Yield 1.826%
- (DE) Germany sold €2.46B in 3.25% July 2042 Bund; avg yield2.62 % v 2.82% prior (record low); Bid-to-cover: 2.1x v 1.10x prior
*** SPEAKERS/FIXED INCOME/FX/COMMODITIES/ERRATUM ***
***Notes/Observations***
- Apple beats expectations
- Japan does record its first trade deficit since 1980
Equities:
FTSE 100 -0.60% at 5718, DAX -0.40% at 6391, CAC-40 -0.60% at 3301, IBEX-35 -0.80% at 8525, FTSE MIB -0.70% at 15,820, SMI -1.3% at 6057
- European equity indices opened the session higher, but have since pared gains amid another batch of disappointing corporate earnings, rise in peripheral bond yields (notably Portugal), continued concerns related to the Greek debt talks and caution ahead of the US Fed's interest rate decision due later today. Also, declines in shares of most financials are weighing on the European indices. The weakness in financials is being led by French and UK banks. Equities in Switzerland have underperformed, following earnings reports from Novartis [NOVN.CH] and Lonza [LONN.CH]
- In individual movers, technology names, including Dialog Semiconductor [DLG.DE], Imagination Technologies [IMG.UK] and Arm Holdings [ARM.UK] are all moving higher after Apple reported better than expected quarterly results. In Switzerland, Lonza [LONN.CH] is lower by over 11%, after the company disclosed FY11 earnings and announced plans to search for a new CEO. Novartis [NOVN.CH] has declined by more than 3%, following its Q4 earnings report and 2012 guidance. Roche [ROG.CH] is lower by approximately 2%, after announcing a hostile $5.7B bid for US genetic analysis system manufacturer Illumina [ILMN]. In Sweden, Ericsson [ERICB.SE] has lost over 13%, after reporting weaker than expected earnings. Shares of Alcatel-Lucent [ALU.FR] and Nokia [NOK1V.FI] are also lower amid the weakness in Ericsson's shares. In Germany, Beiersdorf [BEI.DE] is higher by more than 3.5%, after reporting earnings. In France, Air France [AF.FR] is lower on renewed speculation that the company could report a significant loss for 2011. Also in France, shares of Inter Parfums [ITP.FR] and Biomerieux [BIM.FR] are both higher following their respective financial reports.
Speakers:
- EU was said to be losing hope regarding voluntary Greek bond deal and chatter circulated that the ECB might take losses on Greek bond positions
- IMF's Lagarde commented in a French radio interview that if good decisions are taken at this time it could help revive global economic growth. She noted that the Greek financial situation was extremely difficult and stressed that the EU needed firewalls to prevent contagion in the region. She reiterated that combining the EFSF and ESM was a positive idea. Global economy was on a narrow path with limited room for maneuver.
- IMF Zhu Min commented during CNBC Davos interview that global risks remained on the downside and reiterated that Europe needed to increase the size of its bailout fund and stressed the need to get the Greek PSI deal done
- German Chancellor Merkel commented in the Spanish press that Europe must take measures to increase economic growth and jobs. She reiterated that Germany wanted to keep the euro
- The Thailand central bank commented at its rate decision that interest rates were not on a downward trend and that the current interest rate of 3.00% was appropriate for both economic growth and inflation. The central bank noted that today's rate cut was to accommodate its recovery from the recent floods. Manufacturing to return to normal levels in late Q3 vs. Q2 prior view
- Japan Econ Min Furukawa commented that the Govt shared the same view of economy as the BOJ and reiterated the view that the recent decline in exports was due to strong yen and slowing global economy. He believed that the trade deficit last year was due to one-off factors.
- Spain Econ Min Guidos commented that H1 to be very difficult for Spain, though might see some signs of optimism at year end. He noted that a VAT hike was not on the agenda
- Portugal Industrial Confederation chief: Portugal needs an additional €30B in EU/IMF aid to solve credit crunch. Expected EU/IMF bailout to be extended after Govt shows it can meet targets
- German IFO economist Abberger commented that 2012 had started on a positive note with export and construction sectors were clearly more confident. -The weak Euro currency has helped. The IFO did not expect Germany to slip into recession but cautioned the current business situation was less favorable compare to Dec
- India Central Bank Gov Subbarao commented that interest rate cuts were dependent upon several factors that include Rupee currency, India's deficit balance and level of inflation
- Bank of England Minutes saw another unanimous vote to keep both interest rate and asset purchases steady. On monetary policy some MPC members thought further expansion of QE was likely to be required but it reiterated the view of no compelling reason to think that QE impact now materially different from first round. On inflation the MPC reiterated it would fall sharply in the coming months, but the extent and speed of further fall was uncertain. Some saw risk spare capacity greater than assumed in Nov inflation report while others saw risks to inflation more finely balanced, less clear that inflation would fall below target. The minutes had mixed news on energy prices, as Middle-East raised risk of sharp rise in oil prices.
Currencies:
- The FX price ahead was quiet ahead of the FOMC rate decision but the USD was firmer ahead of the NY morning. Dealers did note that the statement could be vital for the USD's direction particularly in regards to inflation targeting. The scenario laid out by various dealers noted that no inflation targeting by the Fed would provide the greenback with momentum to test the low 1.28's. Conversely any inflation targeting could weaken the greenback towards 1.3250 area in the near future.
- The GBP was at its session lows of 1.5535 ahead of its Q4 GDP data on concerns that the QoQ contraction could be significantly worse than expectations but managed to find some footing afterwards. The BOE minutes might have provided an excuse as the inflationary commentary appeared to be less dovish as in the past.
- The EUR/USD tested session highs of 1.3050 following the better German IFO sentiment data but failed to sustain the momentum into the NY morning as concerns over Greece continued to linger. The pair was back below 1.30 by the late European morning.
- The JPY continued it soft tone against the majors following the first annual Japanese trade deficit in over 30 years which seemed to highlight the country's declining competitive edge but dealers did point out the current account remained a surplus.
Political/ In the Papers:
- During the session, the German press reported that that the EU said to be losing hope regarding voluntary Greek bond deal. It was added that the ECB may take losses on Greek bond positions.
- The Telegraph's Evans-Pritchard commented on PSI talks related to Greece and the role that CDS could play. He suggested that EU officials signaled that they would allow Greece to default unless its private creditors are willing to accept more pain. The head of the EU Commission's economics team Mario Buti said the EU is prepared to allow credit default swaps (CDS) on Greek bonds to play a role if the talks with private creditors do no yield the desired results.
- The Ireland's NAMA may disclose its actual loan losses according to the Irish Independent. The comments follow years of campaigning by Blackrock, Co Dublin-based Brian Flanagan, who had requested it include greater transparency about loan sizes, and the extent of those losses. Note that NAMA does not provide any details about individual borrowers or of development projects; there is no plan to modify that, as it has long argued that disclosures as such would breach confidentiality.
***Looking Ahead***
- 7:00 (UK) Prime Minister's question time in House of Commons
- 7:00 (EU) EU's Almunia
- 7:00 (US) MBA Mortgage Applications w/e Jan 20th: No est v 23.1% prior
- 7:00 (RU) Russia Dec Producer Prices M/M: 0.8%e v 1.6% prior; Y/Y: 15.4%e v 15.7% prior
- 7:15 (DE) German Foreign Min Westerwelle meets Australia Foreign Min Rudd
- 7:30 (TU) Turkey Jan Industrial Confidence: No est v 97.2 prior; Capacity Utilization: 74.1%e v 75.5% prior
- 9:00 (US) Federal Open Market Committee (FOMC) holds a closed meeting
- 9:00 (MX) Mexico Dec Preliminary Trade Balance: -$359.5Me v $ prior
- 9:00 (CA) Canada Nov Teranet/National Bank HPI M/M: No est v 0.0% prior; Y/Y: No est v 7.0% prior; House Price Index: No est v 149.46 - -
- 9:30 (BR) Brazil Central Bank Posts weekly Currency Flows:
- 9:45 (UK) BOE to buy £1.7B in 2022-2036 Gilts in reverse auction
- 10:00 (US) Nov House Price Index M/M: 0.0%e v -0.2% prior
- 10:00 (US) Dec Pending Home Sales M/M: -1.0%e v 7.3% prior; Y/Y: No est v 6.9% prior
- 10:30 (US) Weekly DOE Energy Inventories
- 10:30 (UK) UK PM Cameron addresses Council of Europe in Strasbourg, France
- 11:30 (US) Treasury to sell $35.0B in 5-Year Notes - 12:00 (CA) Ontario Fin Min Duncan speaks in NY
- 12:00 (FR) France Dec Net Change in Jobseekers: +25.0Ke v +29.9K prior; Total Jobseekers: 2.879Me v 2.845M prior
- 12:30 (US) FOMC Interest Rate Decision: expected to leave Interest Rates unchanged at 0.25%
- 13:00 (US) FOMC Q1 Economic Forecast Summary
- 14:00 (AR) Argentina Dec Supermarket Sales Y/Y: No est v 19.2% prior
- 14:15 (US) Fed Chairman Bernanke press conference
- 15:00 (NZ) New Zealand Central Bank (RBNZ) Interest rate Decision: Expected to leave the Official Cash Rate unchanged at 2.50%
Legal disclaimer and risk disclosure
All information provided by Trade The News (a product of Trade The News, Inc. "referred to as TTN hereafter") is for informational purposes only. Information provided is not meant as investment advice nor is it a recommendation to Buy or Sell securities. Although information is taken from sources deemed reliable, no guarantees or assurances can be made to the accuracy of any information provided. 1. Information can be inaccurate and/or incomplete 2. Information can be mistakenly re-released or be delayed, 3. Information may be incorrect, misread, misinterpreted or misunderstood 4. Human error is a business risk you are willing to assume 5. Technology can crash or be interrupted without notice 6. Trading decisions are the responsibility of traders, not those providing additional information. Trade The News is not liable (financial and/or non-financial) for any losses that may arise from any information provided by TTN. Trading securities involves a high degree of risk, and financial losses can and do occur on a regular basis and are part of the risk of trading and investing.