Forex Trade Talk 11:00 GMT 25 January 2012

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Share This Story:  Forex Trade Talk Updates continuously added to Forex Forum Key Items  US- Pend Homes Sales, 5-yr, FOMC+ Press Conference. The headline German Ifo survey data was better than forecast. Conditions and expectations were mixed. Markets took the report in stride. The EURUSD is trading weaker early. U.K. GDP data were a touch softer and the latest BOE Minutes were mixed and there fore less dovish than recently.  saw better than expected EZ flash PMI data, and also vague unconfirmed chatter about possible activity in the EURJPY cross. Oftentimes fundamental news can be a trigger for price moves that had to happen anyway. Australian Quarterly CPI data were softer than forecast. A lot has been made of the Japanese trade deficit. Analysts blame primarily the strong JPY and slack overseas demand for exports. .  Greek sovereign debt negotiations broke down yesterday after an impasse on the interest rate on the bonds set to replace existing ones. A 4% coupon works out to a 65% to 70% haircut for private holders while 3.75% works out to 75% to 80% write-down.  End of fiscal year Japanese life insurance investment adjustment activity coming into focus?  Check the Forex Forum over the day for an updated and ongoing discussion of current trading themes in the MARKET CHATTER continuous discussion thread.Forex pairs vs 2-yr note spreads Some traders focus intently on the Japan vs. U.S. 2-yr note spread (only the U.S. 2-yr moves much). COMMODITIES and Commodity Currencies
Click on Chart to Enlarge EQUITIES & INTEREST RATESBonds are a counter to risk trades because risk investments must be financed. When the cost of money moves up (higher interest rates), the return and allure of risk trades such as equities falls.