Forex Trade Talk 11:00 GMT 29 February 2012

Trade Talk: What's Moving Markets continuous on Forex Forum Key Items: US- GDPr  Chi PMI, Bernanke, Fed Minutes.
The ECB LTRO announcement saw a EUR 529.531bln drawdown of three year funds from the ECB. The markets had expected a drawdown of about EUR 500 bln. 800 banks vs. 523 previously participated. The hope is the funds will be allocated to lending in the European economy, however business demand reportedly recently has been weak. One has to wonder if theses funds recently have been moving into financial assets.
One somewhat esoteric, but potentially market-moving, event Wed could be end of month portfolio rebalancing for equity funds. With the U.S. stock prices higher overseas fund managers might have to USD to sell to hedge equity portfolios against USD fluctuation risk.   
Fed Chairman Bernanke testifies today and Thursday on the economy.
The other major focus this week is the usual first week of the month global PMI releases.
The USDJPY has established itself above the psychological 80.00 line. This was on the back of considerable Japanese covert intervention. There is no doubt that JPY selling has been generating EUR demand. March fiscal end of year flows are often in the opposite direction. 
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
EQUITIES & INTEREST RATES
Bonds 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. 
See ECONOMIC CALENDAR for a complete list of future forex market events and consensus data estimates. Go to the forex forum for up-to-date market developments and technical trading ideas.
John M. Bland is an author and co-founder and partner of Global-View.com. Prior to Global-View.com, he was a forex trader and a private-label forex analyst for a top Fed watching service in NYC. He has been a corporate forex advisor and also worked in international liability management for a major N.Y. money center bank. John holds an MBA from the University of California at Berkeley and a B.A. in International Economics from that school.
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