Equities did find some composure today, helped somewhat by good demand for Greeces’ bond issue, some decent corporate earnings reports and ‘bargain’ hunting, even in spite of US existing home sales tumbling 16.7% in December. I dont think we are out of the woods just yet though. I haven’t made a trade this week as I just dont feel comfortable about where these markets want to go near term.
Currencies were broadly quiet, EURUSD especially so, ahead of F.O.M.C on Wednesday. The Pound did continue to make slow but sure gains against both the Yen and Dollar and that may continue overnight into the UK GDP release tomorrow morning. (more on that below)
We have 2 important numbers tomorrow for both the Euro and the Pound.
German IFO Business Climate – 400am EST
With worries that the German recovery has slowed significantly in Q4 2009 and Q1 2010,
either confirming or dispelling these fears.
UK GDP – 4.30am EST
We are likely to see confirmation the U.K has finally emerged from recession in the last quarter of 2009. The pound will be especially sensitive to this data, particularly any surprise to the downside, given its firming up over the past few weeks. If we do get that surprise i will certainly being looking to short it against the Dollar or the Yen.
We also have Consumer Confidence, Manufacturing and Housing data out of the U.S early in the NY session.
Almost forgot to mention BOJ monetary statement, rates will stay unchanged and it may largely be a non event. Just have to watch for any cues as to any potential further monetary easing such as buying more Government debt.
