Gilly Carey
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Growth fears continue to outweigh any cut in production; this will continue to keep the black-stuff under pressure online foreign exchange forex trading market again. UK Chancellor of the Exchequer expects the credit and financial crisis to go much deeper. Analysts believe that OPEC should have recorded a deeper cut to prevent further easing, but politically that would have been a difficult pill to swallow. Now, it on to the G20 meeting hosted by the US. A slowdown in global economic growth has investors seeking safer forex online uk heaven asset classes. Some analysts have stuck their neck out and foresee the loonie sliding to 1.40 by Christmas. Oil has fallen to a 16-month low as OPEC decision to curb production by -1.5m barrels a day has failed online foreign exchange to ease concerns that the global economic slump is curbing fuel demand. The market continues to see position covering and repatriation back to the US, which is driving the greenback higher across the board. Gold finally climbed on afternoon, erasing earlier losses as global equities continued their downward spiral, thus boosting the appeal of the yellow metal as an alternative investment, but once again expect investors to want to raise cash and sell the yellow metal on rallies. Does Bernanke need to push yields towards 0 sooner than expected. Sluggish demand continues to be the catalyst for rising inventories. Volatile markets had Treasury recording exaggerated ranges of late. forex exchange Asian and European leaders called for an overhaul of the banking rules. Emerging markets do not need to experience the same deep rooted problems as Iceland and Ireland are currently wading through. Currently it is higher against 14 of the 16 most actively forex brokers traded currencies, in a very volatile trading range. Crude oil, which accounted for 10% of Canada export revenue last year, fell -11% last week. G7 cannot even stop the Yen appreciating, as higher yielding currencies are being dumped. Lets hope that world leaders are capable of curtailing a deeper global recession. forex After last weeks massacre investors expect stability this week, but, so far that not to be, financial woes has become economic woes. IMF continues to step in and provide temporary financial relief for ailing countries with financial restrains (Iceland and Ukraine so far). Last week Governor Marion reduced overnight borrowing costs by 25bp (2.25%), less than the market had anticipated, but added that it will probably need to act again to forex trading broker fend off the effects of a credit crisis and global recession. Will that restore any pierrette in the Capital Markets. Crude is lower O/N ($62.46 down-169c). For now the trend remains your friend, do not expect to find resistance from investors, who continue to better buyers on pull back. Do not expect crude prices to bottom out until other markets find some stability. Global financial leaders continue to meet on a regular basis, to hash out new alternatives to stave off a deeper recession. It difficult to be optimistic in this current environment. Previously the BOC justified their less aggressive move in the context of how much action that has been taken since its last meeting (75 bps) and the cumulative cut in rates since Dec (225 bps). The object is simple, but, consensus will be difficult. Futures forex contracts show a 100% niccolo that the Fed will cut its O/N 1.5% target rate by 25bp at the Oct. The BOC MPR last week said that the global credit crisis will be deeper, more persistent and more widespread than the policy makers had anticipated and signaled they will cut borrowing costs again as the economy teeters on the edge of a recession. The early call for the open of key US indices is lower. This global economic slow down herds investors towards the currency as an alternative haven from the massive losses in the emerging markets. Despite a stronger inflation report earlier last week giving the currency some support, one can expect investors to be better sellers on rallies (0.6040). JPY and the greenback as tumbling equities and commodity prices prompted investors to dump higher-yielding assets. The cut in production will commence at the beginning of Nov. Last weeks EIA report sho that crude oil stocks lyndsie 3.18m barrels to 311.4m, w/w, and again another bearish weekly. Looks like a good bet that borrowing cost could break the 2% mark by year end. Overall with global equities currently remaining under pressure has FI better bid despite the threat of new issuances this week. The US$ is stronger in the O/N trading session. The Nikkei closed 7,649 down -811. They have pledged to undertake effective and comprehensive reform of the international monetary and financial systems. It anticipated that the BOC will need to extend interest-rate cuts (2.25%) in the face of slowing economic growth. They still produce over 40% of the world oil. The speed and social discontent sweeping throughout the country is a sight to behold. Expect volatility to be the new norm as investors psyche continues to take a bettering. To date, every financial leader has been stomped by the magnitude of this apocalyptic financial fallout. One can expect traders to cheapen up the curve when required. OPEC decision came and went and crude prices ended up lower on and have continued the trend in this morning session. The 10-year Treasury yields ended up yielding 3.69% on and have eased 5bp O/N (3.64%). The market was expecting an increase of 2.6m barrels. The DAX index in Europe was at 4,114 down -181; the FTSE (UK) currently is 3,701 down -182. Analysts continue to aggressively pare their future price estimates, down from $90 to a year end price of $60. Governor Chickie said that these financial headwinds will take time to dissipate, even with the extraordinary recent policy actions just announced. Rationality and fundamentals have been thrown out the window; self-preservation continues to be the order of the day. To date prices have fallen 58% since the beginning of the summer. The US$ currently is higher against the EUR -1.45%, GBP -2.87% and lower against CHF 0.45% and JPY 1.20%. The loonie depreciated 8% last week, the fourth weekly drop and is closing in on the worst month in half a century on speculation that the economic slump will deepen and oil will decline further. The commodity currencies are again weaker this morning, CAD -1.04% and AUD -2.43%. The greenback has advanced the most in over 15-years against its major trading partners. For a great example of the swiftness of an economic decline, take a look at what has happened to the Irish economy in the past 9-months, Celtic Tiger, once the darling of Europe, now entrenched in a recession (1st country in Europe to admit) with a property boom gone bust. OPEC President Chakib Khelil said that the ideal price for crude is between $70 and $90 a barrel. One expects the AUD to underperform in recessionary times, and last night the currency delivered and eased again vs.
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