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US Morning Notes

USD rebounds as IMF says recession is not over yet

Wed, Sep 23 2009, 13:25 GMT
by Michael J. Malpede

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FX Highlights 

• USD is rebounding ahead of today's FOMC meeting supported by a statement from the IMF that the global recession has not yet ended and by profit taking ahead of today’s FOMC meeting, GBP rebounds versus EUR in reaction to report that the BOE unanimously voted to maintain the current level of bond purchases at the September policy meeting, EU manufacturing and services PMI post modest improvement, EU industrial orders rise more than expected, BOC officials express concern about CAD strength and said Canada’s recovery is fragile 

• Focus turns to today's FOMC policy announcement, the FOMC is expected to note improvement in the US economy and may signal the beginning of an exit strategy, the Fed is expected to confirm that rates will remain low for an extended period,G-20 meeting set for September 24th and 25th focus on proposed new financial market regulation and global imbalances 

• IMF says global recession not over yet, impact of recession will be felt for long time after its technically over 

• UK CBI says UK economy is coming out of recession in Q3 but recovery will be slow, BOE voted unanimously for no change in rates and to maintain the current level of asset purchases at the September policy meeting, UK August mortgage lending rises by 2.8 billion, GBP higher 

• EU September flash manufacturing PMI improves to 49 from 48.2 in September, services PMI improved to 50.6 from 49.9, July industrial orders rose 2.6%, ECB’s Weber says there was no need to unwind unconventional policy measures at this time, EUR lower 

• Economist Krugman says the US unemployment rate may not peak until 2011 and its possible the recession will be a double dip one 

• Canada’s PM Harper says Canada has a fragile recovery, most of the growth tied to stimulus, not seeing the type of growth to improve the labor market, must make sure next wave of growth built on sustainable basis, growth cannot hinge solely on the US consumer, BOC’s Carney sees Canada's jobless rate rising further too early to say if Canada is experiencing self-sustaining growth, BOC warns on CAD strength, CAD lower 

• Moody’s upgrades Brazilian debt rating to investment 

• Marketwatch reports that corporate insiders have increased selling of their stocks at a faster pace, this could be an indication that the US stock market is overbought

• US mortgage applications rose sharply last week to the highest level since last May as mortgage rates fall below 5%

• US equity markets set to open mixed, European equities 0.5% higher, Nikkei closed for holiday 

Upcoming Events

• US - Wednesday, FOMC policy decision at 2:15 ET 

• CAN - Wednesday, no major Canadian economic data is due for release today

• Download Full US Morning Notes

Published on  Wed, Sep 23 2009, 13:32 GMT

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