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Rate cuts approved might be not enough

Mon, Dec 8 2008, 11:36 GMT
by Guillermo Alcalá

FXstreet.com


The week we leave behind we have seen historic movements, starting for the ECB and BoE's interest rate decisions, the Bank of England has slashed its Bank Rate by 100 basis points to 2%. Interest rate have never been lower than 2% since the Bank was created in 1694, the last time rates were this low was in 1939. European Central Bank has cut its Repo Rate by 75 basis points, instead of the 50 bp expected, to 2.5%.

Interest rate cuts have not been enough to restore confidence in the markets and currencies continued in the tren they were, Dollar and Yen, as safe havens have continued strengthening while The Pound reaches the lowest levels in years against all majors.

To end the week US non-farm payrolls have posted a huge slump in November, -533K instead of the -320 expected, well above a million of workers have lost the jobs in the last three months in the United States, a clear signal that the US is entering a deep and long recession period. In order to boost fast deteriorating economy, the Federal Reserve could approve another rate cut and leave interest rates at the lowest levels in the last 50 years. Interesting times ahead.

Next week we have got several important events to check out:

Sunday December 7


  • 23:50    Japan    Trade Balance - BOP Basis - October (Previous: ¥247.1B)

Monday December 8


  • 09:30    United Kingdom    Producer Price Index - November - Input    (Previous: -5.6% m/m; 13.8% y/y); Output (Previous: -1% m/m; 6.8% y/y)
  • 11:00    Germany    Industrial Production - October (Previous: -3.6% m/m; -2.1% y/y)
  • 13:00    European Monetary Union     ECB Trichet's Speech
  • 13:15    Canada    Housing Starts s.a - November (Previous: 211.8k)
  • 23:50    Japan    Gross Domestic Product Annualized - 3Q (Previous:  -3%)

Tuesday December 9


  • 00:01    United Kingdom    BRC Retail Sales Monitor - November (Previous: -2.2%)
  • 00:01    United Kingdom    RICS House Price Balance - November (Previous: -82%)
  • 05:00    Japan    Leading Economic Index - October (Previous: 89.4)
  • 06:45    Switzerland    Unemployment Rate - November (Previous: 2.5%)
  • 07:00    Germany    Trade Balance - October (Previous: 15B)
  • 09:30    United Kingdom  Trade Balance - November (Previous: -7.5 Bill.)
  • 10:00    Germany    ZEW Survey - Economic Sentiment - December (Previous: -53)
  • 14:00    Canada    BoC Interest Rate Decision     (Actual: 2.25)    
  • 15:00    United States    Pending Home Sales - October  (Previous: -4.6%)
  • 23:30    Australia    Westpac Consumer Confidence - December (Previous: 4.3%)
  • 23:50    Japan    Core Machinery Orders - October (Previous: 5.5%)

Wednesday December 10


  • 00:30    Australia    Home Loans - October  (Previous:  -2.7%)
  • 10:00    Switzerland    ZEW Survey - Expectations - December (Previous: -88.5)


Thursday December 11


  • 00:30    Australia    Unemployment Rate - November  (Previous: 4.3%)
  • 08:05    European Monetary Union    ECB Trichet's Speech
  • 08:30    Switzerland    SNB Interest Rate Decision (Current: 1%)
  • 09:00    European Monetary Union    ECB Monthly Report
  • 13:30    United States    Trade Balance - October (Previous: -$56.47B)
  • 13:30    United States    Import Price Index - November (Previous: -4.7% m/m; 6.7% y/y)
  • 13:30    Canada    New Housing Price Index - October (Previous: 2.1% y/y)
  • 21:45    New Zealand    Retail Sales - October (Previous: 0.1%; Ex-autos: -0.5%)

 

Friday December 12

    
  • 04:30    Japan    Industrial Production - October (Previous: 1.1% m/m% 0.2% y/y)
  • 05:00    Japan    Consumer Confidence - November (Previous: 29.8)
  • 10:00    European Monetary Union    Industrial Production s.a. - October (Previous: -1.6% m/m; -2.4% y/y)
  • 13:30    United States    Producer Price Index - November (Previous: 5.2 y/y; core: 4.4 y/y)
  • 13:30    United States    Retail Sales - November ( Previous: -2.8%; ex autos: -2.2%)
  • 15:00    United States    Reuters/Michigan Consumer Sentiment Index - December (Previous: 55.3) 


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