Good morning from Hamburg. The Queen Mary 2 left Hamburg while writing this report. A lot of viewer enjoyed the impressive and big ship, but back to the market. Today we will see a lot of interesting figures starting with the Japanese industrial output and ending with the US Federal budget.
Market review
The GBP fell sharply and hits a new all-time low against EUR of 0.8237 and a 6 year low versus USD after BoE inflation report points to a sharp contraction in the economy in 2009, suggests further aggressive interest rate cuts likely. GBP was down nearly 3 percent and closed versus the USD at 1.4931 so it breaks the 1.50 level first time since June 2002. Against the EUR the GBP lost 2.5 percent yesterday.
The Japanese annual wholesale inflation sank to 4.8 percent in October, below a median market forecast for a 5.5 percent increase from a year earlier, BoJ data shows. The annual figure fell from 6.8 percent in September as gasoline and commodity prices slide, raising fears of a return to deflation aimed a global financial crisis. The corporate goods price index rose a multi decade high of 7.4 percent in August from a year earlier. The JPY hits a 2 week high versus the EUR as investors continue to avoid riskier assets and switch to safety of the Japanese currency as global recession concerns grow.
The Bund flirts with further positive territory. The Dec. Bund Future is last 15 ticks higher at 118.19. So the two Yr. yields are down at 2.318% as a result of latest Fed 150 bln. auction.
GBP / CAD
The GBP / CAD was supported at the 1.83 at the last days. But shorter candles might suppose that the currency pair could break through the support line. Even more than the GBP becomes weaker and weaker against the USD while breaking the important 1.50 level.
GBP / JPY
The GBP get downward pressure versus the JPY as well as versus the CAD. Yesterday the currency pair closes right at the down line of the Fibonacci fan which might suppose a possible turn in the trend. But the weak figures of the UK economy from last week could continue the trend.
