Today’s Comment
In the US the order intake of durable goods has increased slowly since March 2009. We expect a very moderate rise in new orders in January.
In Germany, unemployment only rose for the second time over the past six months. As various schemes expire, we expect unemployment to rise again. In Japan, industrial production has increased considerably for ten months on end, but there is still a long way to go. The increase in exports – particularly to China and the rest of Asia – is making a considerable contribution to this progress. Deflation in Japan has changed from primarily being affected by wide fluctuations in oil prices to being fuelled by general developments due to widespread low demand, idle resources in the economy and falling wages. We think we will still see falling prices – albeit to a lesser degree – and not until 2012 will we see positive inflation.
For once, we show EUR/USD in Today’s Chart, as once again the euro was in focus. Until Bernanke’s speech (in which he reiterated the message of low interest rates for quite a period), the euro found some support, but then the currency came under heavy fire after an announcement from S&P in which the rating agency stated that a downgrade by one or two notches would not be unlikely within the next month. This should not come as a surprise to the market but it was one of the factors triggering the movement. More serious criticism was voiced by British media quoting the Greek deputy prime minister for accusing Nazi Germany of the country’s current problems. This further aggravated the situation with Germany and France on the one side and Greece on the other. Supposedly Germany and France are putting together a rescue package for Greece, and seen in that light, it seems that the Greek deputy prime minister is about to cut the bough he is sitting on. And indeed, the FX market did not receive this well, and investors have been selling euro to the benefit of dollar and yen.
Today’s Key Events
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09:15 Consumer confidence (SEK)
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09:55 Change in unemployment figures (DEM)
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10:00 Unemployment (NOK)
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14:30:00 New orders, durable consumer goods (USD)
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00:15 PMI manufacturing (Nomura) (JPY)
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00:30 Consumer prices (JPY)
Today’s Chart – EUR/USD
