FXstreet.com: Fundamental
FXstreet.com: Fundamental. Get the grip on the macro-economic picture with the most respected firms.

Trade balance remains in surplus in January Latest: +$0.8B (Actual) +$0.4B (Expected) Previous: +$0.1B (revised up from -$0.2B) FACTS: The Canadian trade balance registered a $0.8B surplus in January, after two $0.01 surpluses in December and November (small deficits initially reported - top chart). In January, exports grew $0.153B or 0.5%. Advances in exports of industrial goods and materials (+$0.3B), consumer goods (+$0.1B) and agricultural and fishing products (+$0.1) were partly offset by

FXstreet.com: Fundamental
FXstreet.com: Fundamental. Get the grip on the macro-economic picture with the most respected firms.

Ahead of another heavy U.S. Treasury auction, with today the turn of the 30-year maturity, dealers have sold bonds ahead of time bowing to slightly more favorable economic data. Strong industrial production, retail sales and bank lending data emerging overnight from the Chinese economy coupled to a report indicating a rise in its inflationary pressures, also helped pressure global bond prices lower in turn lifting yields. The distant stench of a possible Greek sovereign debt default also

FXstreet.com: Fundamental
FXstreet.com: Fundamental. Get the grip on the macro-economic picture with the most respected firms.

There’s a nice mix of arguments this morning to give rise to conflicting views on today’s currency movements. A slew of healthy data out of China confirmed up to be a rambunctious pup desperate to play in the yard. Moreover the strength of the data raises the stakes in terms of monetary tightening, which helped boost the Japanese yen rise against regional currencies on a risk reversion theme. Yet the yen showed its true colors against both the dollar and euro where rising confidence in a

FXstreet.com: Fundamental
FXstreet.com: Fundamental. Get the grip on the macro-economic picture with the most respected firms.

FX Highlights The USD is trading mixed to lower as a temporary boost from report of a surprise rise in China's inflation and strong Chinese industrial production and retail sales data fades, strong Chinese economic data raises the risk of earlier rate hike from China and stocks drifted lower save for the Nikkei, the Chinese economic data dampened risk appetite, JPY is trading lower pressured by report of a downward revision in Japan's Q4 GDP and BOJ ease speculation, GBP gains in reaction to a

FXstreet.com: Fundamental
FXstreet.com: Fundamental. Get the grip on the macro-economic picture with the most respected firms.

Key News • China Inflation, Production Accelerate, Adding Pressure for Stimulus Exit (Bloomberg) • Greece Paralyzed by Strikes as Unions Protest Against Plan to Cut Deficit (Bloomberg) • LONDON, March 11 (Reuters) - Britons' expectations for inflation over the next 12 months rose slightly to 2.5 percent in February from 2.4 percent in November, a quarterly survey from the Bank of England showed on Thursday. • ZURICH, March 11 (Reuters) - The Swiss National Bank will likely leave interest rates

FXstreet.com: Fundamental
FXstreet.com: Fundamental. Get the grip on the macro-economic picture with the most respected firms.

Chinese data released yesterday and today suggest that growth is again accelerating slightly in early 2010. The export recovery continues unabated and domestic demand still looks solid with investment demand holding up surprisingly well despite the government’s recent moves to curb credit growth. On the other hand, inflationary pressure is increasing – albeit not alarmingly so. Today’s data supports the view that China will soon start to raise interest rates and probably resume appreciation of

FXstreet.com: Fundamental
FXstreet.com: Fundamental. Get the grip on the macro-economic picture with the most respected firms.

As the stock markets are declining from the continued pessimism in the markets therefore causing investors to sell higher-yielding assets and buying lower yielding assets which therefore boosts the dollar in markets, as currently we see the dollar rising. The Dollar Index, which measures strength of the dollar versus six major currencies, is currently traded at 80.46 while recording a high of 80.56 and a low of 80.23.  The euro zone today released its March Monthly Report not mentioning

FXstreet.com: Fundamental
FXstreet.com: Fundamental. Get the grip on the macro-economic picture with the most respected firms.

A quick overview at both domestic and international economic prospects, presented in a quarterly basis.

FXstreet.com: Fundamental
FXstreet.com: Fundamental. Get the grip on the macro-economic picture with the most respected firms.

Gold-Euro Link Turns Negative as Chinese Savers – World's No.2 Buyers – Hit by Sub-Zero Interest Rates THE PRICE OF WHOLESALE gold bullion ticked higher early Thursday for Dollar investors, but slipped further for Sterling and Euro buyers as world stock markets again held flat together with commodities. Government bonds fell, pushing the yield offered by 10-year UK gilts up to a 2-week high of 4.14%. Ten-year US Treasuries offered 3.74% p.a., more than three-and-half percentage points above

FXstreet.com: Fundamental
FXstreet.com: Fundamental. Get the grip on the macro-economic picture with the most respected firms.

SNB leaves its 3-month Libor Target Rate unchanged at 0.25% in March SNB kept its 3-month Libor Target Rate unchanged at 0.25% in March, in line with both prior and forecasts. ECB March Bulletin, gradual withdrawal from nonstandard measures According to the European Central Bank’s March monthly bulletin, the bulletin is merely the minutes for the ECB March meeting, when the ECB decided to keep interest rates unchanged and withdrew further easing measures. Though ECB President Trichet did

FXstreet.com: Fundamental
FXstreet.com: Fundamental. Get the grip on the macro-economic picture with the most respected firms.

Gold Gold fell sharply in a short period of time yesterday in US trading - falling from $1,127.35/oz to $1,103.45/oz to close with a loss of 1.26%. It has range traded from $1,105/oz to $1,109/oz so far in European trading this morning. Gold is currently trading at $1,105.70/oz and in euro and GBP terms, gold is trading at €811/oz and £739/oz respectively. Oil at over $82 a barrel would be expected to lead to inflation hedging buying but is not supporting gold today. Yesterday’s sell off

FXstreet.com: Fundamental
FXstreet.com: Fundamental. Get the grip on the macro-economic picture with the most respected firms.

The Swiss National Bank (SNB) today announced the three-month Libor target rate leaving them steady at 0.25%, as a way to continue battling the worst recession seen in Switzerland in more than thirty years while taming deflation risks.  Switzerland expanded by 0.7% in the fourth quarter while the dominate sectors that prompt growth levels have been rising, especially the leading economic indicators and manufacturing growth which rose for the 10th month.  The Swiss central bank,

FXstreet.com: Fundamental
FXstreet.com: Fundamental. Get the grip on the macro-economic picture with the most respected firms.

Currency markets are tranquil today where movements are in narrow range ahead of the release of jobless claims and trade balance in the US. Markets, yet there was movement during the Asian session where the yen strengthened against majors after a Chinese report showed that inflation rose to the highest in 16 months, which may prompt the Chinese central bank to unwind stimulus measures faster than expected. However, currently major pairs are consolidating except the pound that advanced against

FXstreet.com: Fundamental
FXstreet.com: Fundamental. Get the grip on the macro-economic picture with the most respected firms.

Overnight News Asia: JGB’s were trading down 23 ticks to 139.15 at 0623 GMT reversing two days of gains as the Nikkei rose 1%. In other news, Japan government is to upgrade its economic view for the first time in 8 months. (Nikkei) In terms of economic data, Japan GDP Annualised (Q4 F) Y/Y 3.8% vs. Exp. 4.0% (Prev. 4.6%) (BBG) In other news, China is not witnessing inflationary pressure yet, deputy central bank governor Su Ning said. (RTRS) China Producer Price Index (Feb) Y/Y 5.4% vs. Exp.

FXstreet.com: Fundamental
FXstreet.com: Fundamental. Get the grip on the macro-economic picture with the most respected firms.

The world’s leading economy continues to suffer from the aftermath of the worst financial crisis in decades, where lack of fundamentals over the past few days has lead investors to shift stock markets into the directions they desire as they step back to reassess and take positions depending on the outlook they thought the economy is headed. U.S stocks future declined in today’s trading where the S&P 500 might stop the two day decline before the release of job sector data from the U.S; the

FXstreet.com: Fundamental
FXstreet.com: Fundamental. Get the grip on the macro-economic picture with the most respected firms.

The recovery remains on track, but is now entering a more critical phase where the boost from inventories, fiscal policy and normalisation of financial conditions is fading. Going forward, the fate of the recovery will depend upon the strength of underlying demand. In this respect, a turnaround in jobs remains essential for the economy to settle on self-sustained recovery path. The longer-term outlook remains one of moderate growth as tough fiscal consolidation and financial regulation lie

FXstreet.com: Fundamental
FXstreet.com: Fundamental. Get the grip on the macro-economic picture with the most respected firms.

The ECB released its monthly report for March stating that the current interest rates of 1.00% were appropriate. From France, non-farm payrolls were released showing lower drop than markets projected as companies are reducing costs while unemployment rates are expected to resume its incline.  Beginning off with the ECB monthly report, the text showed that interest rate decision that was on the 4th of March is proper for the current economic conditions while keeping in mind all the

FXstreet.com: Fundamental
FXstreet.com: Fundamental. Get the grip on the macro-economic picture with the most respected firms.

ECONOMIC DATA - (PH) Philippine Central Bank maintained the Overnight Borrowing Rate at 4.00%; as expected - (GE) Germany Q4 hourly Labor Costs Q/Q: -0.5%; Y/Y: +1.6% - (FR) France Jan Central Gov't Balance: -€9.2B v -€140.0Be - (FR) France Q4 Final NoN-Farm Payrolls Q/Q: % v -0.4%e - (SP) Spain Jan House Transactions Y/Y: 2.1% v -0.3% prior - (HU) Hungary Feb Consumer Prices M/M: 0.3% v 0.7%e; Y/Y: 5.7% v 6.1%e - (HU) Hungary Jan Preliminary Trade Balance: €290.4M v €203.0Me - (TU) Turkey Jan

FXstreet.com: Fundamental
FXstreet.com: Fundamental. Get the grip on the macro-economic picture with the most respected firms.

Consumer prices rose 0.3% m/m in February, while the 12-month CPI rate slowed to 5.7% from the 6.4% published for January. Our expectation for the y/y rate was 6%, while the market consensus was 6.1%-6.2%. Volatile food prices - which caused negative surprise in January, increasing by 2.2% on the monthly level - rose just 0.3% m/m in February. Household energy prices increased by a moderate 0.3% m/m, within which purchased heating prices decreased by 3.4% m/m - due to the lower VAT rate -

FXstreet.com: Fundamental
FXstreet.com: Fundamental. Get the grip on the macro-economic picture with the most respected firms.

The CAD is trading at a two month high versus the USD and has made substantial gains versus European currencies. The outperformance of the CAD is attributed to recent Canadian economic data that points to a stronger than expected Canadian recovery. Canada’s Q4 GDP rose at its fastest space nine years reported at 5%. Canada also reported stronger than expected housing data, improvement in the manufacturing sector and rising employment. CAD is also supported by BOC policy outlook and rising

FXstreet.com: Fundamental
FXstreet.com: Fundamental. Get the grip on the macro-economic picture with the most respected firms.

London, 11 March 2010 - A combination of stale speculative and technical selling pressured gold to its lowest in over a week Wednesday, dragging the rest of the complex lower. In contrast risk appetite underpinned equities and kept the dollar under pressure as the Euro gained 0.35% against the greenback and 0.9% versus the Yen. The Euro was also lifted after Romano Prodi, former European Commission President, said the worst of Greece's financial crisis was over and that other European nations

FXstreet.com: Fundamental
FXstreet.com: Fundamental. Get the grip on the macro-economic picture with the most respected firms.

Overnight data released in China showed better than expected growth in factory output, and consumer inflation rose to a sixteen month high. CPI rose to 2.7% in February. This has raised concerns that the Chinese central bank may increase monetary tightening, and possibly raise interest rates. There is a school of thought that gradual tightening may not be enough to curb the robust growth levels. Eyes will now turn to the USD to see how it reacts. Market News The rate of unemployment rose to

FXstreet.com: Fundamental
FXstreet.com: Fundamental. Get the grip on the macro-economic picture with the most respected firms.

Headlines Currencies: Czech GDP should be revised upwards Fixed Income: Polish governor speaks against strong zloty Czech Republic The Czech koruna gained slightly on modestly improving sentiment on the global equity markets. The pair touched 25.52 EUR/CZK without any significant domestic impetus on the table. Today the Czech GDP should be revised upwards. We expect the positive developments in the inventory cycle and export recovery to offset weaker domestic demand. Nevertheless we are

FXstreet.com: Fundamental
FXstreet.com: Fundamental. Get the grip on the macro-economic picture with the most respected firms.

Previous session overview The yen rose against the dollar and euro, bouncing back from Thursday's disappointing Japanese economic-growth revision, after Chinese economic data raised investors' concerns that interest rates would rise. China's February consumer-price index accelerated from the year-earlier month, to a greater-than-expected pace of 2.7%. Fixed-asset investment, bank lending and industrial-production data also beat most expectations. The greenback weakened against its Japanese

FXstreet.com: Fundamental
FXstreet.com: Fundamental. Get the grip on the macro-economic picture with the most respected firms.

Manufacturing output falls unexpectedly Fears over exports continue RBNZ keep rates at 2.5% It never rains, it pours in currency land for sterling at the moment with yesterday seeing yet more weak data published and dragging the pound lower. The manufacturing sector had been one of the few bright spots on the UK data scene in 2010 with strong Purchasing Manager Indices and good confidence levels. Yesterday’s news that output had dipped by 0.9% when the market had expected a 0.2% rise kicked

FXstreet.com: Fundamental
FXstreet.com: Fundamental. Get the grip on the macro-economic picture with the most respected firms.

US Equities advanced for a second consecutive day on Wednesday led by financials. The S&P rose by 0.45%, ending close to the 2010 highs. This morning, Asian shares trade in positive territory, apart from Chinese stocks as inflation accelerated. In China, CPI inflation rose by 2.7% Y/Y in February, the fastest rise in more than a year, but the Lunar New Year holidays might have lifted inflation as people spent more on food and travelling, which might have lifted prices. Japan’s economy grew

FXstreet.com: Fundamental
FXstreet.com: Fundamental. Get the grip on the macro-economic picture with the most respected firms.

The seizing of financial markets that followed Lehman Brothers’ failure caused the global economy to fall into its deepest recession in decades. By the spring of 2009 industrial production (IP) in the 30 countries that comprise the Organisation for Economic Cooperation and Development (OECD) had plunged more than 15 percent from year-earlier levels (Figure 1). Incredibly, it could have been far worse. The governments of the world’s major countries averted catastrophe at the height of the

FXstreet.com: Fundamental
FXstreet.com: Fundamental. Get the grip on the macro-economic picture with the most respected firms.

Market Brief Japan’s Tsumura sees signs of self-sustained recovery in domestic demand. Japan’s Hirano was more pessimistic; saying economy still in severe state despite positive growth Japan Q4 GDP was revised to +0.9% q/q, +3.8% annualized (1.0%/4.0% expected, 1.1%/4.6% prior) Reports that the China Statistics Bureau sees mild inflation in the coming year, but no signs of overheating. China CPI (Feb) +2.7% y/y, PPI +5.4%, +2.3% and +5.2% eyed, +1.2% and +0.4% m/m. China industrial production

FXstreet.com: Fundamental
FXstreet.com: Fundamental. Get the grip on the macro-economic picture with the most respected firms.

Asian Market Update: Weak China Feb industrial production, downplayed inflationary pressure weigh on risk trade; RBNZ, BOK on hold with an eye on future policy action; Aussie jobs disappoint, weigh on April RBA outlook ECONOMIC DATA - (NZ) RBNZ LEAVES RATES UNCHANGED AT 2.50% AS EXPECTED - (NZ) NEW ZEALAND FEB BUSINESS NZ PMI: 53.3 V 52.1 PRIOR (highest level since Nov 2007) - (NZ) NEW ZEALAND FEB FOOD PRICES M/M: -1.3% V 2.1% PRIOR (4-month low) - (JP) JAPAN Q4 FINAL GDP Q/Q: 0.9% V 1.0%E;

FXstreet.com: Fundamental
FXstreet.com: Fundamental. Get the grip on the macro-economic picture with the most respected firms.

Review Poland sold 2-year government bonds with very good demand (bid to cover over 3). We remain positive on fiscally strong CEE sovereigns relative to PIIGS. Yesterday didn’t offer too much by way of macro data but we note that Lithuania posted a larger-than-expected current account deficit, which is testament to the difficulties of rebalancing. Preview Hungarian inflation data will be the main macro event in the CEE today. The last reading was a significant upside surprise and should we see

FXstreet.com: Fundamental
FXstreet.com: Fundamental. Get the grip on the macro-economic picture with the most respected firms.

Today, there are no fundamentals from the European continent except the release of the ECB Bulletin for the month of March in a tranquil week. However, still concerns with regard the high debt problems prevailing in many European economies are the main focus of the market. As of 10:00 GMT, ECB will release its bulletin for March which mainly summarizes Trichet's speech that followed March's rate decision. Policy makers at the ECB left the cost of borrowing unchanged at 1.0% in March and

FXstreet.com: Fundamental
FXstreet.com: Fundamental. Get the grip on the macro-economic picture with the most respected firms.

News and views Equities are modestly fi rmer, currencies little changed, and commodities are lower. US wholesale inventories fell, but the equity market focused more on the detail which said companies’ sales rose. The S&P500 is up 0.4%, just shy of its one year high (set in Jan) and banks are 2.1% higher. The CRB commodities index is down 0.4% (oil a notable exception at +0.1%), copper -1.4%, and gold -1.3%. US treasuries are 2-3bp higher in yield, but were even weaker prior to the 10yr

FXstreet.com: Fundamental
FXstreet.com: Fundamental. Get the grip on the macro-economic picture with the most respected firms.

The US dollar weakened against most major currencies except for the British pound. After a growth spurt at the end of 2009, speculation that the US economy will slow in the months ahead and keep the Federal Reserve from raising borrowing costs until Q4 pushed the dollar down. Data from the Mortgage Bankers Association reported its seasonally adjusted index of mortgage applications increased 0.5% last week. The euro recouped some of its losses seen yesterday after stronger than expected

FXstreet.com: Fundamental
FXstreet.com: Fundamental. Get the grip on the macro-economic picture with the most respected firms.

EEM - iShares MSCI Emerging Markets Index ETF – A contrarian options trader established a large-volume bearish put butterfly spread in the June contract this afternoon even though shares of the emerging markets exchange-traded fund, which looks for investment results that correlate to the price and yield performance of the MSCI Emerging Markets index (an index designed by MSCI as an equity benchmark for international stock performance), are trading 0.65% higher to $41.47 as of 2:30 pm (ET).

FXstreet.com: Fundamental
FXstreet.com: Fundamental. Get the grip on the macro-economic picture with the most respected firms.

It looks like the API is playing catch up to the Department of Energy. A massive crude build according to the American Petroleum Institute, along with big product draws is going to keep the oil market on edge. The API released another shocker when they said that US oil inventories increased by an incredible 6.5 million barrels. Yet at the same time the API reported big time product draws. For gasoline the API reported supplies fell by 3.18 million barrels and gasoline by almost 3.18 million

FXstreet.com: Fundamental
FXstreet.com: Fundamental. Get the grip on the macro-economic picture with the most respected firms.

Monetary policy makes in South Korea decided today to keep interest rates steady at 2.00% fir the 13th straight meeting, hoping to support Asia's fourth largest economy to overcome the consequences of the financial crisis. As for China, it released reports showing inflation accelerated that may force the central bank to raise interest rates end the yuan's peg to the dollar two years ago. The Bank of Korea kept rates unchanged meeting market forecasts, while the bank ensured it focus on

FXstreet.com: Fundamental
FXstreet.com: Fundamental. Get the grip on the macro-economic picture with the most respected firms.

Crude oil price rallied after release of the bullish inventory report. The front-month contract rose to as high as 83.03, less than 1 dollar below the 2010-high of 83.95 made in January, before closing at 82.09, up +0.7%. Today in Asia, the black gold slides to 81.55 amid concerns over Chinese tightening. EIA's oil inventory data beat market expectations. Crude oil inventory increased +1.43 mmb to 343 mmb in the week ended March 5. The less-than- expected build was due to -8% decline in

FXstreet.com: Fundamental
FXstreet.com: Fundamental. Get the grip on the macro-economic picture with the most respected firms.

Positive data from China and a strong bond sale by Portugal helped increase risk appetite and boost the Euro against its rivals, while a weak manufacturing report hurt the Pound. Higher yielders were up for the day, with the Yen sliding as a result.

FXstreet.com: Fundamental
FXstreet.com: Fundamental. Get the grip on the macro-economic picture with the most respected firms.

EURO The euro appreciated vis-à-vis the U.S. dollar today as the single currency tested offers around the US$ 1.3675 level and was supported around the $1.3545 level.  The common currency has traded in about a 400-pip range for the past month or so as traders continue to deliberate the prospects of a larger credit crisis in the eurozone.  There has been less attention on Greece’s fiscal problems over the last several trading sessions and many dealers are speculating the country will

FXstreet.com: Fundamental
FXstreet.com: Fundamental. Get the grip on the macro-economic picture with the most respected firms.

The Reserve Bank of New Zealand decided today to keep interest rates at its low level of 2.50% for the seventh straight meeting. Allan Bollard the Governor of the RBNZ said the bank will maintain its policy till mid-2010, before deciding to raise interest rates. Weak domestic spending in New Zealand, besides the decline in house prices, are affecting economic recovery negatively that is forcing the central bank to keep rate steady at its low levels in order to support the economy and the credit