FX Fundamentals View

Today, movements are within narrow range in the absence of economic fundamentals from major economies and due to Labor Day holiday in the United States and Canada. The dollar is showing slight incline against a basket of major currencies as depicted by the dollar index which rebounded from support at 81.90 to record a high of 82.13 after falling over the past two weeks. Concerning the euro-dollar pair, it is showing slight decline on the daily and 4-hour charts as a correction after four

Czech Republic According to the first estimate the Czech economy grew by 2.1% in the second quarter. The industry as well as exports recorded strong growth, while domestic demand remained subdued. Inflation is closer to the target of the CNB but the central bank may not rush to raise its rates. Hungary Macro data in August confirmed the consensus view about a gradual recovery amid improving external balance and low inflation. The next key event could be the 2011 budget proposal due early

Czech Republic The Ministry of finance cuts the domestic supply and issues a eurobond denominated in euro. Poland No clear signs of inflationary pressure according to central bank governor The week ahead Will the Polish C/A deficit again be close to EUR 1bn? Overview Market conditions for debt financing look quite favorable Central European governments are currently completing their draft state budgets for 2011. At the same time, they are also unveiling their plans as to how the state budget

FREEDOM HOUSE REPORT POSITIONS LEBANON AS A “PARTLY FREE” COUNTRY IN LABOR FREEDOM According to Freedom House’s report titled “The Global state of Workers’ Rights: Free Labor in a Hostile World”, Lebanon is positioned among countries having a “Partly Free” labor rights environment. ACTIVITY ON THE BEIRUT STOCK EXCHANGE IN AUGUST 2010 According to the Beirut Stock Exchange’s (BSE) monthly bulletin, traded value for the month of August 2010 dropped sharply by 42.00% to $35.87 million. BALANCE OF

WEEKLY OUTLOOK (06/09 TO 10/09/2010) Fundamental Highlights Critical data releases almost solely surprised on the strong side, with the Chinese and US purchasing manager indices rising and the US labor market report clearly beating expectations. The FOMC Minutes sent a message of cautiousness on the recovery this year, but remained confident on recovery next year. The ECB’s press conference signaled no change in its stance. In line with market expectations, it revised up growth forecasts for

Equity markets – contrarians up for the second month? Believers in seasonality on Wall Sreet have hard times. Not only August tuned out poor despite being historically good, but September looks bound to be bullish despite the bearish heritage. Much is attributed to the US labor market which gave more warning signal in August (rising claims) but ultimately the payrolls report for the previous month didn’t confirm them, adding more good news to the higher Conference Board and industrial ISM. The

There was considerable relief, most acutely in the US administration, that the US August jobs report revealed a better than expected outcome. To recap, private sector payrolls increased by 67k vs. an upwardly revised 107k in July whilst total non farm payrolls dropped 54k. The data sets the market up for a positive start to the week in terms of risk appetite despite Friday’s drop in the August US non-manufacturing ISM index, deflating some of the market’s upbeat mood. Once again I wonder how

Headlines Currencies: Czech macro data show a mixed picture Fixed Income: Czech FinMin sells Eurobond today, demand expected to be strong Czech Republic The Czech koruna was only little changed after Friday’s payrolls report and this remained the case after heavy inflows of Czech monthly figures this morning. They showed a mixed picture, because a solid outcome of the July trade balance (surplus CZK 6.3bn) was compensated by weaker-than-expected industrial production data. In this respect, the

Previous session overview The euro rose to near a three-week high against the dollar in Asia Monday as strong regional share markets prompted short-term players to buy the risk-sensitive currency, dealers said. In afternoon trade in Tokyo, the common currency rose to USD1.2905, its highest level since Aug. 18. The rise came as Japan's benchmark Nikkei Stock Average led gains in regional bourses, trading up 1.51%. At 0450 GMT, the euro stood at USD1.2895, compared with USD1.2896 late Friday in

Data from the UK continued to disappoint on Friday heightening the fears of a double dip recession in the 2nd half of 2010. UK services PMI, the most important of the purchasing managers surveys, came in at 51.3 vs. an expected 52.9. The previous figure was 53.1, so it easy to see a decline in the services industry. As we stated last week the PMIs are a forward looking indicator and as such falls or a slowing of growth in Q3 and Q4 are expected in the UK. While people may glance over the

Market Brief Markets have opened in the green this morning, bolstered by continued buildups in risk appetite following Friday’s rather optimistic NFP number. To highlight Friday’s report, Nonfarm payrolls reported a drop of -54K jobs versus an expected drop of -105K while the change in private payrolls showed an addition of 67K jobs versus an expected addition of 40K jobs. The overall unemployment rate was a touch weaker at 9.6% which was largely expected. Although the results showed a loss in

On Friday morning, investors were awaiting the outcome of the key US payrolls report. Nevertheless, sentiment to risk remained constructive already at that time. This kept EUR/USD well bid, with the pair comfortably holding above the 1.28 handle. The US payrolls came out materially better than expected. This was an obvious positive sign for equity investors and for the buyers of other riskier assets. EUR/USD gained some ground, but traders still reacted with some reservation. This release had

We start the week with some interesting updates on ANZ Job Advertisements in Australia, ECB President Jean-Claude Trichet specks in Europe and more. Let’s see what’s awaiting us today In Europe, President of the European Central Bank Jean-Claude Trichet speaks at the National Bank of Romania Gala Concert, in Bucharest. The Euro may be affected and info provided on future monetary policy. Also in Europe, Sentix Investor Confidence index released monthly, based on a survey of about 2,800

News and views US payrolls report boosts risk appetite. US equities surged on relief only 54,000 people lost jobs in August, compared to expectations of 105,000. The S&P500, which had ranged quietly until the report, closed 1.3% higher. Commodities closed 0.6% higher, oil down 0.6% on a weaker US services-ISM report, but copper up 0.1%, and silver (+1.2%) making a post-March 2008 high. US 10yr treasury yields rose 7bp to 2.70%, having reached 2.76% immediately after the payroll data.