“The biggest challenge is to respond to the crisis in an adequate manner”
– Christine Lagarde, the IMF Managing Director
The International Monetary Fund is aiming to increase its lending capacity by 500 billion dollars to protect economies from the escalating euro zone debt crisis.
“Unemployment could become one of the main economic and political issues this year”
– Peter Dixon, an economist at Commerzbank AG
The number of people claiming unemployment benefits rose by 1.2 thousand to 1.6 million in December and the unemployment rate increased to 8.4 per cent, the highest rate in 16 years, said the Office for National Statistics on Wednesday.
“Builders are seeing greater interest among potential buyers as employment and consumer confidence slowly improve”
– David Crowe, NAHB Chief Economist
Homebuilder sentiment increased for a fourth consecutive month in January, said the National Association of Home Builders on Wednesday. The NAHB/Wells Fargo Housing Market index rose to 25 from 21 in December. Reading above 50 indicates negative outlook.
CHF
“European markets are likely to get a massive lift from the data out of China”
– Stan Shamu, a market strategist at IG Markets
Swiss stocks edged higher for a third consecutive day to their highest level in six months on Wednesday as the International Monetary Fund announced its aim to boost lending resources by additional 500 billion dollars.
JPY
“Concern about a slowdown in the global economy is receding”
– Hiroichi Nishi, an equities manager at SMBC Nikko Securities Inc
Japanese stocks gained on Wednesday, led by oil companies and brokerages. The Nikkei 225 advanced 0.99%, or 84.18 points, to 8,550.58, while the broader Topix edged higher 0.47%, or 3.45, to 734.98.
“The euro-dollar is rallying on the hope of additional support from inside or outside of Europe”
– GFT (based on Marketwatch)
EUR/USD is attempting to close above 20 day ma at 1.2851/77. Should the price confirm a breach, the pair is likely to carry on advancing until it reaches 1.3077/1.3145. The initial support may be found at 1.2782, followed by 1.2711 and 1.2624.
“The euro could target 90 yen within this year, but for now, everyone is underweight euro and covers short positions whenever there is good news about Europe”
– Citibank (based on WSJ)
Rally of EUR/JPY is gaining momentum, suggesting a further recovery of the pair. Being that 98.30 has been already overcome, the next target lies at 100.45/77. However, in the long run the currency pair is expected to decline to 94.92.
“Events in the euro zone will remain the main driver for sterling in coming days”
– Rabobank (based on Reuters)
After bouncing off a formidable support at 1.5272 the Cable is recovering. Nonetheless, current rally is unlikely to extend beyond 55 day ma at 1.5624 and an additional resistance at 1.5669.
“Manufacturing has benefited from exports to emerging markets. The more resilient those economies are, the better it is for U.S. manufacturing”
– State Street Global Markets LLC (based on Bloomberg)
USD/JPY currency pair has formed a base near 76.58 support level and is looking to make an attempt to pierce through 77.69. In either case subsequent resistances are situated at 78.49, 79.56 and 80.00.
“Traders just aren’t that into Swiss Franc”
– CNBC
The currency pair has tumbled down to a support at 0.9384/17 which is anticipated to withstand bearish pressure. After retesting this level USD/CHF should commence surging and eventually attain 0.9595.
Greece May Reach Agreement With Bondholders Soon
Greece kicked off a fresh round of talks on a bond swap deal with its creditors on Wednesday, with both sides under pressure to iron out differences that could trigger a messy default by Athens.
Goldman Sachs cuts pay and bonuses as profits halve
US banking giant Goldman Sachs has cut its pay and bonus payments during 2011 – to $12.2bn (£7.4bn).
Australian shares close marginally lower
Australian shares closed with slim losses Thursday, after the release of a disappointing jobs report.