Currency Market Updates | Suddenly Global Stock Markets have gone all bullish …..

Suddenly Global Stock Markets have gone all bullish …..

Suddenly Global Stock Markets have gone all bullish …..

… with strong performances from Europe, Wall Street and Japan – all for differing reasons. The bounce in Financial stocks in London (led by Barclays – when was the last time we saw a Bank share leap nearly 75% in value on a single day?) saw Europe take the lead and give Wall Street a boost on opening. US stocks’ recent roller-coaster trading ended at a high with strong support when Pfizer’s announced its final plans for their $68 billion takeover of Wyeth. The rally was underpinned by strong economic data with an unexpected increase in existing US home sales. These factors were just enough to offset further grim corporate news, including a very glum report from Caterpillar (which included an announced 20,000 job losses). The Nikkei continued the trend this morning though with the index showing a near 5% advance, aided by news the Japanese government is to offer funds to firms whose cash raising ability has been hit by market dislocations.

Data as a whole was sparse again yesterday and attention was drawn to the Economic Forum in Davos. The fact that none of the A-Team from the US (the new President included) will be present – they are too busy with domestic issues – devalues the whole event somewhat. Expect the participants who are there to attempt to compensate for this by being more high-profile in both opinion and comment.

Today we are again scrabbling around for meaningful releases. The German IFO index will take top spot this morning with predictions that the number might hit an all time low below 79.0 pointing towards a very sharp recession indeed and shifting the outlook for the whole Eurozone down a notch or two. This is followed by another CBI survey from the UK – this time a survey of retailing for January which is expected to be (hoped to be) slightly better than previous. I would look for a similar result to December however when retail volumes rose but heavy discounting led to a diminishing of value of sales.

From the US this afternoon we get the first in a series of consumer confidence indicators. With the recent surge in announced job losses, it is difficult to see how these numbers can be positive – we will hopefully be surprised.

After hours we get the Canadian budget presentation at the reconvening of Parliament following a 7-week hiatus. This might not sound too interesting but with political power hanging in the balance, a rejection of the budget will bring down the ruling Government and likely lead to a minority government being formed. Add this to the continuing decline in interest rates and the already announced huge rise in borrowing and we get the scenario for a sharply weaker Loonie in the weeks ahead.

Yesterday saw the first (and hopefully last) Government casualty of the recent Global Financial Crisis with the collapse of the Icelandic administration. The problem appears to be that there are no obvious candidates to take up the ‘hot potato’. Not a good omen for the country or currency.

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Currencies Direct & Forex trading

Currencies Direct &

Forex trading

Edward Kirwan, BSc Hons, is an independent professional Investment Portfolio

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overseas are all an important elements of this business.

Contact Edward Kirwan by e-mail: enquiries@invest-in-overseas-proper

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