MORNING BRIEFING: FOMC - property threatened by the end of the MBS program.

[RTFX-Trading]

MORNING BRIEFING: FOMC - property threatened by the end of the MBS program.

What’s new :
Japan: finance minister wants a weaker Yen.
Germany: Retail sales down by 1.10% in November.
FOMC: property threatened by the end of the MBS program.
Oil: up 2% in NY.
United States: activity in the service industry rebounds in December.
United States: 84,000 jobs destroyed in private sector in December (ADP).
Euro Area: service sector at its highest since 25 months.
France: Sarkozy declared that the disparity in the Euro-Dollar is a problem.

Today:


Rates in Asia and Indices:
EURUSD: 1.4447 - 1.4355.
USDCHF: 1.0319 - 1.0242.
EURUSD: 1.6058 - 1.5943.
EURJPY: 133.38 - 132.39.
USDJPY: 92.86 - 92.11.
Dow Jones: 10'573 +0.02%.
NASDAQ: 2'301 -0.33%.
S & P 500: 1,137 +0.05%.
Nikkei: 10’681 -0.46%.
Shanghai: 3'225 -0.88%.
Gold: $1'133.
Crude oil: $82.66.

Comments:
Although the minutes of the last meeting of the Monetary Policy Committee of 15th and 16th December have hinted that further measures to support the US economy are not excluded, the Dollar is stable against its main rivals. The Fed is concerned about the depressed labor market and wondered if the end of the program of mortgage-backed security (MBS) would not jeopardize the recovery of the housing market. This record left in hearing that the Fed will not raise interest rates faster than expected.

The Japanese Yen was heckled this morning sharply lower following the review of the Japanese finance minister who wants a weaker Yen. The Yen fell to 92.65 against the Dollar, to 133.15 against the Euro and to 148 against the Pound Sterling.

Today, the Bank of England will announce the status quo of the monetary policy or interest rates and the redemptions of assets will remain unchanged.

I expect major moves on the Euro/Dollar, the noose is tightening! 1.4280 (Bear Flag) and 1.4240 (moving average 200 days) are the strong supports and 1.4500 (Bear Flag) is the strong resistance. Those points have to be watched carefully over the coming days. Personally, I favor a drop in the EUR/USD.

Have a good day.

Nicolas Longchamp
RTFX Ltd
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