Forex News & Currency Analysis

Here are finexo market news and updates…..

• FX: USD continues higher, now below 1.4. Watch the 50% Fibo-level at 1.3840 (our end of week target).

• Fixed Income: Large ranges in the 10-years, but generally unchanged. JGB’s still under pressure, though.

• Stocks: US moderately higher, European session down around 0.5%. APAC session generally down almost 2%.

• Commodities: All commodities under considerable pressure due to USD strength.

• As USD strength has seen the EURUSD dip below a key 1.40 barrier, the Dollar Index has risen back above the 80 level, first time since September 2007.

• Looking at the Fed Funds implied probabilities, 96% probability is currently given to unchanged rates of 2.00% on next FOMC rate decision on 16th of September.

• After yesterday’s announcement of the biggest-ever quarterly loss its 158-yr history, Lehman Brothers has chosen to resort to a majority sales of assets in its asset-management unit as well as a spin-off in real-estate holdings to gain confidence and raise needed capital. It remains to be seen whether these actions will be sufficient to keep the company going.

• US banks are tightening their lending policies. Consumer credits in the US fall in July to $4.6 billion (vs. survey $8.5B and a revised $11B in June). Consumer spending, which 2/3 of US GDP, will be under increased pressure.

• Lehman Brothers shuffled its top ranks for the third time in four months. This eroded the confidence of the markets that the financials are nearly through the subprime crisis. A couple of analyst of big investment banks revised their earnings forecast for the banking sector down again.

• Asian stock giving up some of the gains from yesterday on concerns that global economic growth is slowing and the demand for materials and shipping will be hurt by that. Financials were under pressure due to the Lehman Brother story.

• Treasuries took back most of the giant losses from Monday. In other words, the bond market is still keeping a skeptical stance.

Markets

• FX: USD continues strength after a breather yesterday morning. EURUSD down 9 straight days in a row.

• Fixed Income: Treasuries and Bunds in a strong comeback. JGB’s looking really unhealthy, though.

• Stocks: European session generally up 3-4%. US up +2%. APAC session erasing yesterday’s gains, down 2%.

• Commodities: Silver continues to edge lower, gold holding up relatively well. Crude edging lower, to $105/bbl.