Forex Market Updates & Commentary

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• US New Home Sales Month over Month Drop
• The ECB bought 3.9 billion of bond purchases in the last week
• Feds Sarah Raskin additional policy accomodation is warranted
• The NY Morning Forex Commentary for September 26th 2011
• Chicago Fed National Activity Index Worsens to -0.43 From -0.06
• ECB considers covered bond purchases and rate cut at the next meeting
• ECB’s Knot
• BOE’s Broadbent
• German Ifo business climate 107.5; better than expected.
• ECB’s Nowotny says ECB interest rate cuts cannot be exluded, should not further expand its non-standard measures tool-kit.
• ECB’s Mersch
• 9-26 Calender

US New Home Sales Month over Month Drop Posted: 26 Sep 2011 07:01 AM PDT New Home Sales:   Survey: 293K     Actual: 295K     Prior: 298K      Revised:  302K New Home Sales (MoM):  Survey: -1.7%     Actual: -2.3%     Prior: -0.7%     Revised:  -0.3%

The ECB bought 3.9 billion of bond purchases in the last week Posted: 26 Sep 2011 06:31 AM PDT This was less than the 10 billion that was expected.

Feds Sarah Raskin additional policy accomodation is warranted Posted: 26 Sep 2011 06:16 AM PDT Considerabel uncertainty on effects of Fed actions Operation twist should bring down long term yields Excess housing may limit effects of Fed actions Tighter credit may limit effects on policy Effects of monetary easing should not encourage Fed August employment was bleak

The NY Morning Forex Commentary for September 26th 2011 Posted: 26 Sep 2011 05:33 AM PDT

Chicago Fed National Activity Index Worsens to -0.43 From -0.06 Posted: 26 Sep 2011 05:33 AM PDT

ECB considers covered bond purchases and rate cut at the next meeting Posted: 26 Sep 2011 04:30 AM PDT

ECB’s Knot Posted: 26 Sep 2011 02:59 AM PDT Calls for automatic sanction and compulsory recovery programs for Euro-zone countries with high deficits. Decision making for sanctions should go to independent budgetary authority, not the ECB. Calls for more effective tax measures, budget cuts and market reforms for south European states. Greece is not a hopeless case, as with privatizations, state debt would be cut to manageable proportions. Sees common Euro-bonds are inevitable. Does not support a write-off of Greek debt.

BOE’s Broadbent Posted: 26 Sep 2011 02:56 AM PDT Re-balancing of UK economy to take longer than the 1990′s, 3-4 years and more QE. Monetary policy isn’t powerless, but shouldn’t be viewed as cure-all. QE is less powerful than it would be if banking system was stronger. The distinction between QE and cutting rates is sometimes overdone. Purchase of government bonds with central bank money is preferable form of QE. BOE has discretion about how quickly it gets CPI back to target. Without risk-taking, hard to reallocate capital. We’ve been removal of capacity in the economy. No limit to size of BOE asset purchases. Euro-zone will have influences on UK monetary policy. Trade off between scale of QE and uncertainty about its impact. MPC is in a better position than 2 years ago to judge right scale of QE.

German Ifo business climate 107.5; better than expected. Posted: 26 Sep 2011 01:03 AM PDT

ECB’s Nowotny says ECB interest rate cuts cannot be exluded, should not further expand its non-standard measures tool-kit. Posted: 26 Sep 2011 12:45 AM PDT

ECB’s Mersch Posted: 26 Sep 2011 12:19 AM PDT The ECB is independent. We are determined not to let markets slide into a dysfunctional state and Europe is showing it is able to deliver its promises. Wild expectations about ECB rate cut show some people a loss in direction. Does not see unified European economic government in the near term, but need to make EUR work according to paper.

9-26 Calender Posted: 25 Sep 2011 10:54 PM PDT

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