Forex Investment and Currency Trading

The focus today is on the Chinese stimulus package that was announced over the weekend, and the comments coming out of the G20 meeting this past weekend. G20 finance ministers and central bankers spoke dovishly on interest rates and advocated taking further action. We could see more concrete measures come out of this coming weekend’s meeting of G20 heads of state. China’s stimulus package sent a wave of optimism through the markets, with equity markets up in Asian and Europe, equity futures up in North America, and commodity prices up across the board. Yen crosses are all higher as risk appetite is back, at least for now. In these markets sentiment can change on a dime, as we’ve seen several times over the last couple of weeks. There is no US data out today, but the Treasury’s Kashkari will be talking about the TARP program today at 10AM. There is some speculation that the program will be opened up to non-financial firms (like GM), so we’ll be watching to see if Kashkari addresses that question.
Data

• Australia’s owner occupier housing finance numbers fell by 2.7% in September, marginally less than the 2.8% decline expected by the market. This was the eighth consecutive monthly decline, a reflection of high effective interest rates and low affordability. The November edition of the RBA’s quarterly Statement on Monetary Policy was more downbeat on the global and Australian economies than the previous version, reflecting the fact that “world financial markets have come under severe stress since in the period since the last Statement”.
• Japan’s core machinery orders were up 5.5% M/M in September, taking back some of the prior month’s 14.5% drop. However, Q3 was still the worst quarterly performance for core machinery orders in more than ten years with a 10.4% decline.
• UK PPI for October was much softer than expected, with input prices up 13.8% Y/Y (down from 24.0% in September) and output prices up 6.8% (compared to 8.5% in the prior month).