Releases from Australia:
Forecast Actual
February Home Loans (MoM) +0.5% - 5.9%
February Investment Lending (MoM) - 9.5% Global fears have certainly reached the Australian shores as home and investment loans crashed over February and will probably also be accompanied by a general fall in consumer confidence also. It stacks up the evidence of a global consumer sentiment that is hovering over the panic line which could generate a much stronger global turndown as monthly household spending is curtailed while inflation and high energy prices sucks the life out of spending on other goods and services.
The Bank of Japan published the minutes of the 6th-7th March Monetary Policy Meeting which summarized the fragility of the global economy which would have a dampening impact on the Japanese economy.
They noted that production, which holds the key to the sustainability of the virtuous cycle, recently turning more or less flat, that "it was too early to conclude that the recent developments suggested a change in its (rising) trend, but careful attention should continue to be paid". "In this situation, it was appropriate to carefully examine economic and financial developments at home and abroad and to grasp the situation more accurately," it said. These comments have now been overtaken by the Tankan Report 2 weeks ago which caused a downgrading of the economy.
The following economic releases are due today:
February
Euro-zone Industrial Production (MoM) +0.2%
U.S. Business Inventories +0.5% March
Bank of France Business Sentiment 106.0
U.K. PPI: Input (MoM) +1.9%
U.K. PPI: Input (YoY) 19.3%
U.K. PPI: Output (MoM) +0.5%
U.K. PPI: Output (YoY) +5.6%
U.S. Advanced Retail Sales (MoM) +0.1%
U.S. Retail Sales less Autos (MoM) +0.2%
Dollar losses were seen on Friday and a spike higher on open this morning. I’ll basically point out the situation in the Euro which seems central to the picture for the Dollar, and which I described on Friday. There are three basic patterns I am looking at.
The first is a direct bullish Euro picture that will send it straight back above 1.5912 and which I feel has potential to either 1.5985 or possibly as high as 1.6065. The second is a flat correction that would send it back to the 1.5340 area before back above 1.5912. Finally the last option is that the 1.5912 high was a stunted final wave. For this again we should see a move down to 1.5340 but then a decisive break. Now which? Well, if I consider the fact that the Swissie held up quite well and the Pound does look decisively bearish I may even begin to get swayed to the third option – that we’ll see stronger Dollar gains. I’ll just make a mention of the G7 conference references to Forex rates. Frankly I think it is still more words than action and therefore it is indecisive. Certainly it doesn’t reverse the poor U.S. figures and without action could easily be forgotten by the end of the week. Will there be concerted central bank intervention? Well, recent comments suggest they don’t really consider it a realistic option. The only niggling thought in the back of my mind is that this financial crisis is nothing like we’ve seen for a long while. If these officials consider that a continuing weak Dollar could threaten to worsen the basic financial situation then it could be a tool they would use in the short term to smooth out the moves somewhat. So with this in mind, watch the break levels – we are very close to the Dollar making further gains and if so then I’ll begin to watch the second scenario looking for the Euro to retest the 1.5340 area. Beyond that I’d want to get other confirmations that there is a bigger chance of this following through.
Note important support and resistance areas:
USDJPY EURUSD USDCHF GBPUSD
Res: 102.56-93 1.5854-87 1.0171-17 1.9842-48
Res: 101.60-97 1.5729-52 1.0088-25 1.9746-67 Spt: 100.30-40 1.5653-91 1.0025-25 1.9605-48
Spt: 99.34-60 1.5587-94 0.9902-49 1.9505-46 | 
