FOREX TRADING

Highlights

• Trading the potential jump in risk appetite
• Greece needs budget reform to win back confidence
• UK politics/economics may be turning favourable for GBP

Trading the potential jump in risk appetite

The 1Q earnings season kicks off next week and if the last reporting season is any indication, it should have significant implications for risk appetite. 4Q earnings were viewed as constructive for the markets as they showed the first semblance of organic growth. In other words, all of the earnings were not based on cost cutting alone but also a smart pickup in top-line activity. While cost cutting did dominate and helped overall earnings beat expectations by more than 5% in 4Q, sales figures also impressed to the upside by nearly 2%.

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Dow -102 S&P -11.7 NASDAQ -22.2

ECONOMIC DATA

(RU) Russia Dec Official Reserve Assets: $439.0B v $441.8Be

(CL) Chile Dec Copper Exports: $3.2B v $2.9B prior

(IS) Israel Dec Consumer Prices M/M: 0.0% v 0.3%e; Y/Y: 3.9% v 4.2%e

(PD) Poland Nov Trade Balance: -€292M v -€750Me; Current Account: -€1.2B v -€975Me

(CA) Canada Nov New Motor Vehicle Sales M/M: -7.0%e v 3.5% prior

(US) Dec Consumer Price Index M/M: 01% v .2%e; CPI Ex Food&Energy M/M: 0.1% v 0.1%e; CPI NSA: 215.949 v 216.000e

(US Jan Empire manufacturing: 15.92 v 12.00e

(BE) Belgium Nov Trade Balance: €1.9B v €0.9B prior

(US) Dec Industrial Production: 0.6% v 0.6%e; Capacity Utilization: 72.0% v 71.8%e

(US) University of Michigan Confidence: 72.8 v 74.0e

(MX) Mexico Central Bank Interest rate leaves Overnight rate unchanged at 4.50%; as expected

JP Morgan’s disappointing earnings report is hammering US indices this morning. Investors have all but forgotten Intel’s hot quarterly report from yesterday. The final CPI reading of 2009 showed that consumer inflation was tame last year, with prices rising 2.7%, following at 0.1% increase in 2008. The January Empire Manufacturing was better than expected, with very strong growth in the prices paid (hit a one-year high) and new orders components. (more…)