Weekly Economic and Financial Commentary

U.S. Review

Approaching Stall Speed

This week's economic reports show economic activity stalling out in the first quarter. Home sales continued to weaken and factory orders fell sharply after rising solidly in the previous month. First-time claims for unemployment insurance also increased significantly and are now running at a level consistent with real GDP growth between zero and 1 percent. We continue to believe the U.S. will narrowly avoid a recession. Narrowly is the key word. Our forecast calls for real GDP to grow at just a 0.2 percent pace in the first quarter and for growth to pick up to a 0.8 pace in the second quarter. The risks are to the downside, even with this modest growth forecast.

Inventories are one key area of concern in the first quarter. The revised fourth quarter GDP data show inventories falling $10.1 billion. We know output of motor vehicles fell sharply in January, as the major manufacturers shut down assembly lines to work off excess inventories. The net result could be a much larger inventory drawdown. If that were to occur, first quarter real GDP would likely dip into negative territory.

Still No Recession But It Is A Very Close Call

January's personal income and consumer spending figures tend to support our case for a stall in economic growth and no net decline. Personal income rose 0.3 percent in January and consumer spending rose 0.4 percent. Inflation rose 0.4 percent too, however, which means that spending was unchanged after adjusting for inflation. This marks the second straight month that real personal consumption outlays were unchanged and the third time in the past four months. Spending is being constrained by higher food and energy prices, which are leaving consumers with less money to spend on other items.

The flat personal consumption numbers do not necessarily spell doom for the economy in the first quarter. If real outlays rise just 0.1 percent in February and March, spending will increase at a 0.8 percent pace in the first quarter. Such an outcome seems reasonably likely at this time.

Autos, Jobs and Housing

The cutbacks in auto production were clearly evident in February's Chicago Purchasing Managers' reports. The headline index fell seven points in February to 44.5, a level not seen since December 2001. Weakness was also present in the sub-indices as production dropped while new orders remained below the key 50 level for the second straight month. Today's report is consistent with the overall readings we have seen in other regional purchasing managers' surveys, notably the Philly and Empire reports. It appears we are likely to see another sub-50 reading in next week's national ISM manufacturing survey.

First time claims for unemployment insurance increased 19,000 the week ending February 23rd. As a result the four-week moving average, which helps take some of the volatility out of the weekly numbers, remained elevated at 360,500. Since the start of the year, the trend in initial claims has clearly been rising. While we expect non-farm employment to register a modest rebound in February, the outlook is one of a labor market that will continue to soften in the months ahead.

Mortgage applications have fallen sharply over the past two weeks, reflecting a slight up-tick in mortgage rates. Rates remain low, however, and will likely drop in light of the recent weak economic news. A recovery in housing in many depressed areas will take most of 2008 and even then the stability of construction will be accompanied by uncertainty on prices.

U.S. Outlook

ISM Manufacturing Index • Monday

After posting its first sub-50 reading in eleven months, the Institute for Supply Management's manufacturing activity index rebounded to 50.7 in January from December's 48.4 reading. Now equally weighted between the five subcomponents, a surge in the production index drove the overall result in January.

Regional purchasing manager indices have fallen substantially in February and suggest we could see another sub-50 reading in the national index. The continued lift from strong export growth, however, will limit any downside change. U.S. exports growth is very strong given the weak dollar and solid global growth outside of the U.S.

Sluggish overall domestic demand is expected to weigh on factory production in the first half of the year. Supportive global economic activity, however, should help offset some of this weakness.

Previous: 50.7
Consensus: 48.5
Wachovia: 49.7

ISM Non-Manufacturing Index • Wednesday

All eyes will be squarely focused on the release of the newly calculated ISM non-manufacturing index for February. January's jaw-dropping reading of 44.6 (41.9 for the old index) surprised everyone and sparked fears of stagflation.
While we agree there appears to be moderation of business activity in the service sector, we have not found the supporting evidence from other indicators that would support a drop of this magnitude. We expect to see a moderate bounce back in headline index in February to 48.1.

Economic data so far this quarter suggest little, if any, growth in real GDP. Second quarter growth should bounce back but we will likely not see any significant change until the third quarter when checks from the fiscal stimulus package arrive in taxpayers' mailboxes. Don't expect consumers to suddenly get fiscal religion – those checks will more than likely be spent.

Previous: 44.6
Consensus: 48.0
Wachovia: 48.1

Employment Report • Friday

Falling for the first time since August 2003, nonfarm payrolls declined by 17K in January as only the retail, health, education and leisure sectors added workers. For the year, payrolls rose by 1.137 million marking the slowest annual increase since 2003. The unemployment rate slipped a tenth of a percentage point to 4.9 percent.

Initial unemployment claims, one of the best leading indicators of employment, continues to trend higher. The four-week moving average has jumped to 360.5K, a level not seen since October 2005. Our model has February employment growth at +48K and the unemployment rate at 4.9 percent.

Employment growth is slowing. But firings have not increased in most industries. We expect employment growth to continue to weaken in the first half of the year which should lift the unemployment rate towards 5.5 percent.

Previous: -17K
Consensus: 40K
Wachovia: 48K

Global Review

Dollar Tumbles to All-Time Lows

As shown in the graph at the left, the euro rose to an all-time high versus the dollar this week. In addition, the U.S. dollar also fell to multi-year lows against the Australian dollar, the New Zealand dollar, and the Swiss franc. What's wrong with the greenback? Is more weakness yet to come?

Let's start with the first question. As noted above, the greenback declined broadly this week, suggesting that the root cause of the dollar's woes was something specific to the United States (see top chart on page 4). In that regard, U.S. economic data have generally been weaker than expected over the past week or so (e.g., Philly Fed, consumer confidence, and durable goods orders.) The weaker-than-expected U.S. data have increased the odds of recession, which have led investors to expect more Fed easing than they did a week or two ago. Indeed, the U.S. yield curve is currently priced for 100 basis points of additional Fed easing by summer. As U.S. interest rates have declined (e.g., the yield on the 2-year Treasury security has dropped more than 30 basis points since the middle of last week), the relative attractiveness of U.S. fixed income assets have deteriorated.

There are also some currency-specific factors at work as well. In terms of the euro, economic data in the Euro-zone generally have surprised to the upside over the past week or so. For example, the Ifo index of German business sentiment bounced up in February, which was contrary to the widespread expectation of a decline (see middle chart). In addition, the number of unemployed German workers fell more than expected in February, and anecdotal evidence suggests that retail spending in the Euro-zone strengthened in February.

In general, the overall pace of growth in the Euro-zone has slowed over the last quarter or two. However, recent data suggest that the Euro-zone economy has not fallen completely apart either. In addition, inflationary pressures in the Euro-zone have risen recently, which has the European Central Bank very nervous (see middle chart). Unless the economic outlook for the Euro-zone were to deteriorate rapidly, the ECB is likely to keep rates unchanged in the near term. As interest rate differentials between the Euro-zone and the United States have moved in the favor of the former, the euro has been given a lift.

Whither the dollar? Traders are fond of saying “the trend is your friend”, and the trend is obviously not in the greenback's favor at present. The dollars/euro exchange rate has broken through an important technical resistance level and currently is in terra incognita. The dollar could clearly continue to lose value in the near term versus most major currencies.

However, we continue to stick by our forecast that by the end of the year the dollar will be stronger versus most major currencies than it was at the beginning of the year. If, as we expect, the U.S. economy narrowly misses recession, then the Fed's easing cycle will come to an end by summer. At that point investors will start to speculate about the timing and the magnitude of the coming tightening cycle. As U.S. long-term interest rates rise, the relative attractiveness of U.S. assets will improve and the dollar should strengthen.

Global Outlook

Canadian Real GDP • Monday

The Canadian economy hummed along through most of 2007, but many monthly indicators suggest that growth weakened noticeably in the fourth quarter. Indeed, the consensus forecast anticipates that the annualized growth rate slowed from 2.9 percent in the third quarter to only 1.0 percent in the fourth quarter.

The information contained in the GDP report will help to guide the Bank of Canada's policy meeting on Tuesday where another rate cut is widely expected. If the GDP data are soft enough, the Bank could conceivably cut rates by 50 basis points. A bright spot in the Canadian economy is the unemployment rate, which currently stands at 5.8 percent, the lowest rate in decades. The labor market report for February will be released on Friday. Too bad the Bank of Canada won't have the information when it makes its policy decision on Tuesday.

Previous: 2.9% (annualized)
Consensus: 1.0%

U.K. PMI's • Monday and Wednesday

The effects of previous monetary tightening, slower growth in most of the world's major economies, and fallout from credit market dislocations have led to slower growth in the U.K. economy. The purchasing managers' index for the manufacturing sector, which will be released on Monday, and the service sector, on the docket on Wednesday, will provide some clues about how the economy performed in February. Although we expect that the Bank of England will remain on hold on Thursday (see below), further slowing in growth, which we expect the PMIs to signal, should lead the Monetary Policy Committee to ease policy further in the months ahead.

Previous (Manufacturing): 50.6
Previous (Services): 52.5

Central Bank Policy Meetings • Thursday

Next week is a busy week for some of the world's major central banks. As noted above, the Bank of Canada meets on Tuesday. We look for the Bank to cut rates by 25 basis points. The focus then moves to Europe where the European Central Bank and the Bank of England meet on Thursday. In our view, there is a very low probability of a rate cut by the ECB on Thursday. Indeed, most ECB policymakers believe that the major risk facing the Euro-zone economy at present is inflation. The probability of a rate cut on Thursday by the Bank of England is a bit higher, but well below 50 percent. The Monetary Policy Committee has eased by 50 basis points since December (the most recent 25 basis point cut occurred on February 7), and recent inflation data seem make to make an aggressive pace of easing not very likely

Current ECB Policy Rate: 4.00% Wachovia Expectation: 4.00%
Current BoE Policy Rate: 5.25% Wachovia Expectation: 5.25%

Point of View

Interest Rate Watch

Fed Easing Does Not Solve All the Problems

Interest rates are the price of credit, not money. Inflation is the product of too much money. Lower interest rates can be associated with a decline in the availability of credit. Such are the lessons, learned anew, by another generation of financial engineers and masters of a smaller universe.

Interest Rates as the Price of Credit, Not Money

For the past five months the Federal Reserve has been lowering the funds rate, which is an administered rate set by the Fed, yet we have seen that free market rates on private sector instruments have actually risen relative to default risk-free Treasury rates. By lowering the funds rate and pursuing an innovative Term Auction Facility, the Fed has improved market liquidity as represented by declines in the TED as well as Libor/Fed funds spreads.

However, liquidity is not credit nor is it bank capital. Pricing credit is increasingly difficult in an environment when uncertainty, more than risk, is ever more present and bank capital is increasingly being hoarded. In this type of an environment, a quick return to sustained economic growth is likely to be more difficult than commonly asserted. A blip in third quarter GDP due to a fiscal stimulus package does not represent sustainable growth.

There should be little wonder that discrete changes in the federal funds rate do not generate instant economic stimulus when faced with wholesale declines in bank capital and credit downgrades as well as counterparty uncertainty. Discovering the new risk/reward equilibrium is a process not an instant revelation.

Topic of the Week

Could Subprime Tremors Shake Commercial Real Estate?

The abrupt collapse of the subprime mortgage market and severe correction in home construction and home prices have raised concerns the same thing could happen to commercial real estate. While a correction is clearly underway, the underlying economics of commercial real estate are still fairly solid so we do not expect a sequel to the housing collapse.

Commercial real estate saw a more gradual build up of demand than residential. The high value of commercial properties along with rising property prices and more stringent growth management laws increased the barriers to entry into the business. Even with these barriers, plenty of liquidity still found its way into the industry, particularly through REITS and private equity firms. Most of these dollars, however, went into existing properties.

The unwinding of the real estate boom spurred slower economic growth, higher borrowing costs and tighter lending standards, which is making it much tougher to secure financing. With less demand, mortgage lenders pulled back considerably and investors have turned much more cautious shunning not only residential, but anything real estate related including commercial real estate. These factors will eventually affect commercial construction and fundamentals. While cap rates and vacancy rates have moderated, current market conditions will begin to put upward pressure on cap rates which will cut into leasing activity. More specifically, office and retail properties will feel more of the brunt due to slower employment and consumer spending.

PDF Format

Wachovia Corporation

Forex Charts: Make This Critical Error And Your 100% Guaranteed To Lose!

If you want to make money with technical analysis and forex charts you can - but you mustn't make this common error - most forex traders do and it will lose you money - Guaranteed. Let's look at this error how to avoid it and a better way to make money with forex charts.

The most common error of all is trying to predict forex prices in advance.

You cannot predict!

If you do, you are simply hoping or guessing where prices may go and that won't make you money in anything let alone forex trading. You need to trade on CONFIRMATION only - let's look at this in more detail.

A trader will see a price approach a level of support and buy just above it, thinking they are getting in at a good price - but it's only a good price if the level holds.

All he is doing is guessing what might happen and will lose.

Predicting forex prices is about as accurate as your horoscope so let's look at how to trade on confirmation.

What you need to do is this:

Wait for prices to approach support and get ready to buy - but don't execute your trading signal until you see a clear turn in price momentum. When price momentum has turned then you buy.

Sure you miss the exact bottom - but you wouldn't know that in advance anyway so there is no point in trying to predict. If you trade on Confirmation with momentum you have the odds on your side and that's the only way to trade and enjoy forex success.

How Do You Check Momentum?

You need some momentum indicators and 2 of the best are the stochastic and Relative Strength Index (RSI) how they work is discussed in our other articles in more detail.

I have seen people predicting prices and they have big profitable track records!

Of course you have but there not real and will always have this disclaimer on them:

"CFTC RULE 4.41 - Hypothetical or simulated performance results have certain limitations. Unlike an actual performance record, simulated results do not represent actual trading. Also, since the trades have not been executed, the results may have under-or-over compensated for the impact, if any, of certain market factors, such as lack of liquidity. Simulated trading programs in general are also subject to the fact that they are designed with the benefit of hindsight. No representation is being made that any account will or is likely to achieve profit or losses similar to those shown".

Of course anyone can make money in hindsight but that's not predicting the future!

You can't predict forex prices so don't try - make sure you trade the odds on your forex charts and trade on confirmation - You will find your forex trading strategy will make bigger profits!

Currency Trading Basics: 4 Critical Points To Consider Before Trading

Here we want to look at currency trading basics and some points which will answer the question: could you win at currency trading? There are 4 points to consider and if you think you can master them, you can enjoy currency trading success.

1. You and Profits

Only you can make yourself successful no one else can.

Sure you can get knowledge from others - but you must learn and apply it by creating your own forex trading system.

A word of warning:

You will see numerous mechanical forex trading systems sold on the net, with simulated track records and none of them will make you money - they all lose. So forget them. The track records are meaningless as they have never been traded - don't be tempted to try them!

You're on your own - but that's the only place to be, if you want to enjoy currency trading success.

2. Working Smart

You don't get paid for effort in forex trading you get paid for being right with your trading signal and that's it.

You can learn all you need to know in about 2 weeks and you're done. It's a fact everything about successful forex trading can be specifically learned by anyone.

This was proved by trading legend Richard Dennis, who taught a group of people to trade in 14 days and they went on to make $100 million! Yes, forex trading is a learned skill - so where do you get the best education?

Well you can get a ton of free info on the net and you should also take a look at some books by the great traders from Amazon.

The best way to trade is to use a simple system, based upon forex charts but keep in mind - nothing complicated!

Simple trading systems work best, as they are more robust in real time trading with fewer elements to break.

Learning a trading method yourself is essential, as you will know how and why it works and this will give you:

3. Confidence

If you do not have confidence in what you are doing, you will never acquire the vital trait all traders' need - discipline.

Most traders who trade don't have confidence in what their doing - they follow news stories or other traders systems and when they hit a few losses, they throw in the towel.

You need confidence to allow you to accept short term losses as a natural part of making big longer term profits. No trading system is perfect, so you need to have confidence when you hit a bad spell.

4. Discipline

Confidence will give you discipline the vital trait all successful traders have.

To be successful you must follow your currency trading system with discipline and execute your trading systems to the rules of the system- through good times and bad.

If you don't have the discipline to follow your trading system you don't have one!

Finally ...

Forex trading is 25% method and probably 75% attitude.

The reason most traders fail is they simply cannot accept responsibility for their actions and blame everyone else - from their broker, to the wife for putting them in a bad mood!

If you are not prepared to accept responsibility and create and understand a framework of rules, you have the confidence to follow with discipline, then you need to forget forex trading and do something else.

Forex trading has huge rewards and is a big boys game and not for cry babies.

So if you understand the above and what you need to do and you're up for the challenge, then welcome to the world of currency trading!

We hope our quick review of the currency trading basics above help you on the road to currency trading success.

Forex Education: What is The Best Time Period to Trade for Profits?

One of the basics of your forex education is deciding the time span you want to trade in. Sure there are forex trends - but they occur in short, medium and long term time spans but which of these are the best to catch for bigger profits - let's find out.

Forex Day Trading and Scalping

By far the most popular way of trading for novice traders but it's doomed to long term failure - Why?

Because all short term volatility is random and support and resistance levels are not valid you can't get the odds in your favour longer term and you will lose.

Think about it:

Countless millions of traders are trading all with different aims, objectives and skills and to say you can tell what they are going to do in short time spans is rubbish.

You will see a lot forex scalping and day trading systems sold that claim to make money but check the track record and it will say simulated in hindsight and we can all do that!

If you want to learn currency trading, the first thing you need to do is forget day trading.

Forex Swing Trading

Swing trading catches moves that last for a few days to around a week and it's very popular and can be profitable.

This is a great way for novices to start trading because it's exciting, fun and requires very little mental discipline. Profits and losses come quickly and there is plenty of action - you know if you are right or wrong quickly and you can put together a forex swing trading system quickly that is robust and will make you money.

If you like action and are not patient then this is the method for you.

Forex Trend Following

The longer term trends last for weeks, months or years and if you can catch them you can pile up huge gains but be warned you need to be patient to catch the right opportunities and you need discipline and the courage to accept big gains.

If you have the traits of discipline and patience this method can be the most rewarding of all but most traders can't do it.

Why?

Because when they get a profit they get excited and the bigger it gets the more they want to bank it before it gets away. Of course, a trend doesn't just go one way and there are plenty of pullbacks that eat into open profit and watching your equity dip short term by thousands of dollars can be very hard! In the end most traders simply cannot hang on and bank a marginal profit where they could have had a huge one.

Keep in Mind.

You can choose forex swing trading or long term trend following or of course you can mix them both, so think carefully which one suits your personality, before incorporating it into your forex trading strategy.

You can't get the odds in your favour with a forex trading system that trades short term so don't even try it. You need to trade the odds so choose long term forex trends and go for them or swing trade - both work and can bring you currency trading success.

U.S. Market Update

Dow -30 S&P -0.6 NASDAQ -8.4

The new week is offering the same old story for financial markets. The greenback remained under pressure in early trading while commodities made another run at historic highs. April crude traded above its all-time inflation adjusted high of 10.376 early in the NY session. Indices continue to head lower after overseas markets slid, led by a 4% drop in the Nikkei. The XLF is down another 2% now a little more than a dollar from the January lows. Airline stocks are losing altitude for the fifth straight session. Equity futures did catch a bit of a bid after December ISM data met expectations, albeit at a five-year low. Metals futures are up another 1-2%, but they have backed off new all-time highs after the Dollar found a little traction following comments from several European government officials. April gold briefly traded above $990. Metal and Mining names continue to move higher. FCX +3% PCU +2.3% AA +2% NEM +2.7% Treasury prices are modestly lower with the long bond future off half a point yielding 4.44%.

Some comments from European officials helped to take the USD off its all-time lows against the Euro and the Swiss Franc pairs. The EU's Juncker made the strongest statement that he was increasingly concerned about high Euro levels. EUR/USD tested 1.5275 just prior to Juncker's comments, while USD/CHF probed the 1.03 area. The Dutch Finance Minister Bos later joined the chorus noting that the strong Euro does not reflect economic fundamentals. The ECB's Trichet reiterated that the US has affirmed its desire for a strong USD policy. Prior to this verbal intervention, the theme of higher commodity prices and weaker USD as NYMEX oil and spot gold hit fresh all-time highs of $103.96 and $989.55 respectively. Carrry-related currency pairs were off the opening lows seen in Sydney and Tokyo as risk aversion themes continued to impact the JPY and CHF crosses. The USD/JPY tested three-year lows at 102.60 before rebounding towards the mid 103 area. European fixed-income retraced its earlier gains after the Feb ISM manufacturing data managed to meet market expectations. March Bund is up 10 ticks at 117.16, Mach Gilt is up 1 tick at 110.45 European equities are in the upper end of their session trading range, aided by the post ISM equity rally. Euro-Stoxx 50 -1.35 at 3,647; FTSE -0.6% at 5,846; CAC-40 down 0.9% at 4,747, DAX at 6,677 -1% for the session.

Trade The News Staff
Trade The News, Inc.

Nissan Skateboard

Everybody know: "Who announces sells more than those who do not announce". Anyway announcing has not been the unique key to get new clients, today the quality of advertising really matters. See this propagando published by Nissan about Nissan Qashqai. Really amazing. :)



I hope you have enjoyed!

Banking Around the World

Does an Italian bank use a business process management tool and other technically advanced software like your bank in the USA? When did banking begin, and in what country? How does the USA compare in world rankings? Read on for a brief overview of world banking and statistics. The facts may surprise you.

Islamic banks forbid earning interest. Following Islamic code, banks must strictly rule out accumulating interest and instead earn profit from service and handling fees. China ranks #1, #2, and #3 in the world for bank market capitalization. The USA comes in at #5, following the UK. That's right, both China and the UK are beating the USA in that category of finance.

Anyone who has handled a bank account in another country knows that banking processes are not all the same. Although most Americans prefer to think of their bank as a trusted government-like institution, banks are in fact just another sector of business. Banking abroad can put an American into an extreme state of "culture shock" after they are slapped with hidden fees and unusual requirements. Despite including moments of sheer terror, banking in another country can pad your pocket book, too. Lower interest rates and tax exemptions are reasons why the rich take their money offshore.

Banking traces back to the ancient Roman Empire, where moneylenders would set up tables in the middle of cozy courtyards, eating grapes and trading coins. The word bank comes from the Italian word banco, which means "desk." These desks were merely the vessel for the precious commodity that makes the world go round: cash. During the time of the Roman Empire, bankers were doing little more than converting foreign money into the Imperial Mint of Rome.

For centuries, banks dealt mainly with commercial and business lending. Banking for every-day consumers is a relatively new invention, and now a seemingly mandatory part of every person's life.

In Austria and other European countries, you pay a quarterly fee just for the privilege of banking. Other fees and restrictions apply. For example, bank accounts of the deceased go directly to the state, who determines what portion, if any, the surviving family may receive.

Who is on top? Which banks in the world have the most money? Earlier I recounted that China is leading the world in market capitalization, but Americans will be relieved to know that the USA ranks #1 and #2 in the world for bank shareholder equity. Who is biting at our heels in that category? The UK, coming in at #3, Japan at #4, and France at #5. So the French really do have a reason to act haughty.

For the top banking assets in the world, sadly, the USA falls out of of #1 again, landing at #3. In the lead is the UK at #1 and Switzerland at #2. The UK takes #1 again in the ranking of Tier 1 capital, with 79 billion dollars in the HSBC Company. The USA's powerhouse companies are Citigroup, Bank of America and JP Morgan Chase, taking the rankings of #2, #3 and #4, respectively.

Since the USA is not number one, on several counts, diversifying your money in other countries' financial institutions may not be a bad option. Of course, you will want there to be a clear benefit to you, in interest or taxes, in whichever foreign bank you choose.

Consolidate Federal Student Loan: Higher Education for All Aspirants

Want to study further but facing financial problems? Well here is the best solution to all your problems- Consolidate federal student loan. Now you need not bother about the money. Study as much as you want and you will be provided all the financial support.

Brief review

This loan which is given by the government helps you to complete your schooling and get a degree so you won’t face problem. It will also pay for the entire cost of education such as Tuition fees, hostel accommodation, books, computers and the other liabilities. What ever may be the subject you want to study, the choice always remains yours and consolidate federal student loan will help you to achieve your dreams. The only requirement is that you have to fulfill some conditions mentioned by the bank. The government requires the student to participate in loan counseling before they are going to receive the Federal Direct Loan

Requirements

• Must be an US citizen
• Should fill some legal documents as required by government
• Must mention the duration of the course, its type and from which institution are going to pursue

Rate of interest and repayments

The rate of interest charged is very less and reasonable for consolidate federal student loan. The borrower has to pay back the amount after getting a job or in between as desired by applicant but if it’s done during the course the rate of interest will decrease further. The rate of interest will only be charged after finishing the studies. The loan will cease if the borrower doesn’t fair good in his studies. This loan comes with higher repayment tenure.

Advantages

• Fast approval
• Higher repayment term and very lower rates of interest
• Since its directly under government so no worries of hidden costs
• Reasonable rates of interest
• Longer repayment period

Getting a Better Home Loan Rate

Obtaining the best home loan rate possible will make a big difference in your monthly payments as well as how much interest you pay on your home in the long-term. Find out what you can do to ensure you obtain the best rate possible on your new mortgage.

Home loan rates are currently lower than they have been in quite some time. The large inventory available in the housing market combined with these low interest rates have inspired many individuals to purchase a home; either their first home or to upgrade to a better home.

In order to save the most money possible on your home mortgage; however, you will need to make sure that you obtain the lowest home loan rate possible. Fortunately, today that is much easier than in the past when our parents and grandparents were purchasing homes. While they typically only had local financing options available to them, today we are able to go online and research home loan rates to find the best rate and terms to suit our needs.

Besides shopping around for the best home loan rate, it is also important to make sure that you have taken the time to have your credit in order before you actually begin the process of shopping for a home mortgage. This is a common mistake among many first time home buyers. Even if you are certain that you have made all of your payments on time and have not missed any payments at all, it is still a good idea to check your credit report at least six months before you plan to purchase a home to make sure that there are no mistakes reported on your credit report. Notices of late payments and delinquencies could result in a higher interest home loan rate on your mortgage. Ensure there are no mistakes ahead of time and be sure to correct anything that has been inaccurately reported before you apply for a mortgage.

If you happen to find something on your credit report that is inaccurate, write the credit reporting bureau and inform them of the mistake. Provide supporting documentation to prove your case such as canceled checks or receipts showing the debt was paid in full. Follow-up to be certain the derogatory item has been removed from your credit report.

When possible, try to make as large of a down payment as possible on your mortgage in order to obtain a lower interest rate. While it is possible to purchase a home with only a small percentage down payment, you will generally be considered a lower risk if you are able to make a larger down payment. This can translate to a lower home loan rate. Making a down payment of at least 20% will also help you to avoid private mortgage insurance, or PMI, which will also help you to save on your overall monthly mortgage payment.

Also, it is important to be sure you understand the difference between the different mortgage loan options. An adjustable rate mortgage will typically offer you a lower home loan rate than a fixed rate mortgage. An adjustable rate mortgage is subject to fluctuation over the term of your mortgage; however, so it is important to keep this in mind when choosing which mortgage option will best suit you.

Internet Home Based Business: How to Set Up Your Own

Starting your own Internet home based business is easy if you follow the right process. We have listed it out, so it’s easy for you to follow and implement. Read on.

Before you leave your corporate job, you should do some preparation work and set up your Internet home based business properly. While some entrepreneurs are thrust into a home based business suddenly through job loss or financial circumstances, your business will be more likely to succeed if you have planned ahead. Prepare yourself for the inevitable changes in your lifestyle and economic circumstances. Your stress level will be reduced and your enjoyment of your new life will be increased.

Inventory your interests

Before you can choose an Internet home based business that you will enjoy, you must have a thorough knowledge of yourself. If you enjoy your corporate job, you should make a list of the things about the job that you like. Do you like to talk to people? Do you like working with numbers? Do you like creating reports? Perhaps you prefer planning the office parties. Be as specific as possible about what you enjoy doing. If you don't currently have a paid position, think about the types of things you do as a volunteer or a homemaker. Do you enjoy organizing the school room parties for your children? Are you a volunteer story teller at the local library? Next, try to determine any common threads in the activities you enjoy.

Choose a business

The next step in creating an Internet home based business is to look at the common threads of interest and brainstorm how these could be translated into a paying enterprise. If you are having trouble finding ideas, ask a trusted friend or family member to brainstorm with you. Once you've come up with a short list of possibilities, consider advantages and disadvantages and select the one you feel most comfortable with. Then develop a specific business plan including time lines for implementation

Arrange your space

Arranging the space for your Internet home based business is more than finding a desk and a chair, although these are necessary equipment. Arranging the space is looking at how you will be located on the Internet, what type of presence you want to display. It includes all the arrangements that will be required to set up your domain, create your web site, arrange for web hosting, merchant accounts and payment arrangements. If you have need of storing your inventory, rather than a drop ship arrangement, you'll need to decide how those items will be housed. In your space planning, include a location for your home office and the equipment and supplies you will need there.

Find a support group

Only in rare instances is a person able to successfully launch an Internet home based business without help of some type. The support may be financial, physical or emotional. If you are willing to find and use a mentor you'll find that you are much more likely to make a successful transition for corporate world to home based entrepreneur. Sometimes there are meetings of organizations such as Kiwanis or Toastmasters. Even less formal organizations such as a neighborhood coffee club can yield people who are willing to share experiences and support.

This step by step process will help you set up your home based business quickly and easily.

Is YouTube In Your Business Future?

The magic of video has created a plethora of both good and bad means by which it is used for both personal and business reasons. A video in the form of a 30 second commercial aired on regular television, when produced correctly, could result in millions of dollars in sales. When done poorly it could cost the company millions.

But what about video online? Yes we are full steam ahead in the digital age. Everything is digital from pictures to appliances, and of course video. Due to the lowering cost of digital video recorders, anybody can be the next great film maker or commercial producer.

A commercial spot on television could cost a lot of money depending on how many times you run it, the geographic location and more. In steps internet video advertising and how it can help your business.

Unless you live in a closet I am sure you have heard of the web site YouTube. On this site you will find thousands of videos posted by amateurs and professionals alike. You can watch funny clips, people`s home movies, or Clay Aiken`s newest music video.

If you are into keeping up with the times, YouTube has given people the ability to post their frustrations about the press being all over Britney Spears, to Paris Hilton`s Champagne Birthday Party. It has truly become a magnificent web site.

How can YouTube help your business? Simply put you can post multiple video commercials about your business, products or services, how-to videos, and so much more. The best part you can sign up for free. YouTube has become such the video standard for online viewing, that we have implemented on our website the ability for our customers to embed their YouTube video directly into the online advertising promotions with a click of the button.

In order to get started I recommend that you go online to YouTube and search around and see what your competition is doing. Get a feel for what is working and what gets the most "plays".

Once you have a feel for what will produce the best results for the video of your business, product or service, go ahead and record it. Not sure how? Search online for people in your area that handle this, yes they are out there, and they are good at it.

Once your video is complete, upload it to YouTube; share it with your friends, relatives, business partners and current customers. If they like what they see they can share it with their friends with a simple click of the "share" icon that YouTube provides.

Next visit sites that allow you to embed YouTube video directly into online advertisements and promotions, and away you go. Your video, if done well, should be pulling in customers in no time.

Steps to Fast Email Marketing

In this cut throat competitive world, effective email marketing is considered to be an important component of the overall marketing effort of a company. However, it is quite true that the success of email procedures is entirely depended upon the quality of the leads you have generated and how well you can communicate to the potential prospects. By formulating a result-oriented marketing strategy, you can deal with the above mentioned issues to get the best advantages of email marketing.

As a potent marketer, you can get different various email marketing programs that are easily available in the market. Choosing the best program will help you to find the best tools to start a successful marketing campaign. Some of the best email programs provide you the facilities of autoresponder capabilities that allow companies to gain instant feedback to prospect inquiries. In this way, a company gets connected with the real prospects on an individual level.

Successful Email Marketing: Follow the Steps

Recognize Objective: To get the best advantages, a company needs to identify its final objectives of the email marketing program. It will help to add creativity and effectiveness into your program.

Know the Target: Always formulate strategies keeping your target in mind. It will help you to overcome limitations and brings you easy success.

Prepare an Email List: After that, you should better collect the e-mail addresses of your potential customers. It will help you to save resources and hit to the pre-determined customer list.

Develop the Email: After preparing a list, you can create the email, which you want to send to your potentials. The email should be written clearly in easy and understanding language in order to reflect the objectives and targets in a perfect manner.

Provide Information: The e-mail must be really informative and must tell about the products and services being offered by the company.

Try to Follow the Rules: It is better to follow the rule while writing a really beneficial e-mail. Following the rules will help you to get a successful marketing strategy as well.

By following above mentioned steps of e-mail marketing, a company is expected to gain a lot.

Forex News - Trading it for Bigger Profits

"Today, we have more news than ever and its delivered in the click of a mouse and many traders want to trade it and make profits - after all it's the fundamental supply and demand situation that drives forex prices..."

No it isn't!

Supply and demand fundamentals are not important by themselves - it's how they are perceived that determines price.

Here is a simple equation for market movement to illustrate the above:

Supply and Demand (facts and news) + Investor Perception = Price

From the above you can see that it is investors who determine price.

We all have the same facts to look at but we don't all draw the same conclusions from what we see and this is the problem when trading news stories.

If you could win by trading the news, with today's quality of it and lightening communications, the percentage of traders who would win would be far greater but the fact is:

The same amount of people who lost in forex trading 50 years ago lose today and this statistic won't change because you can't trade news stories in isolation.

The problems with trading news stories are greater today than they have ever been.

Why?

Because we all get the information quickly and it's instantly discounted by the market, we all have the information at the same time in any corner of the globe online and no one has an advantage of getting it first before the herd.

The problem that is always present and has been since markets started trading is:

You don't know how the traders are going to view the news because their all driven by their individual motivations and emotions furthermore, the news always reflects the views of the crowd and the crowd is always wrong.

Will Rogers once said:

"I only believe what I read in the papers"

He was joking of course, but it's surprising how many people read a paper or see a view on CNBC and think they can trade it and win - they can't.

FACT:

Markets collapse and turn when they are most bullish and rally when they are most bearish - this is nothing to do with the facts but how the investors perceive them.

News stories can be used but it's not in the way you may think.

If a bullish piece of news fails to push market higher, or bearish news fails to push a market lower, then you may have a trend change at hand.

You need to check and to do this, look at a forex chart and see the technical view of price only. Here you are seeing the reality or the truth in black and white.

This gives you a detached non emotional view of price and you can decide which way to trade. Using the news in this contrary fashion is a great way to spot situations which you can time entry with your technical indicators.

There is an old saying:

" If you can hold your head, when everyone around you is losing theirs you probably haven't heard the news"

In the above instance you have - but you're not taking the view of the majority.

If you use news in the above way and combine it with forex charts to time your trading signal, then you have a powerful combination for bigger forex profits.

Real Estate Recession USA - Protect Yourself Now

The real estate recession in the USA is upon us. Property values are likely to get a lot worse before they get better, as we see the biggest housing crisis for 50 years. Foreclosures are mounting and debt is a huge burden. The good news however is - you can protect the value of your property from further falls right now.

How can I Protect against further falls?

The answer is contracts that are being provided by a number of companies called:

"Lock in value property equity"

Essentially for a small affordable fee, you "lock in" the value of your property at a set price, when the contract is signed. This is the minimum price that you are guaranteed for your property should you wish to sell it.

How Am I protected?

The company giving you the "lock in" value gives you the option to sell your house to them at anytime after 2 years after the contract has been signed and you can protect yourself for up to 10 years.

Regardless of how far property prices fall, the company is obligated by the contract to buy your property at the agreed "locked in" price.

That sounds good - but what about if the market turns up?

Well if it does, you have the right but not the obligation to sell to the company granting the "lock in" value. If prices rose, you can sell your property to whom you wish and take advantage of any increases made.

So essentially I have a set locked in price which no matter how far the market falls I am guaranteed that price but if the property rises in value gains on mine?

The above summary is correct.

This contract allows any property owner to gain peace of mind for a small affordable fee. Real estate prices can be volatile as we are seeing now and we are arguably in the midst of a real estate recession.

People are worried and want protection.

In life we protect many of our assets yet, one of the most important and biggest assets we have is our home and we don't. Companies are now offering contracts such as the above so you can protect probably one of the most important assets you have - your home.

As we have seen the country is fighting not to fall into a recession - but even if it doesn't, the real estate market has a lot of problems ahead and is unlikely to recover quickly.

Real estate recession USA - it sounds frightening and for many property owners it is - but the good news is contracts like the above, can help you "lock in" the value of your property and gain peace of mind which is well worth considering.

Related Posts:
Navigating The Economic Recession of 2008

Now Is The Time To Buy Investments

While the recent fluctuations in the stock market are causing some economists to predict further loses, and even a full-on global recession, it isn't likely. True, some mistakes were made when lenders gave out too many sub-prime mortgages. These were high-interest mortgage, and other, loans given to people with bad credit, and they should have known it was like playing Russian Roulette. Now, as homeowners default and foreclosures abound, a lot of people are experience the severe repercussions of their trusting lending spree. But every dark cloud has a silver lining.

All of the foreclosures mean there is a lot of cheap real estate out there. Eventually, the economy will rise again, and with it, the value of the homes now being sold in foreclosures or other desperate sales. Now is the time to buy.

The nice thing about this is it is a sort of self fulfilling prophecy. As soon as people loose faith and stop investing, the economy continues to dive. Luckily, it works the other way. A confident populace, snapping up investments wherever they can help stabilize the economy. Once it is stabilized, it can't help but gradually rise.

And although the stock market situation looks bleak, the truth is, quite a lot of industries were on the rise just before the fall, indicating that not all is bad with our economy. For example, in December, the durable goods market was booming. There was a 5.2 increase in orders for long-lasting goods, says a report from Reuters. This would have meant a really strong dollar, if not for the sub-prime bubble finally collapsing. This indicates to me that we can overcome this blip. Sure, there will be some forever affected by this unfortunate turn. But with some careful investing, there will also be some that are forever benefited by it.

This Week's Market Outlook

- Dollar hammered by weak US data; breaks down out of range
- How high can the EUR go?
- Multiple central bank rate decisions next week
- Key data and events for next week

Dollar hammered by weak US data; breaks down out of range

After trading in a broad consolidation range for just over three months, the greenback plunged to new all time lows against the EUR, breaking above the key psychological/ technical 1.5000 level. Follow-through buying has been abrupt and this is the result of the relative suddenness of the break-a lot of speculative buyers were caught off guard-and the amount of option interest at/above 1.50 generating EUR/USD buying demand. The immediate catalyst on Tuesday was a string of worse-than-forecast US data reports (higher PPI, lower home price, and sharply weaker consumer confidence), but the move really got going after Fed Vice Chair Kohn suggested that the US housing slump had more room to go and that financial market stabilization would be more prolonged. In short, Kohn suggested that the much hoped-for recovery in the second half of 2008 was likely to be postponed. That prospect of light at the end of the tunnel had been helping to support the USD despite overwhelming expectations that the US economy was softening and US rates were headed lower. Once that light went out, the buck went with it.

The USD decline, however, has not been evenly distributed against other major currencies and this gives cause to pause in getting universally bearish on the USD at this point. One currency with arguably the brightest prospects among the majors, AUD, with high interest rates, expectations for additional rate hikes and strong growth, both domestically and regionally, has so far managed only minor new highs beyond the 0.9400 high seen last fall. That is most likely due to the relatively high level of long-positioning and wariness over central bank intervention. GBP and CAD also stand out as being well below their earlier highs against the USD. To be sure, the USD is currently suffering through a deluge of weak data, which is likely to get worse before it gets better, but it's important to note that this move is largely concentrated in the EUR. More importantly, the notion that the major economies have de-coupled from the US has yet to bear fruit. The most that can be said is that there is a time lag, but the ongoing slowdown in the US will eventually affect other major industrialized economies. The most vulnerable currencies outside of the USD remain CAD, due to its close trade relationship with the US, and GBP, due to high household debt levels, weakening housing market, and expected rate cuts ahead. I would now add EUR to that list, given its recent sharp appreciation and the expectation that Eurozone growth reports will eventually turn softer in coming weeks and months. In the short-run, though, traders should reckon with further upside potential for the EUR as speculative players who missed the boat pile into the breakout on pullbacks and new highs.

How high can the EUR go?

In the very short-term, over the next couple of weeks, I think EUR/USD has the potential to see to the 1.5250-5300 area before most of the laggard buying interest is satisfied and medium-term selling interest begins to be felt. Fibonacci projections also point to the 1.5300/05 level as a likely point of technical resistance. Beyond the 1.5300 level, market attention is focused on the 1.5500 level as the next major 'round number' objective. The move higher in EUR/USD has been swift and persistent, to put it mildly. As I mentioned earlier, a lot of major speculative players missed the initial break-out move and have been forced to 'go to the market' as pullbacks have been minimal. This has seen fresh buying come in as new highs are made, a pattern which also reflects option books becoming shorter as EUR/USD advances, bringing in still more fresh buying. EUR/USD's upside will remain in play while prices hold above the 1.4950/70 prior high/breakout level and it would take a drop below the 1.4890 level to indicate a failure and reversal.

The fundamental underpinnings of the move higher in EUR/USD are somewhat suspect given that much of the weak US data was previously thought to have been priced into the USD. But the decisive factor appears to be the unexpected outperformance of Eurozone data coinciding with a deterioration in US data during the last two weeks. Also, over the last several months, there has been a distinct tendency for the USD to weaken more in the second half of the month, due to the prevalence of US housing data clustering in the latter half, and that has certainly been the case this time around. There are multiple data risks to the USD in the week ahead, most notably the ISM manufacturing and services PMI's, the Beige Book, and Feb. NFP. But data risks exist for other currencies as well, most notably in GBP and CAD. I would also caution that if the US economy is weakening as much as feared, other major industrialized economies will be affected, with timing and degree the only questions. Keep in mind that European stocks remain mired in negative territory of between -12/14% YTD in contrast to US stocks, which are only down around -7% YTD. This suggests not getting too carried away with the current wave of USD weakness and instead looking for opportunities to sell other currencies likely to experience downturns in the near future.

In terms of EUR strength, the sharp break higher this week risks bringing a response from Eurozone finance and central bank officials. Eurozone finance ministers will gather for a regular monthly meeting beginning Monday evening European-time. On Thursday the ECB will hold an interest rate setting meeting followed by ECB President Trichet's press conference. Eurozone finance ministers' views on EUR strength are still quite divided, with some (Belgium's Reynders and Luxembourg's Juncker) suggesting EUR strength is becoming a concern, while others (Netherland's Wellink) suggesting the EUR above 1.45 has not been the problem they expected. With opinion divided, a concerted effort to stem EUR strength seems unlikely, but not out of the question. Last fall, when EUR/USD looked poised to move over 1.5000, market surveys of investors indicated a heightened expectation of intervention if EUR/USD approached 1.55, with the risks increasing sharply above that level. At the minimum, look for Eurozone finance ministers to complain about 'excessive volatility' in exchange rates and the speed of the recent EUR increase.

Multiple central bank rate decisions next week

Except for the US and Switzerland, every other major central bank is holding a rate setting meeting next week. Below are my outlooks for the outcomes in order of the announcements.

Australia-RBA decision is scheduled for Tuesday afternoon local Canberra time/early morning European time on Tuesday. Markets are nearly unanimous in expectations of a 1/4% rate hike to 7.25% and I agree. RBA rhetoric has been extremely hawkish and incoming data has been solid if not robust. The RBA statement following the decision is also likely to retain a hawkish slant and warn of additional rate hikes, but slower global growth is likely to obviate the need for that. The risk is clearly that the RBA delays, triggering profit-taking selling of AUD. Look for AUD to remains well supported into the decision and after if the statement is hawkish as expected.

Canada-BOC is expected to cut rates, but the market is split between 1/4% and 1/2%. Given the alarm bells ringing at the Fed and the implications for the Canadian economy and with core inflation restrained at 1.4% YoY, I think new Gov. Carney is going to err on the side of providing more accommodation rather than less, so I expect the BOC to cut rates 50 bps to 3.50%. I look for CAD to weaken in the run-up to the decision on Tuesday morning, but primarily against non-USD currencies.

New Zealand-RBNZ decision is out on Wednesday afternoon NY time/early morning Wellington. The market expects no change to the 8.25% benchmark rate and given recent declines in business sentiment, I'd have to agree. The risk for Kiwi is that Gov. Bollard then indicates that calmed inflation pressures may permit lower rates in 2Q, leading to a dip in NZD.

UK-BOE will announce its decision early Thursday morning NY time. The market expectation is for a steady 5.25% rate, but I think ongoing credit market concerns and recent signs of slowing private consumption will push a slim majority of the MPC to cut rates 25 bps to 5.00%. I'm out on a limb with this one since most BOE speakers have gone out of their way to rein in expectations of lower rates in light of the threats from inflation. But inflation dropped sharply in Feb. and faltering growth is the far greater risk to the UK outlook. If the cut does materialize, GBP should get hit pretty hard, especially on the crosses.

Eurozone-the ECB also announces on Thursday morning NY time and I expect no change to the ECB's 4.00% refi rate. Recent indicators suggest Eurozone growth is holding up reasonably well, though many forecasts have recently been reduced. Most importantly, ECB Pres. Trichet will again bang the inflation drum, threatening to raise rates to forestall inflation and keeping EUR supported. On the EUR itself, he will undoubtedly be pressed on the ECB's view of EUR strength, and I expect him to decry 'brutal moves' and vent on 'excessive volatility in exchange rates'. It seems unlikely that he will indicate any willingness to intervene to stem the EUR's rise, absent US Treasury support, but should he give such an indication, it's a sign that the rest of the governing council is concerned about EUR strength and the EUR will likely have made a key top.

Japan-BOJ decision is due out on Friday afternoon Tokyo time and no change is expected. Japanese growth is stagnant, deflationary pressures persist, and the BOJ has no room to effectively lower rates. This one is a non-event and the JPY will continue to react to risk aversion and market volatility.

More US housing and other key data next week

US data is heavy again next week beginning with the Feb. ISM-manufacturing index, which is expected to slip below the 50 expansion/contraction line again, and Jan. construction spending. Tuesday sees only weekly ABC consumer confidence, which held steady at -37 this past week. Wednesday sees the Feb. ADP employment report, final 4Q non-farm productivity and unit labor costs, and then the key Feb. ISM service sector index and the Fed's Beige Book for the upcoming March 18 FOMC meeting. Thursday sees weekly jobless claims, Jan. pending home sales, and Feb. ICSC chain store sales. Friday sees the Feb. NFP employment report, currently expected to show an increase of 40K and a tick higher in the unemployment rate to 5.0% from 4.9%. Fed speakers are legion: Monday: Plosser and Kroszner; Tuesday: Bernanke, Mishkin and Fisher; Thursday: Pianalto and Rosengren; Friday: Poole, Hoenig, Fisher, Yellen, Mishkin and Kohn.

Eurozone data begins with Feb. manufacturing PMI's and Eurozone Feb. CPI estimate. Tuesday sees Jan. Eurozone PPI and second revisions to 4Q GDP. Wednesday sees Feb. Eurozone service sector PMI's and Jan. Eurozone retail sales. Thursday sees Jan. German factory orders and the ECB rate decision. Friday sees Jan. German industrial production and Jan. OECD leading indicators.

UK data begins on Monday with the Feb. manufacturing PMI. Tuesdays sees the Feb. construction PMI. Wednesday sees Feb. Nationwide Building Society consumer confidence, Feb. PMI for the service sector, and the Feb. BRC shop price index, a measure of retail price inflation. Thursday sees the BOE rate decision.

Forex.com

The Weekly Bottom Line

HIGHLIGHTS

- U.S.-Canada travel: a one-way street?
- U.S. indicators point to continued weakness
- Modest Canadian Federal Budget after October's 'mini budget'

The Canadian fiscal policy centerpiece that is the Federal Budget emphasized prudence in the midst of the current economic slowdown, and offered little after October's significant 'mini-budget' (see our Budget 2008 commentary on our website for details). The only economic data for Canada this week were fourth quarter 2007 current account (CA) figures. Canada's CA balance, which measures the annual difference between national savings and investment and is matched by capital flows, fell into the red for the first time since 1999 with a -$0.5 billion quarterly print. The yearly CA balance remained positive for 2007 at $14.2 billion, but reverted back close to 2003 levels after peaking in 2004. The deterioration in the CA was the result of a much weaker goods & services balance. It is well know that the single most important weak area for Canadian growth stems from the U.S. slowdown.

Sore spot

But the sorespot within the balance might surprise, as so much of the emphasis is typically on the weaker goods balance. The goods surplus did soften by $1.7 billion (-3%) on an annual basis. But this pales in comparison to the ballooning in the services deficit by $4.3 billion (+28%), mostly due to a much larger travel deficit. A simple story really, which sees more Canadians visiting the U.S. and much fewer Americans returning the favour. While not yet significant at 0.1% of GDP in the fourth quarter of 2007, the CA deficit does mark a turning point. It is not necessarily symptomatic of any troubling imbalance in Canadian saving, but the CA balance is unlikely to improve in the first half of this year. Although important, a larger drag from the external sector of the economy is not expected to outweigh generalized strength in domestic economic fundamentals.

Generalized weakness

By contrast, the big picture in the U.S. is one of generalized weakness with few pockets of strength, notably exports. Revised estimates of real U.S. GDP growth in the fourth quarter of 2007 were unchanged at 0.6% annualized. This should help qualm some of the cries, heard from many corners, that the U.S. was already in a recession at the end of last year. Declining employment and real GDP are both necessary conditions of a recession. As such, only significant final downward revisions to both figures could prove such ' correct.

But the U.S. economy did start the year on a weak footing. New and existing home market data for January confirmed ongoing weakness in sales, translating into further price declines. New home sales are at their lowest level in 13 years. The relative supply-demand imbalance, as measured by months' supply it would take to liquidate the stock of new homes at the current pace of sales, is at its highest in 26 years. Existing single-family home sales were at their lowest in 10 years. The inflation-adjusted median price of homes, new or existing, has turned back the clock to 2003 levels (see accompanying chart). It would be overly optimistic to anticipate a stabilization of the home market, let alone a rebound, any time soon.

Other economic data out of the U.S. were also weak. Capital goods orders plummeted in January, falling by 5.3% on the month, although this comes on the heels of December's strong 4% gain. On the labour market front, the latest initial jobless ' report saw a significant jump from the week prior. However, the President's day holiday during the reporting week makes the data difficult to interpret, as holidays can throw seasonally-adjusted measures off. March initial and continuing jobless ' should be more telling. However, our leading-indicator signal for initial jobless ' is not yet near flashing a recessionary red light (see accompanying chart).

The outlook for U.S. growth remains weak. The Fed's forecast range is now 1.3-2.0%, in line with TD Economics' forecast of 1.6%. January figures for personal spending show a fairly flat profile with a 3-month annualized trend growth at a mere 1.4%. Given the housing and credit market woes, it comes as no surprise that a consumer confidence index for January was at its lowest level in almost 8 years. Consumers are and have been resilient, but they're not blind.

Lower rates in both countries

Chairman Bernanke's language heard in his testimonies to U.S. House and Senate committees was mostly focused on economic weakness. Inflationary concerns were duly noted but not brought to the forefront. The Fed is still hoping that slower economic activity will eventually translate into weaker inflation. It had better hope this happens soon. Declining home prices have so far failed to translate into weaker inflation. The U.S. dollar declined further this week, partly in anticipation of lower rates. This puts further pressure on import prices and overall inflation. In particular, oil prices keep hitting new record highs, above $US102/bbl on Thursday. Very little slack has opened in the labour market. All of which puts the Fed in a bind. Its preferred inflation gauge, the core PCE index, showed little sign of easing in January at 2.2% year-over-year, unchanged from December. A few more months at these or higher levels and further increases in market expectations for inflation could turn the tables and have the Fed re-focus on its price stability mandate. No one ever said that maintaining price stability and the expectation thereof was going to be easy, as the current episode is highlighting. We think the Fed's quandary will limit the extent of further easing to 50 basis points in the near-term.

In Canada, partly because of an elevated Canadian dollar, a strikingly weaker inflation backdrop makes the Bank of Canada's job much easier than its U.S. counterpart. It has signaled its intention to lower its overnight interest rate at its Tuesday meeting. The debate hinges upon the extent of easing. As of Friday morning, futures markets were almost fully pricing in a 50 basis points cut, which is also the TD Economics call for the March 4th meeting. For one, the economic data has not proved any better than expected since incoming Governor Carney took the reigns at the end of January. Second, core inflation was running significantly below the 2% target at 1.4% in January, and is expected to remain below 2% until late 2009. On track with the BoC's forecast and ours, the Canadian economy's excess demand should be eliminated by mid-year. We expect the BoC to hold its overnight rate steady at 3.25 % after easing by a cumulative 75 basis points in March & April.

UPCOMING KEY ECONOMIC RELEASES

Canadian Real GDP - Q4-07

Release Date: March 3/08
Q3 Result: 2.9%
TD Forecast: 1.0%
Consensus: 1.0%

We're expecting to see Canadian GDP growth slow markedly in the last quarter of 2007, to only 1.0% at an annualized pace. And, the risks to our forecast lie squarely to the downside. While consumer spending should rebound to some exent in Q4 and investment in machinery and equipment should post another big gain, that's not going to be enough to make up for the weakness we saw in several other sectors. Since the pace of housing starts slowed significantly from Q3 to Q4 and Statistics Canada reported a mere 0.4% increase in non-residential construction, we'll see much less growth from both residential and non-residential structures than over the last few quarters. International trade will also likely be a big drag on growth, with real exports of goods having declined by 6.3% and real imports increasing by 6.6%. The monthly GDP figures are also pointing to a weak Q4 result, with December GDP likely to decline by 0.5%, which is consistent with only about a 0.8% pace of GDP growth in the fourth quarter of the year.

U.S. ISM Manufacturing Report - February

Release Date: March 3/08
January Result: 50.7
TD Forecast: 46.0
Consensus: 48.5

We're expecting to see the ISM manufacturing index drop rather significantly, from 50.7 in January to only 46.0 in February. Every single major regional manufacturing indicator is well into negative territory, with particularly troubling drops in the Empire Fed (from +9.03 to -11.72) and the Chicago PMI (51.5 to 44.5) in February. Furthermore, the ISM manufacturing index was unrealistically strong in January, given the declines in all of the regional manufacturing indices and the huge degree of weakness in the ISM non-manufacturing index, so there could be some serious payback in February.

Bank of Canada Rate Decision

Release Date: March 4/08
Current Rate: 4.00%
TD Forecast: 3.50%
Consensus: 3.75%

We're expecting to see the Bank of Canada cut rates for the third consecutive time on March 4, but this time by a larger 50bps. The Bank of Canada has already indicated that they plan to cut interest rates again, with the January 22 statement stating that “further monetary stimulus is likely to be required in the near term.” Since monetary policy acts with a lag, and the downside risks stemming from a weakening U.S. economy necessitate further monetary accommodation in Canada, we think that the Bank of Canada would be better off delivering rate cuts sooner rather than later.

Canadian Employment - February

Release Date: March 7/08
January Result: 46.4K; unemployment rate 5.8%
TD Forecast: 10K; unemployment rate 5.8%
Consensus: 5K; unemployment rate 5.9%

We're expecting to see the pace of Canadian employment growth slow in February, after what we think was its last hurrah in January. For one, the composition of growth in January was simply unsustainable. Nearly all the job growth came from the goods sector, with a particularly surprising 17.5K increase in manufacturing employment, where we're expecting to see some payback in February. However, with the participation rate expected to edge down a bit, the unemployment rate will likely remain unchanged at its record-low level of 5.8%. Canadian economic growth will likely be extremely soft in the first quarter of 2008, taking some of the shine off the unbelievably strong labour market.

U. S. Non-Farm Payrolls - February

Release Date: March 7/08
January Result: -17K; unemployment rate 4.9%
TD Forecast: -20K; unemployment rate 5.0%
Consensus: 30K; unemployment rate 5.0%

We're expecting to see U.S. nonfarm payrolls decline in February by 20K, following the 17K fall in January. Over the last month, virtually every single indicator of employment has weakened. The 4-week moving average of initial jobless ' rose, and is now just a hair off the levels where it was in 1990 and 2001 when payrolls turned negative. And the 4-week moving average for continuing ' has moved well past the levels that signaled job losses in the past. Furthermore, the employment sub-index of the Chicago PMI, which correlates pretty well with overall payrolls, plummeted in February from 47.0 to only 33.5. This level is generally consistent with payrolls declines of over 100K, and adds some further downside risk to our payrolls forecast.

Full Report in PDF

TD Bank Financial Group

US Market Week Wrap Up

Gold and oil continued their long march upwards this week, contrasting dramatically with the continued downward plunge in the dollar, which reached new lows against the Euro and other major currencies. Pension funds were seen increasing their commodities holdings as a result. A disappointing quarterly report from AIG and a worrisome Comscore report on Google's ad clicks weighed on markets, along with a stream of poor economic data. Fed Chairman Bernanke's semi-annual testimony before the House and Senate seemed to leave the door open for continued aggressive rate cuts going forward, adding to pressure on the dollar.

With no end in sight to the bad economic news and continuing weakness among equities, there has been a flight to quality in the bond market. By Friday the two-year yield had fallen below 1.7% and the 10-year was hovering around 3.55%. Expectations for a more aggressive Fed crept into the Fed fund futures market, with the April contract projecting roughly 60% odds of a 75 basis point cut at the next meeting, while the July contract pricing in a 40% chance the Fed funds rate would drop below 2% by summer.

The Dow opened flat on Monday, climbing higher thanks to January existing home sales that narrowly topped expectations. Inventories of existing homes for sale continue to rise while median prices fell 2.5% in January. IBM's $15B stock repurchase announcement and OFHEO's decision to remove the portfolio caps on Fannie Mae and Freddie Mac were notable bright spots supporting equities early in the week.

But later in the week, equity and bond markets had begun focusing on the plunging dollar and its relationship to commodity prices around the world, as well as weak US consumer confidence data. Indices headed south in Thursday's morning session as comments from Bernanke's testimony on the hill implicitly promised more rate cuts going forward, and that there will probably be some bank failures.

On Friday, indices continued their downward slide on after the Feb Chicago PMI registered a new 6 year low. News that a UBS analyst increased estimates for worldwide losses related to the financial crisis to $600B only added to the pressure, as did a report that three hedge funds were liquidating muni bond positions. Monoline insures continued to be a focal point after press reports that the Ambac bailout has encountered a "significant snag" over last couple days.

Friday culminated in a 315 point sell off on the DJIA, as stagflation fears grew. For the week, the DJIA dropped 1%, Nasdaq fell 1.4%, and the S&P 500 declined 1.7%.

Trade The News Staff
Trade The News, Inc.

Economic Outlook: Will Trichet Charge the Gun?

This week's highlights

No, we do not believe that he will do that at the monetary-policy meeting next week. But he is carefully considering whether he needs to pull out the drawer with the cartridge or the interestrate weapon. The growth scenario in Europe has become more uncertain and the risk that American growth caves in - with a spill-over effect on the European economy - has increased over the past month after a string of very weak economic indicators.

We therefore expect the ECB to change its estimates when it presents new growth and inflation projections. With respect to growth, this means that the picture has become more negative and we therefore expect the ECB to cut 0.2-0.4 percentage point off its current growth estimate for 2008 which is 2.0%, i.e. growth will fall below the potential growth rate.

This is a growth scenario which matches our own growth estimate at the moment, but also a growth estimate which is currently under pressure by the weak American indicators. We still expect growth around 1.75% this year when growth will be weakest in the first six months but rise slowly in the last six months given that inflation falls and thus contributes to lifting the purchasing power of consumers, which will boost consumer spending a little.

With respect to inflation, the ECB is likely to revise up its inflation estimate from the current 2.5% to about 2.7%. This is a growing concern at the ECB. A current rate of inflation at 3.2% is much too high to the liking of the ECB. And it is the highest rise in the history of the ECB's monetary-policy.

Although the ECB may see and also say that a very large part of the high rate of inflation can be ascribed to temporary factors - high energy and food prices - the bank's concern is not removed with a stroke of the pen. The reason is that it fears that the high rate of inflation will lead to second-round effects, including that the current inflation rate will give the German unions another alibi in the on-going collective bargaining - in addition to sharply falling unemployment - to demand high wage increases.

This fear means that the ECB will be somewhat hesitant to cut interest rates although we assess that the high rate of inflation in the first six months of 2008 will fall towards 2% at the end of the year. However, a somewhat weaker growth picture than the current may prompt the ECB to react - also because slower growth puts a damper on the inflationary pressure - although the market forces are not always known to dampen prices and wages in all European countries due to rigid structures in the labour market. This means that if the growth scenario deteriorates and thus also the ECB's assessment of the growth scenario, the first interest-rate cuts may come already in the last six months. We still expect unchanged ECB rates for the rest of the year.

This week's other highlights

- The US: employment report and ISM for both the manufacturing industry and the service sector
- Japan: monetary-policy meeting at the Bank of Japan
- The UK: monetary-policy meeting at the Bank of England and PMIs

Monday

The US: ISM Manufacturing - February

ISM is the nationwide sentiment indicator for the manufacturing industry and gives a good indication of the development in industrial production and GDP. ISM may also signal whether the manufacturing industry has been hit by the financial crisis and the slowdown in the housing market. Moreover, it indicates how close the US is to a recession. Usually, ISM must fall to around 42 before the US is in recession.

The regional indices announced over the past few weeks - NY Empire State and Philly Fed - are both pointing towards a weak ISM number for February. Moreover, the leading indicators of the ISM Index: order intake, order books and stocks also point towards a weaker ISM overall.

Since the last announcement, the negative view has been strengthened by weak data about consumer confidence, the struggling housing market and a weak development in employment. We therefore expect ISM to fall after its rise in January, when it rose from 48.4 to 50.7.

In addition to the index, focus will be on new orders, production, employment and the price index.

The UK: PMI manufacturing - February

For the past couple of months, PMI Manufacturing has been falling, and in January it was 50.6 against 53.9 in November 2007. This means that the index is now at its lowest level since August 2005.. The order index pulled down overall PMI, falling in January to 49.7 which (since it is below 50), indicates a fall in new orders. It has not happened since 2005. This is partly due to export orders - the index of export orders fell to 47.6 from 55.3 in November 2007. Expecting slower growth in the UK as well as the important business partners the US and the euro zone - particularly during the first six months of the year - we find it likely that PMI will remain low or fall further in February.

Wednesday

The US: ISM Service - February

Moreover, the sentiment indicator ISM for the service sector, is important since it accounts for about 80% of the economy. The financial sector is part of the service sector. This is thus one of the indices where any consequences of the financial crisis are reflected. ISM for the service sector has so far been represented in the form of a production index, but as from January the ISM was calculated as a weighted index as is the case for the manufacturing industry. This will undoubtedly increase the interest in the ISM for the service sector, since it is expected to make the index more representative and less volatile.

The service sector index plunged in January to 44.6 from 53.2 (our calculation based on the indices included in the aggregate index). Although the growth situation has deteriorated in recent months and there was a certain degree of unrest in the financial markets in January, it is hard to see that the situation should have deteriorated this much in such a short time. We therefore expect ISM Service to stage a small come-back in February, albeit remaining at a low level. For instance, the order index fell sharply, and the order book thinned slightly in January. Overall, it does not point towards great activity in February.

The US: ADP employment - February

The ADP employment report gives an indication of the rise in employment in February (job report to be released on Friday). The survey covers only the private sector and is based on reports from the agency which manages wage payments to about 24 million employees (ADP). It corresponds to a little more than 20% of the overall staff in the US private sector. As it refers only to the private sector, the trend growth in public-sector employment of just over 21,000 a month should be added to the aggregate number of employees.

However, ADP is not always the best indicator of employment growth. For instance, ADP greatly overestimated growth in January when ADP reported a rise of 130,000 persons, whereas the overall employment fell by 17,000, and employment in the private sector rose by a mere 1,000 persons. This means that ADP's estimate is likely to be regarded with scepticism.

The UK: PMI service - February

PMI service rose marginally in the past two months after a sharp fall during the period September-November. The index is now at 52.5 against 51.9 in November 2007 - the lowest level since May 2003. In August 2007 PMI service was 57.6. We expect that PMI service will fall slightly again as a result of slower-thanexpected growth - not least in consumer spending - a slowdown in the housing market and continued financial turbulence.

Thursday

The US: pending home sales - January

The number of pending home sales is a relatively good leading indicator of home sales. Pending home sales cover only about 20% of all home sales but are nevertheless a good indication of home sales in the following two months.

After two months of increases in pending home sales, we saw a fall in the past two months and they have therefore stabilised in the past four months just below index 90 (85.9 in December). However, home sales are still falling, though at a more measured pace than in Q3 2007.

Interest rates and house prices have fallen, and consumers' disposable income for home purchases has risen by more than 17% since July 2007, pointing to an improvement in the housing market. On the other hand, the number of mortgage loan applications indicates falling home sales, and the combination of a large volume of homes for sales and falling house prices makes it less attractive for the speculative buyer to enter the market.

We expect the number of pending home sales to remain at the low level below 90 in January. This is an indication that we do not expect any decisive turn in home sales in coming months.

The UK: monetary-policy meeting at the BoE

We expect the Bank of England to leave interest rates unchanged at 5.25% following a quarterpoint cut at the meeting in February. Since the last meeting, the inflation report with updated inflation and growth forecasts from the BoE has been announced. The report indicated that the BoE will not lower interest rates so much as market participants had expected at some time, but the report still emphasised that lower interest rates are necessary. The monetarypolicy committee (MPC) is currently faced with an expected sharp slowdown in growth combined with rising inflation in the short term.

Inflation was above the BoE's target of 2% y/y in January, and several indicators signal that it will rise further in coming months. The majority of the large gas and electricity suppliers have announced that they will increase prices in January and February, and a new calculation method for the consumer price index as of February will mean that these increases will affect inflation immediately (previously it took four months before such price changes were reflected in the inflation rates).

With respect to growth, retail sales delivered a surprise with a significant increase in January, but there are many indications that they were driven by an unusual level of sales in January, and the CBI survey of retail sales in fact indicated that retail sales will decline again in February. Furthermore, figures from the housing market still indicate signs of weakness, which will also contribute to slower growth in future.

Hence, nothing much has changed compared to the picture given by the BoE in the inflation report from the last monetary-policy meeting. The MPC is still facing an important decision since it has to weigh the risk that a significant decline in growth will pull inflation down below the target against the risk that rising inflation and high inflation expectations will result in a more lasting high inflation rate above the target in the longer term. We therefore expect interest-rate cuts from the BoE will take place gradually, i.e. we expect interest rates to remain unchanged over the next two months and then we expect an additional quarter-point cut to 5% in May.

Japan: monetary-policy meeting at the BoJ

The Bank of Japan has left interest rates unchanged at 0.5% since February last year, and we do not expect changes within the near future. According to the monthly report from February, the BoJ still expects moderate economic progress although growth seems to be slowing down. The BoJ also expects headline inflation to rise due to rising energy and food prices for the short term and higher growth for the long term. Core inflation (exclusive of food and energy) was still below zero in December.

Few economic indicators have been released since the latest meeting at the BoJ on 14 February. Figures for the industrial production in January have been released. The industrial production has fluctuated quite a lot since mid- 2007 and declined in January by 2% m/m, the largest fall since the same month the year before. However, in y/y terms, it is still at a fair level around 2½%. The manufacturers also expect the production to fall by an additional 2.9% in February followed by a rise of 2.8% in March. This means that the production will fall by 2½% in Q1, which will then be the largest fall since Q4 2001.

Given the prospects of slower growth in Japan and in the global markets, we do not expect the BoJ to raise interest rates again within the next months. A hike will not be mentioned again until core inflation (exclusive of food and energy) will start to show a convincing positive trend. Uncertainty about the development in the global economy increases the probability of slower-than-expected growth in Japan, which will keep the BoJ from raising interest rates in the short term. Therefore, we do not expect interest rates to be raised until late 2008.

Germany: industrial orders - January

New orders have been solid, and they are an important indicator since they indicate the future development of the industrial production. On the basis of the development in PMI new orders for Germany - this index has been below the long-term average in the past four months - we assess that new orders will now also be affected. We therefore expect a weak order intake in January.

Friday

The US: job report - February

As usual the job report is a very important economic indicator from the US. And focus on the job report has only grown after the surprising data in January when employment declined by 17,000 - the first fall in employment since August 2003. The employment indices for manufacturing and service for January indicate that a significant upward revision of the employment data in January should not be expected. Thus employment as indicated by ISM service declined from 51.8 to 43.9 (the lowest level since February 2002), and employment as indicated by ISM manufacturing declined from 48.7 to 47.1 (the lowest level since September 2003). After a sharp increase in unemployment in December to 5% from 4.7% unemployment declined slightly in January to 4.9%.

More important employment indicators for February will be announced next week - e.g. the ISM employment index and ADP. However, other economic indicators have been released which indicate that the labour market continues to weaken:

The number of jobless claims has been quite high in recent weeks. The four-week moving average was 360,500 in week 7, which is the highest level for the average since 2005. In February Conference Board Consumer Confidence stated that it has become increasingly difficult to get a new job (the jobshard- to-get index rose) and furthermore, there are not so many vacant jobs any longer (the jobs plentiful index declined).

With respect to the regional business indicators, the index of the Empire State dipped below zero for the first time since 2003, while the corresponding Philly Fed index increased in February.

Focus will also be on the wage development in the job report. Following significant wage growth in December of 0.4% m/m, average wages rose at a more moderate pace in January by 0.2% m/m. The annual rate of increase in wages has declined slightly in recent months to 3.7% y/y in January from. 4.1% in September. We also expect moderate wage growth in February.

Germany: industrial production - January

For December, the industrial production increased by 0.8%. This happened after two months of small declines in the industrial production, and with an average monthly increase of 0.4% over the past six months, the industrial production has shown quite a solid development and perhaps a better development than that of PMI manufacturing. The increase in orders in recent months - in spite of the fall in December - points to an increase in January. For the period ahead, a fall in the number of new orders is expected, which is also expected to spill over into the industrial production.

Jyske Markets - FX Research

FX Briefing: Divergent Monetary Policies Lift Euro Over 1.50

Highlights

- EUR-USD hits new all-time high of 1.5240, USD-JPY approaches 104
- Fed representatives indicate further monetary policy easing
- Diminishing growth momentum in EMU makes interest rate cuts likely

Divergent Monetary Policies Lift Euro Over 1.50

It took the euro three months to break its previous record of 1.4968. Many people had no longer believed that this could happen. But this week, EUR-USD sailed past the 1.50 mark for the first time ever. The European single currency is currently quoted at 1.52, and the new all-time high is now 1.5240. The yen was also boosted by the dollar's weakness. Supported by favourable Japanese economic data, USD-JPY is close to 104 at the end of the week. This is the strongest the yen has been since the end of 2004/beginning of 2005.

The move above 1.50 was triggered by a slight improvement in the ifo business climate index, and a steep drop in US consumer confidence. But the real reason is more deeply rooted: it lies in market participants' impression that the European and US economies, and their monetary policies, are drifting apart.

That diverging monetary policies in two regions trigger exchange rate adjustments is nothing new. By January at the latest, the Fed had abandoned its reservations concerning inflation risks and has been pursuing a clearly expansionary policy since then. Various Fed members, including Ben Bernanke, have explained that particularly aggressive monetary policy action is advisable to guard against “financial accelerator” effects. At the same time, the latest economic indicators confirm that the slowdown in the US is now well underway:

- In the fourth quarter, GDP growth in the US slowed to an annualised 0.6% qoq, and there was actually a drop in domestic demand.
- Existing and new home sales, and declining prices, show that the housing market contraction is still ongoing.
- The January labour market report and the indicators available for February, particularly initial jobless claims, prove that the downswing has started to affect the labour market.
- Consumer confidence has now slumped to levels usually associated with the onset of a recession, and retail sales and personal spending are, at best, stagnating, if the price effects are excluded.
- Rising prices, especially for energy and food, are curbing purchasing power.
- For the last few months, industrial production has been more or less stagnant, in fact it is actually trending down: the February surveys for the manufacturing sector have deteriorated markedly.

The ECB, on the other hand, seems to be showing little inclination to follow the Fed's example. Although it is expecting growth to weaken, it is hoping that private consumption and foreign demand, especially from buoyant emerging markets, will keep the economy going. In this growth scenario, and in view of higher cost pressure due to increased commodity prices and wage agreements, the ECB is still emphasizing the inflation risks. Indeed, Bundesbank president Axel Weber has remarked on more than one occasion, that the markets' rate cut expectations are not in line with a stability-oriented monetary policy.

Diverging monetary policy expectations and the (expected) widening of the interest rate gap as a result, have been largely responsible for EURUSD breaching the 1.50 mark. However, with regard to the impending ECB governing council meeting, there is a risk of a market correction. At the beginning of February, the ECB refrained from propagating a growth rate close to potential, and deliberately so, in our opinion. Instead, it is now only talking of “ongoing growth”. At the same time, the ECB underlined the particular macroeconomic uncertainty in connection with the credit crisis.

At the meeting next Thursday, the ECB will introduce its latest staff projections. We are expecting the inflation forecast to be raised both for this year (middle of the range 2.6-2.7%) and for 2009 (to about 2.0%). However, we are also expecting the growth projections to be cut to around 1.6% for this year and 1.9-2.0% for 2009. The uncertainty of the forecast is likely to be indicated by a spread that is wider than the ± 0.4 percentage points usually projected in March. We could envisage a range of 1.0 to 2.2% for 2008.

We regard the lower half of the range as realistic; the growth risks in the euro area have increased rather than decreased over the last few weeks: firstly, higher energy and commodity costs are squeezing companies' margins and households' purchasing power. Secondly, the appreciation of the euro is hurting companies' price competitiveness. Exports from the eurozone have already been losing momentum significantly over the past few months. Moreover, exchange rate developments seem to be increasingly affecting location and thus investment decisions. Thirdly, higher credit costs, tighter lending conditions and economic uncertainty will probably dampen investment activities. This will be particularly noticeable in residential construction, but is also likely to have an impact on investment in machinery and equipment.

Economic sentiment is constantly declining in the euro area, and the ECB Council will have to take this into account. We forecast that in the next few weeks, its monetary policy stance will shift further towards interest rate cuts. This will cap the euro's rally.

BHF-BANK

Weekly Market Commentary

Overview

Big moves and lots of records tumbling as many are belatedly forced round to our way of thinking. Centre stage was a rapidly shrinking US dollar: $1.5240 to the Euro, CHF 1.0425, down to Yen 104.00 and even weaker against some Eastern European currencies. Sterling did not keep up and dropped to £0.7678to the Euro. All sorts of commodity futures, priced in dollars of course, saw new record highs and the CRB Index hit a new record 413.78. Best performer this month was LME Palladium up 50%, then Platinum up 25%, as were Oats and Wheat. The latter saw frantic gyrations on the CBOT as another 'rogue trader' racked up a $142M loss on his personal account. He has been sacked. The Egyptian Hermes Index is the only one to post a new high (99,643). All other indices tried to rally but have ended mostly down on the week. Interest rate futures are higher, and Treasury yields lower, as systemic problems widen; index-linked yields are lot lower. In his semi-annual testimony to the House Financial Services Committee Fed Chairman Bernanke spoke of their preference to alter rates at FOMC meetings and of the possibility of small banks collapsing. Traders are now assuming a 50 basis point cut to 2.50% for the Fed Funds target on the 18th March. Two-year TNote yields dropped to 1.71%, the lowest since April 2004.

Political and Economic Developments

Great 'white hopes' to solve the US's woes are coming and going at an increasingly alarming pace. Government cheques to all; a three billion dollar cash injection (from those who stand to benefit most) and no downgrade in credit ratings has apparently not sorted out the bond insurers; OFHEO lifting the cap on mortgage lending at Fannie Mae and Freddie Mac may have also come unstuck within the week. The Fed's willingness to slash rates is now perhaps perceived as a cast-iron lifebelt. Regulators and the authorities' increasingly desperate searches for quick fixes are just that. Band-Aid.

Underlying Themes

How long will it take stock markets to put two and two together? Chronic US dollar weakness, soaring raw material prices and relatively high borrowing costs are a toxic combination – as bad as 'sub-prime'. Much has been made of Nymex Crude Oil hitting a record $103.05 per barrel this week. According to figures from BP, the previous inflation-adjusted record high was $90.50 in April 1980. Adjusted for FX rates as well, prices are as follows: £51.00 today vs £42.00 in 1980; €67.00 today vs €90.00 then; Yen 10,750 today vs 22,625. If we also adjust for greater efficiency, the numbers are not nearly as shocking (except for US SUV owners).

What to watch for next week

Leap day today and Anglo Saxon superstition says single women may propose to unmarried men. Gents, you have been warned! Sunday March 2nd Russian Presidential election. Monday Japan January Labour Cash Earnings, US Construction Spending, February Manufacturing PMI's for various European countries and the US, EZ15 CPI, EU Finance Ministers meet in Brussels and US Vehicle Sales late in the day. Tuesday Eurozone January PPI and Q4 GDP, Japan February Money Supply and the Bank of Canada decides on rates (expect a cut of 25 to 50 basis points from 4.00%). The Reserve Bank of Australia also meets to set interest rates (expected +25 basis points to a record 7.25%). Wednesday UK February Nationwide Consumer Confidence, European and US Services PMI's, Challenger Layoffs, ADP Employment, Eurozone January Retail Sales, US Factory Orders and then the Fed's Beige Book. The Reserve Bank of New Zealand meets to set the OCR rate (expected unchanged at 8.25%). Thursday Japan January Leading and Coincident Indices, February Machine Tool Orders and the Bank of Japan starts a two-day rate-setting meeting (unanimously expected unchanged at 0.50%). Then German January Factory Orders, the Bank of England decides on rates (expected unchanged at 5.25%), as does the ECB (unanimously expected unchanged 4.00%) and US January Pending Home Sales. Friday German January Industrial Production, US February Non-Farm Payrolls and Unemployment. Saturday Malta and Malaysia hold general elections, Spain on Sunday March 9th when US clocks go forward one hour; Europe's change on the 30th.

Positioning and Technical Analysis

The unwinding of the 'carry trade', in its many guises, started again following February's much-needed corrective bounce. This ended with small 'spike highs' on many charts this week. During March equity indices and Yen crosses should trade lower and moves might pick up speed if banks write down more sub-prime and/or if other businesses start writing down asset-backed securities. We expect the US dollar to weaken further against most currencies (the South African rand an exception) with regular bouts of consolidation along the way. The only problem is that many did not expect this and have yet to sort themselves out. A stampede out of the greenback might ensue. Base and Precious Metals should remain well bid, likewise the Energy Group, but Grains, Oilseeds, and Softs could do with a bout of consolidation. Again the problem will be the speed of the US dollar's decline which we may have underestimated because predicted this so many years ago. We will not become complacent.

Mizuho Corporate Bank

Foreign Exchange Market Daily Update

The US dollar weakened against a basket of currencies. The Chicago Purchasing Managers Data came in at 44.5 versus the expected 50 for February, which is the worst since December 2001. With expectations of aggressive rate cuts to come, the dollar came under pressure as concerns over the health of the US economy was highlighted. Yesterday's surprising increase in US jobless claims and affirmation that the world's biggest economy barely grew in the final quarter of 2007 fueled worries of recession. At the next FOMC meeting in March, markets are now pricing in a 50 basis point rate cut, and giving a more than 1-in-3 chance of a 75-basis point rate cut.

The Euro continues to maintain its strength against the dollar, even after euro-zone economic sentiment deteriorated. A data showed euro-zone economic sentiment decreased to 100.1 in February from 101.7 in January, which was a slightly steeper fall than the forecasted decline to 101.2.

The British pound weakened slightly against the dollar, as sagging consumer sentiment and falling house prices boosted expectation for the Bank of England to cut rates in the near future. A survey showed British consumer morale fell to its lowest in more than 13 years in February and Nationwide Building Society reported that British house prices fell for the fourth month running in February. With economic concerns looming over the UK, the market is pricing in a 50-50 chance BoE will cut rates by June.

The Japanese yen hit a three-year high against the dollar, as Japanese data showed a surprising increase in consumer spending. Bernanke's warning on the health of small US banks on Thursday, coupled with economic woes, brought carry trades to the forefront as investor risk appetite was whetted.

The Canadian dollar strengthened against the US dollar after Bernanke's comments on Thursday that some smaller US banks may fail due to housing slumps and unemployment may increase. The loonie maintained its strength against the greenback even after a report showed Canada's international trade fell into deficit for the first time since 1999 in the 4th quarter.

The Australian and New Zealand dollars maintained its strength over the US dollar. As commodity prices climb, analysts are now saying the Aussie dollar may soon rise to equal the US dollar in value. Analysts speculate that the Reserve Bank of Australia will probably raise its interest rates at their next meeting on March 4th to curb inflation.

Union Bank of California
The Bank of Tokyo-Mitsubishi Group

U.S. Market Update

- Dow -208 S&P -23.4 NASDAQ 39

Indices are sliding on continued disappointing economic data and concerns regarding the financial sector. A worrisome Q4 earnings report from AIG got the ball rolling in the wrong direction again. Downgrades in BCS and RBS overnight along with news a UBS analyst increased estimates for worldwide losses related to the financial crisis only added to the pressure heading toward the US open. Inflation continues to remain a concern with the Y/Y PCE Deflator coming in at 3.7% and monthly raw materials prices rising 3.4%, but it is clear growth concerns remain the focus. The Feb Chicago Purchasing Managers Index had its lowest reading since late 2001. The weakness in equity markets has again coincided with a flight to quality in the bond market. The 2-year yield has fallen below 1.7% and the 10-year hovers around 3.56%. Expectations for a more aggressive Fed have crept into the Fed fund futures market. The April contract is now projecting roughly 60% odds of a 75 basis point cut at the next meeting, while the July contract is now pricing in a 40% chance the fed funds rate drops below 2% by this summer. Names being hit post earnings reports include: DELL -2% AIG -7.5% DECK -10% HANS -6% BGFV -15% MENT -9% LIZ -4% VIA.B -4% MYE -13% The run-up in commodity prices is taking a hiatus with crude, gasoline, and copper futures trading slightly lower while silver, gold, and heating oil manage marginal gains.

In currencies the theme of risk aversion maintained to influence the price action as continued jitters within the financial sector is causing a new wave of unwinding of carry-related pairs. The monoline insures added fuel to the fire that started with the AIG earnings reports, after press reports that the Ambac bailout has encountered a "significant snag" over last couple days, while MBIA noted that it sees added material mark-to-market losses in January. The iTraxx Crossover index inched back above the 600 bps level to re-approach its all-time high of 615bps. ECB's Gonzalez-Paramo reiterated the view that it could take some time before the liquidity crisis disappears completely. EUR/CHF is lower by 100 pips at 1.5865 during the session. Overall, the USD remains on the defensive as February ends, but off its worst levels for the session. Oil and gold are both are off their all-time highs seen during the Asian session. EUR/USD hit fresh all-time highs above the 1.5239, while USD/CHF tested the 1.0425 level. USD/JPY tested near three-year lows of 103.63, but the USD was able to gain against the GBP as recent UK economic data points to a BOE rate cut at its March MPC meeting. EUR/GBP tested all-time highs at 0.7679 during the European morning. European equity market near session lows while fixed-income instruments were firmer. March gilts +86 ticks at 110.25, March bunds at 117.00 +95 ticks. Euro Stoxx 50 -1.8% at 3,715, FTSE 100 index -1.3% at 5,888, CAC 40 index -1.5% at 4,790 and DAX -2.1% at 6,716

Trade The News Staff
Trade The News, Inc.

Daily Report: Dollar Remains Weak, Yen Surges on Carry Trade Unwinding

The trend continues as the week is close to an end. While dollar remains generally weak across the board, the strength in yen is rather impressive, with yen crosses topping the occupying the highest spots in the top movers chart. Markets are seen scaling back high risk investments after Fed Bernanke mentioned yesterday that "there probably will be some bank failures." Weakness in the US and Asian stock markets prompted carry trade unwinding, which is evident in the rally in yen as well as the strength in Swiss Franc comparing to other European majors. Technically speaking, today's break of 104.96 in USD/JPY indicates that the whole down trend from 124.13 has already resumed, now targeting 101.22/65 long term support level.

Economic data released so far today saw Japan national CPI unchanged at 0.8% yoy in Jan. Unemployment rate was also unchanged at 3.8%. Housing starts dropped -5.7% yoy in Jan, better than expectation of -12.3%.Construction orders fell -2.5%. Sterling remains the weakest one among European majors, as seen in EUR/GBP and GBPCHF crosses, on the view that UK is most affected by US's subprime mortgages problems. Nationwide house prices fell -0.5% mom in Feb, worse than expectation of 0.0%. Yoy rate was down from 4.2% to 2.7% vs consensus of 3.6%.

On the other hand, Euro remain supported by solid data from Germany. Feb was unchanged at 2.8% yoy though HICP was down from 3.1% yoy to 2.9% yoy. Retail sales report in Germany was solid, showing 1.6% mom growth pushing yoy rate back to positive territory at 0.8%.

Focus will turn to Eurozone HICP, which is expected to be up from 3.1% to 3.2%. Unemployment rate is expected to drop further from 7.2% to 7.1% in Jan. Sentiments indicators are expected to show only mild deterioration. Other data to be released in European session include UK Gfk consumer sentiment and Swiss KOF leading indicator.

From US, markets will look into the personal income and spending report today which are both expected to show 0.2% growth in Jan only. Headline PCE and core PCE are both expected to slow slightly to 2.1% and 3.4% yoy respectively. Chicago PMI is expected to dive below 50 to 49.7.

Will U.S. Data Confirm A Recession, And End The Debate?

FEB 29

US Personal Spending (13:30 GMT; 08:30 EST)
Expected: 0.2%
Previous: 0.2%

US Personal Income (13:30 GMT; 08:30 EST)
Expected: 0.2%
Previous: 0.5%

What Are The Markets Facing?

Yesterday, Ben Bernanke testified that the Fed still sees considerable downside risks to the U.S economy and signaled that future rate cuts are forthcoming. The upcoming personal spending and income numbers may confirm those concerns and end any debate that the U.S. is in a recession. Personal spending is expected to maintain its weakest pace since June printing at 0.2% for the second consecutive month, as U.S. consumers are feeling the affects of their declining wealth due to the housing slump. If the recent decline in retail sales- confirmed by Sears reporting today that their revenues declined 47%- is any indicator, we may see a weaker number than expected. Consumer spending power which has been sapped by record oil prices and rising inflation is expected to be weighed down further as personal income is expected to slow to 0.2% from 0.5% the month prior. After equity markets were uninspired by the prospect of future cuts, it is very clear that investors have come to the conclusion that the U.S. is in a recession. Additionally, there is growing fear that the Fed's breakneck pace of rate cuts will lead to stagflation.

Bonds - 10-Year Treasury Note Futures

Treasuries are forming a falling wedge and may break out with upside potential to 118.00. After Fed Chairman Bernanke signaled that future rate cuts are in store treasuries should see the contract bid up. Declining personal Income and spending will only bolster this case. However, a surprise to the upside of the U.S. data may be enough to derail the potential rally and send bonds lower.

FX - EUR/USD

The Euro has continued to make fresh all time highs after Fed Chairman Bernanke's testimony yesterday signaled more rate cuts are in store. The pair broke the mythical 1.50 barrier after Vice chairman Kohn first signaled the Fed's dovish stance and continues to rally setting an all time high of 1.5148 this morning. Two reports due out Friday are expected to fuel Euro bull sentiment as personal income and spending are expected to show that considerable downside risk remains to the U.S economy. The statistical mix of slow wage growth and falling home prices have taken a toll on consumers, and any further deterioration in these indicators will signal the U.S. is already in a recession. Although traders may look to take profits after the latest rally, Jamie Saettele's latest report on the EUR/USD pair sees near-term support at 1.4981 and “plenty of upside potential.” The Fed will be closely monitoring all fundamental indicators and stronger than expected consumer data may lesson their zeal to cut rates and reverse the current dollar rally.

Equities - Dow Jones Industrial Average

A daily chart of the Dow Jones Industrial Average shows that it has run into resistance at the 12,725 level. Friday's release of US personal Income and personal sending could weigh on the Dow as consumers are feeling the pinch. Fed Reserve Chairman Ben Bernanke's testimony Wednesday proved that the Fed would maintain a dovish posture as economic weakness persists, but it didn't inspire investors as the market closed relatively unchanged. Despite the fact, that further liquidity in the market could enhance growth prospects for many on Wall St and perhaps lend support to falling home prices as mortgages are at the heart of the credit crisis. The Office of Federal Housing Enterprise Oversight, the regulator of Fannie Mae and Freddie Mac, said it would move ahead with a plan to remove the cap on the value of mortgages they could buy. The move is anticipated to increase liquidity in the housing industry. Reports of the plan sparked a rally in financials and homebuilders yet fears about the overall health of the economy capped continued strength. Weak consumer spending and income data may spark an equity sell off, as the U.S consumer has been carrying the economy in light of all its problems. Stronger than expected data may reignite the belief that the U.S. consumer is resilient enough to keep the economy afloat until the recent and expected rate cuts have their intended affect, and rally equities through resistance.

DailyFX

Foreign Exchange Market Daily Update

The US dollar remained weak against a basket of currencies after meager US data were released today. US economic growth was unrevised at an annual pace of 0.6 % in the 4th quarter which was weaker than the forecasted 0.7 % due to subsiding home sales and slumping inventories. GDP grew 2.2 % for all of 2007, which was the slowest since 2002. Furthermore, US workers applying for unemployment benefits rose 19,000 last week, which increased to a seasonally adjusted 373,000 in the week ending February 23rd. Investors point to the GDP and jobless claims data as further evidence that the US is falling into recession.

The Euro continued to strengthen against the dollar with signs of a weakening US labor market pointing to further rate cuts by the Fed. Analysts forecast euro momentum to continue unless weak Euro-Zone data is reported.

The British sterling remained steady against the dollar. Sterling gains were capped with ongoing concerns over UK banking sectors. Royal Bank of Scotland posted in-line earnings and raised its dividend, but also raised its writedowns on assets to GBP 2.13 billion (approximately $4.2 billion). Central bank deputy governor John Gieve indicated that the development of inflation will be the key driver to whether the BoE would be cutting rates.

The Japanese yen strengthened against the dollar after meek US data was reported. Bank of Japan board member Atsushi Mizuno expressed concern about the side effects than the merits of any interest rate cuts, and speculated that bringing Japan’s low rates to normal levels would be necessary in the long run.

The Canadian dollar strengthened against the US dollar after weak US data was reported. Furthermore, crude oil and gold traded near record levels. Commodities account for nearly half of Canada’s exports.

The Australian and New Zealand dollars continued to trade at record highs against the US dollar. With weak GDP and increase in jobless claims in the US, the greenback continues to weaken against the Aussie and the kiwi.

Union Bank of California
The Bank of Tokyo-Mitsubishi Group

Euro/Usd is at Key Resistance Levels again

As the Euro is again targeting key resistance levels against the U.S. dollar, inflation in the United States appears to be manifesting the same cyclical path shown during past recessionary periods. Europe, in the mean time, awaits the European Central Bank (ECB) meeting of next week.

Inflation is always inflation

Inflation picked up again in the United States, supported by energy and food prices. In January, the Consumer Price Index (CPI) rose 0.4% (+0.3% expected) month over month, matching December numbers and it increased 4.3% on an annual basis. Core inflation rose 0.3% month over month and is now 2.5% versus December's 2.4%. The economic slowdown might be beneficial over the medium term, as a contraction of consumer spending could temper the increase in core consumer prices. In fact, in the past, inflation had usually followed the business cycle. During the recession of 2001, core inflation increased to almost 3.00% and fell near 2.0% during the first year of the recovery. In 1990/1991, core inflation moved up above 5.0% to then decline slightly below 4.0% in the first year of recovery.

Despite inflations aggressively pushing higher, the Federal Reserve will remain focus on the economic slowdown and should cut rates again in the first part of 2008. The labor market is under pressure with stocks still struggling and housing declining. In January, the Federal Reserve Bank of Philadelphia's index, which tracks the manufacturing activity in the Philadelphia region, slid to -24 from -20.9, the lowest level of the past seven years. In reality, for the first time in many months, housing starts doubled expectations and increased 0.8% in January. The multiple components rose 22.3% while single houses fell 5.2%. However, the situation remains critical with inventory at a highest level and permits declining 3% on the top of December's fall of 7.1%. In fact, during the week ending February 15h, the Mortgage Bankers Association's (MBA) mortgage application index, which surveys the mortgage lending trends among various financial institutions, slumped almost 23%.

Awaiting ECB meeting

Like elsewhere, inflations stays a constant menace to the European's economy and will make it difficult for the European Central Bank (ECB) to cut rates in the nearest future. In January, the German Producer Price Index (PPI) for goods was 3.3% (2.8% expected), much higher than December's 2.5%. Excluding the volatile energy sector, prices were up 2.5% year over year. ECB cut its economic growth forecast to 1.8% this year, while it increased inflation prospective to 2.6%. Unit labor costs are probably the greatest cause of inflation and workers in Germany are already demanding higher pay to balance the increase of commodity prices. As an example, IG Metall, the largest labor union in Germany, won a 5.2% wage increase last week to March 2009. Nonetheless, as growth is softening globally, cutting rates could become a reality over the medium term. For now, however, the European economy still gives signs of vitality. In fact, after falling 2.5 points to 50.6 month over month in January, the Eurozone PMI for the services sector flash estimate increased to 52.3 in February. At the contrary, the PMI manufacturing was practically unchanged at 52.3 from 52.8 in January. Spending has remained overall strong, while exports remained overall supportive. Nevertheless, capital flows appear to be tempering its support to the Euro. In December, the current account registered a deficit of Euro 10.3 billion, as direct investments showed another important decline.

Eur/Usd is again at key resistance levels

EUR/USD reached again the key resistance at 1.4850/1.4950. It is at the conjunction of various long term trendlines and the higher Bollinger band. It should be overcome with decision for higher prices. A swing above 1.5070 would reinvigorate the long term bullish trend and lift the European currency to 1.5150, 1.53. A move below 1.4350 could instead quickly target 1.4300, eventually, 1.41/1.38, if 1.4260 is overcome.

GBP/USD is consolidating between the support at 1.93/1.94 and the resistance at 1.98/1.99. They are both at the conjunction of various support/resistance lines putting the short term trend in a more neutral stance. A breakout above 1.9950 could lift the British Pound to 2.0010/2.0150. A decline below 1.9260 would instead let the British Pound to slip to 1.9210/1.9150.

USD/JPY is dancing at the important support area at 105.00/104.70, where various trendlines and the lower Bollinger band meet. It must be overcome with decision for lower prices. A move below 104.40 could target 103.80, 103.0. A breakout failure could take the U.S. dollar into higher levels, considering the large divergence between the Rsi indicator and the pattern on the daily and weekly charts. The resistance line at 109.00 is on target. A move above 109.80 is nevertheless requested for 110.60, eventually 111.50.

Angelo Airaghi
MG Financial Group

Economics Weekly: Array of UK, US and Euro Zone Data; Bernanke Testifies

Key UK events this week include updates on consumer confidence, house prices, the second estimate of Q4 gdp and speeches by two BoE MPC members. Data including employment and retail sales have surprised to the upside over the last two weeks, forcing futures markets to make further revisions to their expectations of substantial rate cuts this year. However, dovish speeches by MPC hawks Besley and Sentance last week made clear the BoE is likely to cut rates below 5.25% if downside risks to the economy materialise.

In the US, Fed chairman Bernanke will testify on the economy on Wednesday. The Fed last week scaled back its 2008 estimate of gdp growth to 1.6% but revised up its inflation forecast to 2.1%. Bernanke may elaborate on how he Fed balances the diverging paths for these two principal drivers of monetary policy, and he is expected to reaffirm that the Fed is ready to take further action to prevent a worsening of the housing and economic downturn. Revised Q4 gdp data, house prices and new and existing home sales will be released during the course of the week.

The next ECB meeting is still two weeks away and this means that markets will concentrate on interim data, like leading activity indicators and inflation. The latest German IFO survey and the EC confidence indicators will give detail on how businesses and consumers are reacting to financial market events and rising commodity prices. There are very few signs that inflation will abate in the near term especially after the latest spike in oil and food prices. Euro zone inflation data for January is due on Friday.

Economic data from the UK last week reaffirmed the resilience of the economy and defied the more pessimistic forecasts based on the impact from the financial market turmoil and the higher cost of funding. Whether it is reflected in lower house prices or tighter access to credit, to date it has not caused a dramatic slowdown in consumer spending. Retail sales rose in January at the fastest rate in 11 months. Prospective weakness in household spending was cited last week by MPC members Besley and Sentance, two of the BoE's most prominent rate hawks, for expecting weaker UK economic growth. Overall, the comments signalled the level of alert on the MPC to a challenging backdrop for growth that could justify another cut in interest rates. With this in mind, markets will this week focus on updates by the CBI on retail turnover on Tuesday and on consumer confidence and mortgage activity on Friday. In between, the 2nd estimate of Q4 2007 gdp is forecast to be confirmed on Wednesday at 0.6% q/q, with slightly stronger household spending potentially mitigating a greater drag from net trade. The Nationwide will publish the results of its February house price survey. MPC members Lomax and Gieve may add to the dovish BoE chorus during their respective speeches on the economy on Tuesday ad Wednesday.

A busy week of US data releases will be dominated by Fed chairman Bernanke's testimony to Congress on Wednesday (repeated on Thursday). The Fed last week published its updated 2008 and 2009 staff estimates for growth and inflation and it is primarily in this context that markets will judge the likelihood of more US rate cuts as the central bank tries to stave off a more severe economic downturn at the expense of higher inflation. House prices are due on Tuesday, and existing and new housing inventories data on Monday and Tuesday may give some indication about future levels of residential construction. The second estimate of Q4 2007 gdp is due on Thursday and may show an upward revision from the advance 0.6% estimate due to a lower trade deficit in December. Personal income and spending data for January complete the data releases on Friday.

A stronger than forecast rebound in the euro zone services PMI last Friday cemented the outlook of no change in ECB interest rates in March. With the revised ECB estimates of 2008 growth and inflation looming in two weeks time, markets will judge this week's German IFO survey, the EC confidence surveys and euro zone inflation data in the light of a possible shift towards an easing bias.

Chart 1: Even after the latest spike, inflation adjusted prices of gold and oil are some way off their all-time highs



Chart 2: UK mortgage activity data is due this week and may offer some indication of future house prices



Wage inflation is the key to further UK rate cuts

Can wage inflation stay low if price inflation accelerates?

UK price inflation is heading back up again, yet the central bank has cut interest rates twice in three months. How can it justify this when its inflation target is 2% and the actual rate of inflation is above this level and likely to rise even further in the months ahead? The answer, of course, is that the central bank is looking for economic growth to slow such that inflation falls in the medium term.

The Monetary Policy Committee (MPC) noted in the minutes of the February meeting that 'the central projection suggested that there was most likely to be some spare capacity in the economy, even if interest rates followed the path implied by market yields. That would therefore help to ensure that inflation returned to the 2% target in the medium term'. This is illustrated in chart a, which assumed Bank rate would be cut to 4.5% in 2008 and stay there and that UK economic growth falls to well below 2% by the middle of 2008 before recovering back to trend in 2009. But the MPC was still very worried about inflation and also said in the February minutes: 'the Committee expected that higher energy and food prices would raise inflation, possibly quite sharply, in the coming months. Producer input and output prices were already rising rapidly and the decline in the sterling ERI would boost import costs further.'

Chart a: MPC expects below trend gdp growth to add spare capacity and keep inflation low...



Further, the MPC went on to say that: 'measures of inflation expectations had not fallen in line with actual CPI inflation following its peak during 2007. There was a risk that above-target CPI inflation in the near term would affect inflation expectations, and hence have some tendency to persist in the medium term.' The MPC is clearly worried therefore that the rise in price inflation will feed through into wage inflation and so into widespread inflation pressure in the economy as a whole, which would be very costly to reverse.

Latest data show that price inflation is accelerating...

So what does the actual recent evidence show? Is inflation accelerating and is the economy slowing? Chart b shows that producer output price inflation is at its highest since 1992 (producer input price inflation is at an 18 year high) and consumer and retail price inflation is accelerating. Worryingly for the MPC, survey data also show that household inflation expectations are at their highest since they began to be recorded in 1995 and have not fallen back in line with the fall in CPI in the second half of 2007.

Chart b: ...but UK price inflation is accelerating again after falling in late 2007



This would seem to suggest that the MPC is right to be concerned about inflation pressures. And the key question is, can wage inflation stay low if consumer price inflation rises even further above the 2% target in 2008, as the MPC and most other forecasters suggest? Chart d shows that there is a close link between price and wage inflation and that wage inflation is remarkably low at the moment relative to price pressure. Our forecast for CPI inflation suggests that it will rise well above target this year, probably prompting a second open letter from the Governor of the BoE to the Chancellor in just over a year.

Chart d: Will wage inflation stay low if retail price inflation does not quickly fall?



However, the UK labour market remains benign, see chart c, with annual earnings growth of 3.8% in the year to December including bonuses, and 3.7% if bonuses are excluded. Moreover, the claimant count unemployment rate stayed at 2.5% and so there was a continuation of the low wage inflation, low unemployment rate of the last 15 years, where reduced volatility (in price inflation and economic growth) has resulted in a much better wage and unemployment mix than at any time since the 1960s. We therefore have two implied criteria from the February MPC meeting minutes that would neeed to be met before interest rates are cut any further in the months ahead. The first is that the economy must slow; the second is that wage inflation must remain low.

Chart c: Can the benign mix of low unemployment and weak earnings growth continue?



Data show UK economic growth remaining more robust than expected...

UK employment grew by 175,000 in the three months to December, and the UK's employment rate rose to 74.7%, the highest since records began in 1971. Can wage inflation stay low in this environment? Moreover, if growth in the economy remains strong - it rose 0.6% in the quarter to December - and does not slow as is suggested in chart a, can the MPC cut rates any further? Certainly, economic data in 2008 so far do not suggest that the economy is slowing as sharply as is implied in the MPC's gdp fan chart. Retail sales rose 0.8% in January, and were up by 5.6% in the year. BRC and CBI retail surveys showed a better outcome than had been expected. The housing market data seem to have stabilised, albeit at lower levels, and both the services and the manufacturing PMIs are still well in positive territory. Finally, broad M4 money supply rose by 1.4% in January, contrary to many expectations of a fall, and the annual rate accelerated to 12.9%, the fastest rate since before the credit crisis broke in August 2007. As chart f shows, economic growth and wage inflation are linked: faster growth, higher wage inflation; weaker growth, lower inflation. If the economy does not slow quite soon, then wage inflation could accelerate, removing one of the main reasons why some members on the MPC agree that there is scope to cut base rate even as consumer price inflation rises further above its 2% target.

Chart e: Will rising CPI inflation put earnings growth under upward pressure?



Chart f: Will economic growth slow before wage inflation accelerates?



...raising the risk that the MPC may not be able to cut rates, particularly if pay inflation also accelerates

As the MPC noted in the minutes of its February meeting at which Bank rate was cut 0.25% to 5.25%: 'The Committee needed to balance the risk that a sharp slowing in activity would pull inflation below the target in the medium term against the risk that elevated inflation expectations would keep inflation above target.' This is indeed a delicate task but in some ways would be easier than if the economy does not slow and inflation accelerates, then the MPC may have another problem - will it have to raise interest rates even with a credit market crisis still unfolding in global markets that could affect UK companies?

Full report here

Lloyds TSB Bank

US Economic Indicators Preview

(Week of 25 February to 2 March 2008)

- Producer price inflation could have accelerated in January
- Consumer confidence indicators are likely to have fallen significantly in February
- January durable goods orders will probably have lost most of the previous month's gains

Indicator	Date	BHF forecast	Consensus forecast	Previous
Existing home sales / Jan	Mon 25 Feb, 16:00	4.77m	4.80m	4.89m
Producer prices (PPI) / Jan	Tue 26 Feb, 14:30	0.6% mom 7.3% yoy	0.4% mom 7.2% yoy	-0.1% mom 6.3% yoy
PPI ex food & energy / Jan	Tue 26 Feb, 14:30	0.3% mom 2.3% yoy	0.2% mom 2.2% yoy	0.2% mom 2.0% yoy
Consumer confidence / Feb	Tue 26 Feb, 16:00	80.0	82.0	87.9
Durable goods orders / Jan - ex transportation	Wed 27 Feb, 14:30	-4.2% mom -1.6% mom	-4.0% mom -1.4% mom	5.0% mom 2.3% mom
New home sales / Jan	Wed 27 Feb, 16:00	600k	600k	604k
Bernanke congressional testim.	Wed 27 Feb, 16:00	Presentation of the Monetary Policy Report
GDP / Q4 (prel.) PCE core deflator / Q4	Thur 28 Feb, 14:30	0.8% qoq 2.7% qoq	0.7% qoq	4.9% qoq (Q3) 2.0% qoq (Q3)
Initial jobless claims / 23 Feb	Thur 28 Feb, 14:30	360k	350k	349k
Personal income / Jan Personal spending (PCE) / Jan	Fri 29 Feb, 14:30	0.1% mom 0.2% mom	0.2% mom 0.2% mom	0.2% mom 0.2% mom
PCE core deflator / Jan	Fri 29 Feb, 14:30	0.3% mom 2.2% yoy	0.2% mom 2.1% yoy	0.2% mom 2.2% yoy
Chicago PMI / Feb	Fri 29 Feb, 15:45	49.0	49.6	51.5
UMI consumer sent. / Feb (final)	Fri 29 Feb, 16:00	69.5	70.0	69.6 (prel.) 78.4 (Jan)

Existing home sales fell sharply by 2% mom in December and were 22 % lower than in the previous year. Pending home sales, which have a forerun of about 2 months to existing home sales, declined sharply at the end of 2007. In addition, home prices have not yet stopped declining, and falling prices are raising real financing costs, which is also likely to dampen sales. We expect January existing home sales to have fallen to 4.77m, the lowest level since 1998.

At 4.7%, the December decrease in new home sales was even more marked. The median home price plummeted by almost 11% mom, and months supply continued to rise. We forecast that new home sales will have fallen to 600k, thus remaining close to their 13-year low.

Producer prices (PPI) declined by 0.1% mom in December, but given that import prices rose significantly by 1.7% mom mainly due to energy prices, January PPI could have gone up markedly too, by 0.6% mom. The much higher price component of the ISM manufacturing and the Philadelphia Fed's prices paid index also indicate a relatively sharp increase. The annual rate would thus exceed the 7-% mark. Core PPI could have increased by 0.3% mom and 2.3% yoy.

The University of Michigan's (UMI) preliminary February consumer sentiment plummeted from 78.4 to 69.6, and the ABC consumer comfort poll dropped to the lowest level since 1993. The Conference Board's consumer confidence is likely to have followed suit and declined from 87.9 to about 80.0 in February, which would be the lowest level since September 2003. This will probably have been partly due to the fact that non-farm payrolls declined in January for the first time, and the recent rise in jobless claims. At 69.5, we are not expecting the final UMI consumer sentiment to differ much from the low preliminary result, as the most recent rise in crude oil prices could have prevented the index from recovering.

Durable goods were remarkably strong in December and rose by 5.0% mom, particularly due to aircraft orders. As Boeing aircraft orders decreased by 77 % mom and vehicle orders probably remained weak, durable goods orders are likely to have lost most of the previous month's gains, falling by 4.2% mom. Durable goods orders ex transportation also went up sharply by 2.3% mom in December, as non-defense capital goods orders ex aircraft showed a surprising gain. However, given the economic slowdown and tighter lending standards, we expect capital goods orders to have suffered a setback, and thus durable goods orders ex transportation could have fallen by 1.6% mom.

The advance estimate of GDP growth in Q4 showed a sharp slowdown from 4.9% to an annualised 0.6% qoq, mainly due to significant negative contributions from residential and inventory investment and smaller positive contributions from private consumption, corporate investment, government spending and net exports. The preliminary results will probably be a little higher: due to the noticeable improvement in the December trade balance, net exports could be revised upwards, and inventories also turned out slightly better than estimated at first. However, the revision in retail sales suggests that consumer spending was somewhat weaker. We expect the preliminary GDP to have gone up by 0.8% qoq in Q4. The PCE core deflator is likely to be confirmed at 2.7% qoq, after 2.0% in Q3.

Initial jobless claims have been trending upward recently, and the 4-week moving average has reached 360k, which is also our forecast for jobless claims in the week ending 23 February. However, the fact that the reporting week included a national holiday adds uncertainty to the forecast.

We expect personal income to have risen by a mere 0.1% mom in January, as weekly earnings declined due to a drop in working hours. We also forecast that personal spending will only have risen slightly by 0.2% mom, mainly due to higher gasoline prices. Contrary to the retail sales report, we do not expect car sales to have supported spending. As the PCE deflator will have gone up by at least 0.3% mom, real personal spending would have fallen in January. Just like core CPI, the PCE core deflator could have increased by 0.3% mom, as medical care costs seem to have gone up noticeably. The annual rate might remain at 2.2%. In its baseline scenario, the FOMC is no longer expecting the core PCE deflator to fall below 2% in 2008.

The Chicago Purchasing Manager Index already went down sharply in January, dropping from 56.4 to 51.5. Given that it is no longer a manufacturing index only, and that the ISM non-manufacturing index plummeted in January, the Chicago PMI could well have fallen to about 49.0, below the expansion threshold, in February.

Fed president Bernanke is invited to present the new Monetary Policy Report in Congress on 27 February. The revised forecasts were already included in the latest FOMC minutes (see graph on the right). Mr Bernanke is likely to forecast that economic growth will strengthen in the 2nd half of 2008 due to fiscal and monetary stimulus. But he will also emphasize the downside risks, thus leaving the door wide open for further rate cuts.

BHF-BANK

EMU Economic Indicators Preview

(Week of 25 February to 2 March 2008)

- Both the February German ifo business climate and the March GfK German consumer confidence are expected to have remained unchanged at best
- M3 growth probably accelerated to 11.6% yoy in January
- The German adjusted unemployment rate could have declined slightly to 8.0% in February
- CPI inflation in Germany is likely to have accelerated slightly to 2.8 % yoy in February
- German retail sales might have decreased again in January
- EMU industrial confidence and economic sentiment could have stabilized in February

Region	Indicator	Date	BHF forecast	Previous
GE	GDP / Q4 2007 rev	Tue 26 Feb, 8:00	0.3% qoq 1.8% yoy	0.7% qoq 2.5% yoy
IT	Business confidence / Feb	Tue 26 Feb, 9:30	91.4 -0.2% mom	91.6 -0.1% mom
GE	ifo business climate index / Feb	Tue 26 Feb, 10:00	103.4 0.0% mom	103.4 0.4% mom
GE	GfK consumer climate / Mar	Wed 27 Feb, 8:10	4.5	4.5
EMU	Money supply M3 / Jan	Wed 27 Feb, 10:00	11.6% yoy 11.8% 3ma	11.5% yoy 12.1% 3ma
FR	Consumer confidence / Feb	Thur 28 Feb, 8:45	-35 -1.0 pp mom	-34 -4.0 pp mom
GE	Unemployment / Feb (number, change, rate)	Thur 28 Feb, 9:55	3.640m (nsa) -607k yoy (nsa) 8.7% (nsa) 3.357m (sa) -55k mom (sa) 8.0% (sa)	3.659m (nsa) -626k yoy (nsa) 8.7% (nsa) 3.412m (sa) -89k mom (sa) 8.1% (sa)
GE	CPI / Feb	Fri 29 Feb	0.5% mom 2.8% yoy	-0.3% mom 2.7% yoy
GE	CPI / Jan f	Fri 29 Feb, 8:00	-0.3% mom 2.7% yoy	0.5% mom 2.8% yoy
GE	Retail sales / Jan	Fri 29 Feb, 8:00	103.7 -0.5% mom -3.2% yoy	104.2 -1.0% mom -7.0% yoy
EMU	HICP / Jan f	Fri 29 Feb, 11:00	-0.4% mom 3.2% yoy	0.4% mom 3.1% yoy
EMU	Unemployment rate / Jan	Fri 29 Feb, 11:00	7.1%	7.2%
EMU	Industrial confidence / Feb	Fri 29 Feb, 11:00	1.2 0.0 pp mom	1.2 -0.4 pp mom
EMU	Economic sentiment / Feb	Fri 29 Feb, 11:00	101.7 0.0% mom	101.7 -1.6% mom
IT	HICP / Feb p	Fri 29 Feb, 11:00	0.0% mom 3.0% yoy	-0.8% mom 3.1% yoy
IT	GDP / Q4 2007 and annual GDP 2007	Fri 29 Feb, 12:00	-0.3% qoq 0.5% yoy 1.6% yoy	0.4% qoq 1.9% yoy 1.9% yoy

M3 growth in the euro area will probably have remained strong in January. In general, the yield curve has been flat or even inverted, thus offering little incentive for longer term investments. We expect M3 to have risen at an annual rate of about 11.6%, slightly stronger than in December. This would amount to a monthly increase of about €75bn, broadly in line with the 6-month average. Around the turn of the year, investors had switched from overnight deposits into time deposits. Therefore, M1 growth declined to 3.1 % yoy. Part of this shift is likely to have been reversed in January, accounting for somewhat stronger M1 growth. Credit growth (MFI loans to domestic private non-financial sectors) is likely to have slowed from 11.1 to 10.7% yoy, mostly due to loans for house purchases.

In February, the German ifo business climate index might have remained unchanged at best, after having improved unexpectedly in January. The US ISM manufacturing index and the German ZEW economic sentiment have both recovered and the German yield spread has improved slightly, with both short-term and long-term interest rates having increased somewhat. However, the crude oil price has gone up again recently and the euro has remained strong. Last but not least, the DAX performance index plummeted in January and has been weak ever since. For similar reasons, we are expecting the March GfK German consumer confidence to remain more or less unchanged and the Italian business confidence and the French consumer confidence to have continued declining in February. Therefore, EMU industrial confidence and economic sentiment could have remained unchanged in February.

German retail sales are expected to have continued their decline in January, because retailers' business assessment and consumer confidence had deteriorated. German GDP in Q4 2007 is not expected to be revised substantially. The detailed breakdown of the components will show that net exports and investment in machinery and equipment had a favourable impact on overall GDP, with imports weaker than exports. However, private consumption, investment in buildings and changes in inventories will probably have dampened GDP growth. Italian GDP is likely to have decreased significantly in Q4, just like Italian industrial production. However, this forecast is rather uncertain, due to methodological changes.

On Thursday, the first German Länder are expected to publish state CPI data for February. Subsequently, the preliminary results for national German CPI in February will be released. We expect German inflation to have increased by 0.5% mom and 2.8% yoy. The rise in monthly inflation will have been mainly due to seasonal factors, as prices for package tours and accommodation services surged as well as clothes prices. Energy prices could have had a slightly positive effect, if any. Food prices could have gone up again. The results for consumer prices in February will take account of the base year change as well as the final results for consumer prices in January which will also be published on Friday. We would like to point out that there is a higher degree of uncertainty in our forecasts than usual due to the change of the base year. With the last base year change five years ago, yearly inflation rates tended to be slightly higher than before. HICP inflation in the EMU is likely to be confirmed at 3.2% yoy in January, although there is a risk that the rate could be slightly higher. This would correspond with a monthly inflation of - 0.4%.

Adjusted unemployment fell sharply by 89k in January, much more markedly than had been estimated. The normal weather-related negative effect on outdoor jobs was dampened by relatively mild temperatures and the relief offered by the winter short-time allowance. Thus the decline in adjusted unemployment seems to be exaggerated this winter, and there will probably be a setback in spring, particularly as economic growth is slowing down. However, in February temperatures were again higher than usual. Thus we expect adjusted unemployment to have dropped by 55k in February, although the decline in unadjusted unemployment could have been quite modest.

We expect the harmonised EMU unemployment rate to have fallen slightly again by 0.1 percentage points to 7.1% in January, as the German figures indicate an improvement. As unemployment is a lagging indicator, the credit market turmoil is not likely to have had a significant negative impact yet.

BHF-BANK

U.S. Market Update

- Dow -141 S&P -14.7 NASDAQ -25.2

Equity and Bond markets continue to focus on the plunging U.S Dollar and its relationship to commodity prices around the world. Indices are swooning to new lows late in the morning session as comments from Barnanke's testimony on the hill cross. Overall his remarks leave the door open to continued aggressive rate cuts going forward which has maintained pressure on the Greenback. Following a larger than expected increase in weekly unemployment claims and preliminary Q4 annualized GDP of 0.6%, the Fed Chairman noted he does not believe credit disruptions are near an end that there will probably be some bank failures. Treasury prices are climbing with 10-year yield falling back towards 3.7%. The April fed fund future contract has seen the odds of a 75 basis point cut push back towards 40% and the July contact is fully pricing in a 2% fed funds rate. Shares of Apple are helping the NASADQ hold up better than the other indices after the COO reaffirmed growth projections for the iPhone. The energy complex is also outperforming as natural gas futures surge some 4% after weekly inventory data. OIH +1.8% MFGlobal is sliding 20% after the company disclosed they would be taking a large hit from the wheat trading operations.

The USD remains soft ahead on month end trading as oil and gold maintain upward momentum. Dealers are noting that the appetite for commodities is being seen by pension funds. Calpers, which has $240 billion in assets, agreed at its Feb. 19 board meeting to hold between 0.5 percent and 3 percent of its assets in commodities. NYMEX crude moving back towards the 102 level during the session while gold remains above $965 per oz. EUR/USD hit fresh all-time highs above the 1.5190, while USD/CHF broke below the 1.0530 handle. Verbal rhetoric continues to ebb out from various European officials. Swiss Nestle CFO stated that the strong CHF posed challenges, but added that it will not prevent co. from achieving its financial targets. Commodity currencies holding steady. USD/CAD at 0.9730, while AUD/USD at 0.9470. Carry-related pairs focused on continued credit market concerns. US mortgage company Thornburg noted that it saw sudden adverse change in mortgage market conditions, especially on Alt-collateral since Mid-Feb. London hedge fund, Peloton Partners, has liquidated its ABS fund. EUR/CHF is drifting lower towards the 1.60 level. Fed's Bernanke noted that credit disruptions are 'not near' an end.

Trade The News Staff
Trade The News, Inc.

Japan: Manufacturing Losing Momentum

Manufacturing in Japan currently is clearly losing momentum as industrial production in January declined more than expected, -2.0% mom/+2.5%yoy (consensus: -0.6% mom/+3.6% yoy). According to production plans production is expected to decline by 2.9% mom in February. However this decline is expected to be reversed by a +2.8% mom increase in September (see chart).

The loss of momentum in industrial production is partly explained by slower export growth. Real export growth has slowed from 6% 3m/3m in mid 2007 to about 2.5% 3m/3m in January (see chart). However export growth has stabilised - at least for the moment - on the back of surprisingly strong January trade figures, and at 2.5% 3m/3m growth export growth is still quite respectable. With industrial production currently declining -0.8% 3m/3m export performance is not the only the only reason for the current weakness. Domestic demand probably has been a major drag on industrial production since mid 2007 on the back of both weak private consumption and the plunge in housing construction.

However there are some comforting signs that industrial production is not going to collapse in the short run:

- Actual shipments only dropped -0.9% mom in January returning the inventory/sales ratio to normal levels (see chart). Looking at actual shipments the trend over last 3 months has been flat (0.0% 3m/3m) rather than declining, as witnessed by the industrial production figures (-0.6% 3m/3m).
- Growth in real exports has stabilised, and overall growth is still respectable and indicates that net exports will continue to contribute positively to GDP growth in Q1 2008 although less than in Q4 2007. That said, export growth is expected to slow further in H1 2008 and there is considerable downside risk to exports.
- The negative impact on industrial production from domestic demand is expected to ease somewhat although production of construction goods continues to be a significant drag on overall industrial production (-2.0 3m/3m), there have been clear signs of stabilisation in recent months (see chart).

Conclusion:

We continue to believe that the overall trend in industrial production is flat. However, today's industrial production figures indicate increasing risk of declining industrial activity in Japan. They underline considerable downside risk to the Japanese economy as industrial activity was the main bright spot in the Japanese economy in H2 2007. We maintain our expectation of +0.3% q/q GDP growth in Q1 2008. However, today's figures underline that there is downside risk to even this weak number.

Danske Bank

Currency Updates: More Dollar Weakness

Mr. Bernanke assured the congress that the Feds stand ready to help moderate growth even if inflation is seen as rising, which spread fears among investors that the bank will cut rates and ignore inflation which might lead the U.S economy into stagflation, sending the dollar to record lows against majors and driving commodities especially gold and oil to record highs.

After breaching the $1.50 barrier for the first time ever yesterday the Euro set its highest at 1.5143, the Euro managed to stay above the $1.51 levels since early this morning to set a high for the day at 1.5125 yet started declining afterwards to set a low of 1.5086 so far, the target is now set at the $1.52 levels since no major resistance levels are standing on its way to the upside.

The Pound on the other hand was not supported by the same strong momentum the Euro had, managing only to incline to the $1.99 levels yesterday but could not hold above it for too long as it dropped back to the $1.97 this morning. The Pound recorded a high of 1.9847 and dropped to set a low of 1.9777.

While against the Yen, the dollar seems to have settled among the 106 levels, the USD/JPY pair remains trading within very narrow ranges since early this morning, recording a high of 106.50 and a low of 106.18.

As for other majors against the Yen, the Euro managed to settle within the 160s level, while the Pound dropped against the Yen back to the 210 levels.

Crown Forex

US Dollar Under Stress as Bernanke Stands Ready to Cut Rates

The US dollar fell to fresh record-lows against the euro, as a speech by Fed Chairman Ben Bernanke confirmed that the central bank stands ready to cut interest rates further in order to support domestic economic growth. Indeed, the central banker said that growth risk continue to trump those of rising inflation, and as such the FOMC may vote to take rates lower despite strong price pressures. The euro subsequently rallied strongly against its US counterpart, while the Swiss Franc was actually the day’s largest gainer against the downtrodden dollar. The Australian dollar, New Zealand dollar, and Canadian dollar likewise gained sharply against their US namesake - further fueled by similar gains in global commodity prices. Yet we did see the New Zealand dollar fail to hold its fresh 22-year highs against the greenback; strongly disappointing New Zealand Business Confidence index results weighed on outlook for the high-flying currency. The British pound was the only other major currency to lose against the US dollar, as stagnant Gross Domestic Product numbers limited upside potential for the sterling.

Freshly released data hampered growth prospects for the US as Durable Goods orders plummeted, with the housing sector yet to show any sign of recovery. Durable Goods orders fell more than expected as rising costs curbed firms from spending and plunged to minus 5.3 percent from 4.4 percent, while Orders excluding Transportation fell to minus 1.6 percent from 2.0 percent. For the housing sector, the New Home sales data diminished the economic outlook for the US as it fell to minus 2.8 percent, holding at 588K units, with the MBA Mortgage Application release adding to the mounting pressures as it dropped to minus 19.2 percent.

Increased volatility took hold of the securities market as prices swayed throughout the trading session, but ended the on a brighter note as an intraday reversal pushed prices higher. The DJIA added 9.36 points to hold at 12,694.28 points, with IBM shares picking up the most gains while 3M and McDonald’s shares took the biggest dive. Amongst the broader indices, the S&P500 lost 1.27 points to stay at 1,380.02 points as Vanceinfo Technologies and Federal Signal Corp led the winners with Carter’s Inc and URS Corp topping the decliners.

US Treasury prices were driven up as a result of the increased volatility in the securities market, and sent risk adverse investors to seek the safe haven of risk free bonds. The flight to quality sunk the benchmark 10-year Treasury yield to 3.84 percent, while the 2-year Note yield likewise fell to an anemic 1.99 percent.

Looking ahead, volatility will likely continue across domestic financial markets; second revisions to Q4, 2007 GDP results will be released at 9:30 Eastern Time. A simultaneous US Initial Jobless Claims data release likewise holds potential to drive sharp moves in the domestic currency.

DailyFX

Foreign Exchange Market Daily Update

The US dollar fell to an all time low against a basket of currencies late yesterday and continues to weaken this morning after a lower than expected durable good report. New orders for U.S. made durable goods fell 5.3% in January, the biggest drop in 5 months. Expectations were for a drop of 4.0%. After yesterday's weak consumer confidence report and this morning's weak durable goods report, investors look for another 0.50% rate cut next month by the Federal Reserve board to fend off a recession.

The Euro climbed to a lifetime high against the US dollar after hawkish comments from ECB Governing Council member Weber stated that expectations for the ECB to cut rates fail to consider the dangers of higher inflation. Aiding the Euro was yesterday's German corporate sentiment index rose to 104.1, beating even the highest forecast. This data will further reduce the likelihood of a Euro-zone rate cut which some expect in June.

Sterling fell slightly against the greenback after Britain's largest mortgage lender HBOS fell over 8% dragging down other UK banks after it missed forecasts indicating the spillover affects from the subprime fallout has not been fully priced in. In economic news, Britain's GDP report showed household spending growth was negligible and inventories grew at its fastest rate in 20 years. Investors expect further slowing of the British economy on the heels of falling home prices, the credit crunch, and a weaker global economy.

The Japanese yen strengthened against the US dollar after another weak US economic report. The yen is trading near 1 month highs against the dollar.

The Canadian dollar strengthened against the greenback for the third day nearing 2 month highs on record oil and gold prices. Oil is at $101/barrel and gold is $960/barrel helping the commodity rich nation's currency. The loonie has risen 3.2% against the greenback, the most since 1995.

Both the Australian and New Zealand dollars reached multi-decade highs against the US dollar on the heels of record level commodities prices and very attractive yields.

Union Bank of California
The Bank of Tokyo-Mitsubishi Group

U.S. Market Update

- Dow +50 S&P +4.25 NASDAQ +13.5

U.S. indices have experienced another wild ride thus far as early weakness was attributed to selling in the European financials overnight, softer than expected Jan durable goods data, and FNM's Q4 loss of more than $3/share. Jan new homes sales did little to provide any positive momentum with a headline reading at another 13-year low and continued steep price declines. Equity market surged into positive territory after OFHEO announced a decision to remove the portfolio caps on FNM and FRE at the end of this month along with loosening some capital requirements. The early drag what was the financials has reversed with mortgage related stocks driving gains for the overall market. FNM +8% FRE +5% XLF +1% Shares of NFLX are higher by close to 10% after raising guidance. Markets continue to focus on the weakness in the Greenback with as the Euro continues to make new all-time highs above 1.51. Subsequently crude is trying to hold the $100 mark after trading above $102 overnight. Energy futures remain near session lows after weekly inventory data showed larger than expected builds in crude and gasoline stockpiles. Gold, silver and copper futures are trading up another 1 to 2% after April gold made a new all-time high overnight at $967. Treasury yields opened noticeably lower on the weaker durable goods data and some safe haven buying but sellers have entered the market as equities reversed course. The 10-year is hovering around 3.87% while the 2-year pushes back towards 2%.

In currencies, two themes emerged during the session on Wednesday. The first issue centered on the Credit market and the jitters that remain prevalent for carry related currency pairs. UK HBOS and Fannie Mae released its Q4 results, which were below consensus expectations. The second theme was the weaker USD and higher commodity prices. The USD remained broadly weaker against the major currency as dealers cite technical factors following the price action from Tuesday's session. The strong German IFO data, weak US confidence data from Tuesday's session and soft Durable goods and New Home sales figures continue to provide downside momentum for the USD. EUR/USD has tested above the 1.51 handle during the NY morning and hit lift-time lows against the CHF at 1.0632. Dealers are attributing the USD soft tone to the possibility of further cuts in Fed Funds at the March FOMC meeting, if not sooner. In addition the ECB maintained its hawkish tone on inflation. ECB's Weber reiterated that the market view on interest rates "underestimated inflation risks". ECB's Wellink noted that Euro Zone can function with strong Euro, but cautioned the difficulty of predicting the effect of FX rates on real economy. Carry-related currency pairs moved higher in the late NY morning as equity market rallied into positive territory. EUR/JPY trades at 160.70 after testing below during the morning. USD/JPY trades at 106.50 after a brief test below 106. Thus higher commodity prices were feeding upon the USD's soft tone. USD/CAD revisited its 2008 lows at the 0.9750 level, which was lasted breeched back on Dec 31st. AUD/USD hit fresh 24 year highs above the 0.94 level. European equities rebounded from session lows following the OFHEO announcement to remove the portfolio caps on Fannie and Freddie on March 1. Euro Stoxx 50 -0.1% at 3851, FTSE 100 -0.255 at 6,072, CAC 40 -0.2% at 4,962 and DAX +0.05% at 6,986

March Bunds -17 ticks at 115.24; March Gilts +5 ticks at 108.66

Trade The News Staff
Trade The News, Inc.

FOMC: No New Signals from Bernanke

Overview:

The testimony by Bernanke provided little new information relative to recent speeches and the minutes from the January meeting. The FOMC is currently sticking to its script, keeping the primary focus on the downside risks to growth. While the Chairman provided some lip-service to inflation, the speech leaves the impression that further policy easing is highly likely.

Details:

Bernanke's comments on the economic outlook and the risk assessment were very similar to the message from the minutes (Flash Comment - FOMC: Downside risks and great uncertainty, 21 February). Below are some selected passages from the speech. The entire testimony is available here.

Growth:

- The housing market is expected to continue to weigh on economic activity in coming quarters.
- Consumer spending ... appears to have slowed significantly toward the end of the year... Slowing job creation is yet another potential drag on household spending... However, the recently enacted fiscal stimulus package should provide some support for household spending during the second half of this year and into next year.
- Non-residential construction is likely to decelerate sharply in coming quarters as business activity slows and funding becomes harder to obtain.
- The incoming information since our January meeting continues to suggest sluggish economic activity in the near term.
- The risks to this outlook remain to the downside. The risks include the possibilities that the housing market or labor market may deteriorate more than is currently anticipated and that credit conditions may tighten substantially further.
- The risks include the possibilities that the housing market or labor market may deteriorate more than is currently anticipated and that credit conditions may tighten substantially further.

Inflation:

- Inflation could be lower than we anticipate if slower-than-expected global growth moderates the pressure on the prices of energy and other commodities or if rates of domestic resource utilization fall more than we currently expect.
- Upside risks to the inflation projection are also present, however, including the possibilities that energy and food prices do not flatten out or that the pass-through to core prices from higher commodity prices and from the weaker dollar may be greater than we anticipate.
- ... the Federal Reserve will continue to monitor closely inflation and inflation expectations.
- Any tendency of inflation expectations to become unmoored or for the Fed's inflation-fighting credibility to be eroded could greatly complicate the task of sustaining price stability and could reduce the flexibility of the FOMC to counter shortfalls in growth in the future.

Policy outlook:

- Although the FOMC participants' economic projections envision an improving economic picture, it is important to recognize that downside risks to growth remain. The FOMC will be carefully evaluating incoming information bearing on the economic outlook and will act in a timely manner as needed to support growth and to provide adequate insurance against downside risks.

Assessment & Outlook:

In the markets, the speech did not lead to any major reassessment of the expected path for monetary policy. Further, the speech does not affect our view that the Fed funds rate is heading for 2.0% by the June meeting. We continue to expect a 50bp easing in March, followed by 25bp at the April and June meetings.

Danske Bank

Consumer Confidence Falls Significantly in February

Consumer confidence fell 12.3 points to 75.0 in February, the lowest level since March 2003. The present situation index fell 13.7 points to 100.6 as consumers grapple with a weaker job market and rising gasoline and food prices. Despite increasing inflation concerns, consumers expectations of inflation were unchanged.

The Present Situation Declines Considerably

- The present situation index, which reflects consumers' assessment of current conditions, slipped to 100.6 from 114.3, the lowest level since November 2004. As a result, consumers' may continue to pull back on discretionary purchases. We expect consumer spending to slow to an annualized pace of one percent in the first quarter.

Weaker Job Market

- Jobs "hard to get" increased to 23.8 from 20.6 while "jobs plentiful" declined 3.2 points suggesting weaker employment growth. January's negative payroll number is likely factoring into the decline. We expect the pace of non-farm payrolls to continue to moderate.
- On a positive note, plans to buy a home increased in February

Wachovia Corporation

Producer Prices Rise Stronger Than Expected in January

Like last week's CPI report, producer prices rose more than expected in the month of January. Solid gains in food (1.7%) and energy (1.5%) drove the overall result. Excluding energy and food, prices were still uncomfortably strong. We still believe slower economic growth will place downward pressure on inflation in the second half of the year.

Food & Energy Lift the Headline Index

- The overall PPI rose 1.0 percent in January relative to the previous month, bringing the year-over-year measure up to 7.4 percent from 6.3 percent.
- Even excluding food and energy, prices rose at a solid clip last month, up 0.4 percent.

Commodity Price Pressures Still Present

- Inflationary pressures further back in the production pipeline bounced back this month. Commodity price risk is present.
- Although consumer and producer prices rose at a stronger-than-expected pace in January, we believe the Fed is more concerned with economic growth prospects than inflation and will continue to ease monetary policy at the Mar. 18 FOMC

Wachovia Corporation

U.S. Market Update

- Dow +81 S&P +5.6 NASDAQ +13.4

Indices pared early losses after IBM announced a $15B repurchase program and reaffirmed guidance. The NASDAQ was under some pressure early in the session after ComScore data spooked holders of Google. GOOG -7% BIDU -3% Earnings from some of the largest U.S. retailers continue to show a weakening economy, but in a sign that some of that weakness is already priced in shares of M +4.5%, TGT +3.3% HD +0.5% AZO +5% and JWN +3% are all trading higher. April crude has made a run above $100 with the firming equity markets following the IBM news. The oil complex is one of today's best performers with the OIH up 1.7%. Metals futures remain near session highs led by March silver +2% and copper +1% which are in the process of rolling the front month contract to May. Treasury yields were initially seen higher with the release of hotter than expected PPI data which was highlighted by the largest y/y rise in more than 15 years. Buyers came back in after the equity open when soft consumer confidence and Q4 house price index readings reaffirmed the somber tone for the U.S. economy. Treasury futures are currently hovering in the middle of today's range with the 10-year yield near 3.88%. The April fed fund futures has seen the odds of a 50 basis point cut slip below 90%.

The USD remained on the defensive throughout the US morning despite the higher-than-expected PPI data, which saw the largest yearly rise since October 1981. Dealers noted that despite the high inflation data from the US the USD maintained a soft tone as the realization that US real interest rates are negative and will remain so given the current Fed Funds expectations. None-the-less the USD is adhering to its trading range established back in Jan. Soft US consumer confidence data is also weighting upon the dollar sentiment. European currencies aided by firm German IFO data released prior to the US open, reinforcing sentiment that it is premature for the ECB to cut rates at this time. EUR/USD is trading at 1.4885. Dealer chatter contemplated that if the 1.5000 option barriers remain in effect the USD seemed poised to retest all-time lows in this pair. USD/CHF trades at 1.0845 and GBP/USD at 1.9725. Comments from BOE's Lomax noted that the MPC can do little about the rise in near-term inflation, may need to constrain demand; thus he sees inflation seems poised to rise sharply over next month. European fixed-income showed a bit of divergence in the session. Dealers noted that the strong IFO data is provided a rotation in favor of UK bonds from German instruments. March Gilts +14 ticks at 108.63 while March Bund futures were off 15 ticks at 115.47. Commodity currencies maintain a positive tone as USD/CAD tested 4 week lows of 0.9870 area as the pair broke below its 100 day moving average. Dealers are noting that M&A chatter could be supporting CAD as well. AUD/USD probing the 0.93 level.

Trade The News Staff
Trade The News, Inc.

Foreign Exchange Market Daily Update

The US dollar fell across the board after a report showed US consumer confidence dropped in February from 87.3 to 75.0, the lowest level in five years, as the labor market cooled and the economy waned. Consumers are worried about the economy due to the housing market slump, poor employment data and higher gasoline and food prices. These factors could threaten consumer spending, which already has slowed, and further push down economic growth.

The Euro climbed to a three-week high against the US dollar and soared versus the Japanese yen after the release of a strong German business sentiment survey. The February German Ifo index came in at 104.1, well above the expected 102.8, weakening the case for near-term euro-zone interest rate cuts and easing concerns about the health of the euro-zone's largest economy.

Sterling rose against the generally weaker greenback as the market caught up with the Bank of England's view that interest rates will be cut gradually, rather than sharply. Markets expect two more UK rate cuts by year-end. Look to Wednesday's second reading of UK's fourth quarter GDP for more clues.

The Japanese yen strengthened against the US dollar after a weak US report trimmed expectations of additional aggressive interest rate cuts from the Federal Reserve.

The Canadian dollar soared versus the greenback, supported by a solid domestic economy and record oil and gold prices. The commodity-linked currency has risen 2.6 percent this week with gold prices near 950.00 and crude oil above 100.00.

The Australian and New Zealand dollars continue gaining against the US dollar and Japanese yen, boosted by increased risk appetite as investors piled into higher yield currencies. Stock markets are widely used as a gauge of risk appetite and gains from this weak have encouraged a return to carry trades.

Union Bank of California
The Bank of Tokyo-Mitsubishi Group

Wholesale Prices Jump In January

Battered by bad economic news, consumer confidence plunged while wholesale food, energy and medicine costs soared, pushing inflation up at the fastest pace in a quarter century.

The Labor Department said Tuesday that wholesale inflation jumped by 1 percent in January, more than double the increase that analysts had been expecting.

Meanwhile, the New York-based Conference Board reported that its confidence index fell to 75.0 in February, down from a revised January reading of 87.3. The drop was far below the 83 reading that analysts had forecast and put the index at its lowest level since February 2003, a period that reflected anxiety in the leadup to the Iraq war.

Consumers have been shaken by a prolonged slump in housing that has pushed the country close to a recession.

A third report Tuesday showed that home prices, measured by the S&P/Case-Shiller Index, dropped by 8.9 percent in the fourth quarter of last year, the steepest drop in the 20-year history of the index.

"Home prices across the nation and in most metro areas are significantly lower than where they were a year ago," said Robert Shiller, one of the index's creators. "Wherever you look, things look bleak."

The January inflation surge left wholesale prices rising by 7.5 percent over the past 12 months, the fastest pace in more than 26 years.

The worse-than-expected performance was certain to capture attention at the Federal Reserve, which has chosen to combat a threatened recession by aggressively cutting interest rates in the belief that weaker economic growth will keep a lid on prices.

But the combination of rising inflation and weaker growth raises the threat of "stagflation," the economic malady that plagued the country through the 1970s, when a series of oil shocks left households battered by the twin problems of stagnant growth and rising inflation.

The 1 percent jump in wholesale prices followed a 0.3 percent decline in December and was the biggest one-month increase since a 2.6 percent increase in November. That gain had been driven by sharply higher energy costs.

The big jump in wholesale prices followed a report last week that consumer prices had risen by a worse-than-expected 0.4 percent, reflecting higher costs for food, energy and health care.

The wholesale report said that energy prices jumped 1.5 percent, as gasoline prices rose by 2.9 percent and the cost of home heating oil jumped by 8.5 percent.

Food prices, which have been surging because of increased demand stemming from ethanol production, rose by 1.7 percent last month, the biggest monthly increase in three years. Prices for beef, bakery products and eggs were all up sharply.

Core wholesale inflation, which excludes food and energy, posted a 0.4 percent increase, the biggest increase in 11 months. This gain was led by a 1.5 percent spike in the cost of prescription and non-prescription drugs.

The cost of book publishing was up 1.7 percent while the price of light trucks and passenger cars both rose by 0.3 percent.

Prices excluding food and energy are up 2.5 percent over the past 12 months, the fastest 12-month gain since a 2.5 percent rise in the 12 months ending in October.

Associated Press

Dollar Finds Temporary Boost From Modest Housing Data

A drop in housing sales boosted the US dollar temporarily in the Tuesday morning session with the report's details revealing a far more impressive reading than the headline print would suggest. However, before the US data was in play there were a number of other international reports moving the majors. The yen was loosing ground against the greenback in the morning hours as the government's economic outlook was downgraded for the first time in 15 minutes thanks to the cooling in US demand. Elsewhere, the pound regained ground after a BBA reading reported the first rebound in mortgage filings in months and in doing so diverging with the US's housing market slump. The euro remained range bound against its American counterpart as the market overlooked comments from officials to look ahead to Tuesday's data spread. Finally, rising commodity prices revived demand for the New Zealand, Australian, and Canadian dollars; with the New Zealand dollar notably scaling a 22-year high against the battered greenback.

From the US's own docket, the National Association of Realtors' Existing Home sales indicator reported the sixth consecutive monthly decline in sales, adding pressure to the market's growing fears of an impending recession. According to the group's statistics, sales fell 0.4 percent; though the annual pace of sales actually held unchanged at 4.89M units. In fact, the monthly change was actually the product of an upward revision to December's sales numbers, suggesting the housing recession may be finding a temporary bottom. What's more, the median home price fell to $201,100 from $210,900, suggesting demand may be responding to attractive pricing in the market. On the other hand, this data will not likely be taken as means for the Fed to abandon its rate cuts just yet. As other major sectors around the US begin to falter (like employment, the financial market and business investment), the central bank now has more than just the housing market to contend with when making its monetary policy decision.

The securities market picked up today as Standard & Poor's announced that they will continue to honor MBIA and Ambac's AAA rating, and spurred investor's willingness to take on increased risk. The DJIA rose an impressive 189.20 points to reach 12,570.22, with Acola and IBM leading the advancers, while Citigroup came out as the only loser of the Blue Chips. Among the broader indices, the S&P 500 picked up 18.69 points to leave the index standing at 1,371.80 points, led by Getty Images and Synthetic Fixed-income Securities Inc., while Cott Corp and Omnova Solutions posted the biggest decline.

US Treasury prices tumbled today as spirits were lifted after the statement by S&P, and led many investors to step away from the safe haven of risk free bonds. The 10-Year yield rose to 3.89 percent, while the 2-Year yield surged to 2.11 percent. We expect to see an overall increase in volatility as tomorrow is filled with eventful releases like the German GDP and Business Climate index due out during the early morning, followed by the US Producer Price and the S&P/Case-Shiller Home Price index later in the afternoon.

DailyFX

Market Directions: Stalemate not Checkmate

- The switchback market
- Philadelphia and the currency market
- Belgium leads the way

The euro and the dollar traversed the bulk of their recent range this week, moving from a low of 1.4613 to almost 1.4900 but came no closer to escaping the trap that has held the pair since mid November of last year. Except for a two week dip below 1.4600 in December and briefer drops in January and February the currency pair has spent seventy five percent of this period trading between 1.4600 and 1.4900. What will it take for a break out?

The old assumptions, old meaning since last August, a weak perhaps recessionary US economy and a rate easing Fed opposed to an economically steady Eurozone isolated from American problems and backed by inflation fighting ECB, are stale but they are still with us. They are incapable of driving the euro any higher or the dollar any lower. The Fed has erased 225 basis points from its funds target rate; the US economy is barely expanding with perhaps worse times ahead; the Eurozone economy has shown few concrete signs of weakness and the one important change, the ECB adoption of a neutral bias, was immediately and deliberately neutered by its own spokesman. The euro and the dollar have traveled back and forth over the same ground for three months because the essential rate and economic situation has not changed.

To paraphrase John Maynard Keynes, When the facts change sir, I will change my mind.The problem for the currency markets is the facts have not yet changed.

The biggest boost to the euro this week was given by a minor US statistic, the Philadelphia Fed Survey. This is not normally a market moving item, not even on Rittenhouse Square in Philadelphia. That it was, nevertheless, the occasion, or excuse for the largest single hour rise in the euro shows how desperate traders are for news to break the stalemate between the euro and the dollar. One thing seems certain traders will take not the euro to new highs based solely on poor US results but they will require positive Eurozone returns as well.

Even an American recession is unlikely to push the euro far beyond it old peak against the US currency unless there is evidence that the Eurozone economy will not follow America down. The euro recovery this week was not really a vote of confidence in the united currency or for the economic prospects of the Eurozone. Traders have simply pushed the equation between the euro and the dollar back to its midpoint. As the dollar was unable to push higher in the aftermath of the ECB bias adjustment because the US economy has not yet given proof that it has reached bottom, so now the euro now is unlikely to prolong its three day run to reach new highs because there is scant evidence that Europe will avoid a slowdown in turn. It will take far stronger signs of European resilience than we have seen or are likely to see, to push the euro above 1.5000 against the dollar. If the economic information is indecisive so is the market.

Friday gave another indication of the traders' mindset when the Belgium business survey showed unexpected strength in February and the market bought the euro. This small northern European country is, at least for this survey and because of the difficulty of obtaining EMU wide results, occasionally used as an imperfect proxy for the entire Eurozone. The EMU Services Purchasing Managers Index for February also gave a small boost to the euro when it came in two points above forecast.

But the Belgium survey and the services PMI are weak reeds with which to weave a story of European economic prowess. While the services PMI did have an unexpected recovery, manufacturing PMI dropped half a point and the three month average for the composite PMI (services and manufacturing) was at a two and a half year low. With EMU economic sentiment and ZEW indices at their lowest levels in more than 18 months and predicted to drop further in February, with similar dismal results coming from Germany, with Eurozone GDP growth halving from the third to the fourth quarter, with an EMU current account swinging red in December, and retail sales negative in Germany and in the EMU, a euro recovery based on Belgium and services PMI was too much too soon.

Central Banks

Federal Reserve

The minutes of the January 29th - 30th FOMC meeting indicate the governors have reduced GDP estimates for 2008 by 0.5% to a range of 1.3% to 2.0% from their previous 1.8% - 2.5% forecast. Inflation is predicted to remain above the 2.0% target range but there is no chance that this will prevent the Fed from reducing rates at least 25 bps at the March 18th meeting.

European Central Bank

The ECB successfully warned off a rapid depreciation of the euro in the wake of its bias change and with the paucity of statistics this week did not comment further on monetary policy.

Bank of England

The Monetary Policy Committee (MPC) voted 8-1 to cut rates 0.25% at the February meeting noting the balancing of growth risks and inflation dangers. David Blanchflower, the outstanding easy money advocate on the committee, voted for a 0.5% cut, citing the risk of a "very sharp [economic] slowdown".

Australia

Minutes for the February 5th meeting when the board voted to raise the cash rate by 25 basis points revealed that a more aggressive 50 point increase had been extensively discussed. According to the record, board members were concerned that the inflation situation had deteriorated and that inflation expectations had become dislodged. The discussion, in the words of the minutes was "finely balanced" with the board choosing the smaller increase in the end. This is an interesting echo of the oft stated ECB concern that inflation expectations remain anchored.

The Week in Review February 18 - 22

United States

The housing market has ceased to provide anything but bad news so the February NAHB Housing Market Index and January Housing Starts, both slightly better than forecasts, gave no support for the USD. In fact the stability is probably illusory as building permits which give a better picture of future construction declined another 3.0%.

Eurozone

The European Trade Union Confederation (ETUC) is an organization of 82 national trade unions with 60 million members and a designated "social partner" that holds regular "macro economic dialogues" with the ECB, the EMU and the European Commission on economic matters. It has demanded substantially higher wages for its members. "We want a pay raise we want it soon and we want it quickly", said John Monks the Secretary-General of the organization. In the past the unions have been warned by Jean Claude Trichet, the ECB President and other bank spokesman not to seek large wage increases that could spark a round of secondary inflation effects. But that charge was rejected by the ETUC, "There has been wage moderation. We are running out of patience with what is going on", said Monks. The ECB has warned that the bank could raise rates preemptively if it thought the inflation threat warranted. Recent ECB rhetoric has been aimed directly at prospective union wage settlements. The ETUC in its turn has warned of strikes, "Pay militancy has so far been limited. But this cannot continue in the face of rising prices". Is this the normal rhetorical posturing before wage negotiations or is it more indicative of the non-negotiable demands of each side? By historical standards European wage settlements have been restrained in recent years. With gas and food prices rising fast that moderation is under serious strain as union members demand higher wage increases from their leaders. Union membership and militancy is not an ebbing force on the continent. However, the French unions, long some of the most confrontational in Europe, lost their showdown with French President Nicholas Sarkozy last year. Compromise from all sides it the most likely result.

The EU Commission reduced their projection for GDP growth in 2008 to +1.8% from the +2.2% estimate in the November report. The study cited downside risks to growth. This study uses data from the five largest EMU countries, Germany, France, Spain, Italy and the Netherlands which together comprise 85% of Eurozone GDP. The ECB GDP estimates are due in two weeks, the last being for 1.5% to 2.5% GDP growth and 2-3% inflation in 2008. A downward revision in the GDP projections' is expected. The EU Commission information usually correlates well with the ECB.

China

January inflation was 7.1%, the highest in eleven years and a gain of more than 0.5% in one month. Though the Chinese government has raised interest rates, reserve requirements and permitted a faster appreciation of the yuan in response to previous inflation there is some disagreement whether all those policies will be repeated this time. The January CPI increase was again led by food costs. But the food supply suffered serious disruptions in January from severe winter weather. Food prices were forced higher by supply shortages not by rising demand and those supply restrictions have since eased. There is a plausible chance that the People's Bank of China (PBOC) will recognize the one time nature of January's hike in food prices and with a world economic slowdown looming choose to forego higher domestic interest rates. China's rulers have been very good at taking the long view of their economic choices, they will probably do so again. Bank reserve requirement are expected to rise again in 2008 despite 600 bps in increases in 2007.

Economic Releases February 18 - 22

United States

Tuesday: the National Association of Home Builders Housing Market Index rose 1 to 20 in February. This index has now been stable since July, falling only once in December to 18, but it is still less than half the reading of a year ago.

Tuesday: the Consumer Price Index (CPI) gained 0.4% in January, ahead of the +0.3% forecast but lower than the December reading of +0.4%. Core CPI added 0.3%, also 0.1% more than forecast; December had been +0.2%. The +4.3% elapsed yearly CPI figure was the highest since September 2005. The +2.5% core annual rate represents a steep climb from the 2.1% rate last September; in January and February CPI was +2.7%. Housing Starts rose 0.8% in January to 1.012 million units, a bit less than he forecast of 1.020 million. Single family home starts sank 5.2%, the 10th consecutive monthly decline and the lowest level in 17 years. Starts of multi family units rose. Building Permits contracted 3.0% January to 1.048 million, the eighth monthly decline in a row.

Thursday: jobless claims for the week of February 16th slipped 9,000 to 349,000, 345,000 had been predicted. The prior week was revised 10,000 higher to 358,000. The four week moving average has now reached 360,500 the highest since October 2005. At the start of the last recession in March 2001 this average was at 373,000 but the US economy and employment rolls have grown considerably since then and the equivalent level today is probably close to 400,000.

Eurozone

Tuesday: construction production dropped 0.6% in December, the fourth decline in the past six months; the elapsed year fell to -3.3%. In the fourth quarter production contracted -0.3%, in the third quarter it added 0.4% and in the second it lost 0.7%.

Thursday: the seasonally adjusted current account for the EMU 13 dropped sharply into deficit in December to -€10.3 billion from the €2.3 billion surplus in November which was adjusted up from +€0.7 billion.

Friday: industrial new orders plummeted in December falling 3.6% below November's level, leaving them only 2.1% above the base of a year ago. Although a correction had been expected after the strong October and very strong November (+11.4%) numbers, a more modest decline, -1.0% monthly to a yearly level of +8.7% had been forecast. The ‘flash' manufacturing PMI for February was as forecast at 52.3, 0.5 below January's result. The services PMI was ahead of predictions at 52.3, 50.3 had been anticipated; January was 50.6.

Germany

Wednesday: the Producer Price Index (PPI) rose 0.8% in January, four times the expected increase of 0.2%. The +3.3% rate for the year is the highest since December 2006 when it was +4.4%. In December the figures were -0.1% and +2.5% respectively.

United Kingdom

Monday: Rightmove House Prices rose 3.2% in February, 5.8% on the year. It was the first rise in prices since October of last year. In January prices shrank 0.8%; they rose +3.4% year to year.

Thursday: retail sales rose 0.8% in January far more than the median prediction of +0.1%. It was the steepest rise since February 2007 and with the yearly rate now at +5.6%, it appears the British consumer is not impressed by the housing and credit market turmoil.

The Week Ahead February 25 - 29

United States

Monday: Existing Home Sales for January at 10:00 ET; expected 4.80 million, December 4.89 million.

Tuesday: PPI for January at 8:30 ET; expected +0.4%, December +0.3%. Core PPI for January at 8:30 ET; expected +0.2%, December +0.2%. Case-Shiller Home Price Index for December at 9:00 ET; November -2.1% m/m. Conference Board Consumer Confidence for February at 10:00 ET; expected 82.0, January 87.9.

Wednesday: Durable Goods for January at 8:30 ET; expected -4.0%, December +5.2%. New Home Sales for January at 10:00 ET; expected 600,000, December 604,000.

Thursday: Jobless Claims for the week of February 23rd at 8:30 ET; expected 350,000, prior week 349,000. Fourth quarter GDP 1st revision at 8:30 ET; expected +0.8%, prior release +0.6%.

Friday: Personal Income for January at 8:30 ET; expected +0.2%, December +0.5%. Personal Expenditures for January at 8:30 ET; expected +0.2%, December +0.2%. PCE Core Price Index for January at 8:30 ET; expected +0.3%, December +0.2%. Chicago Purchasers Index for February at 9:45 ET; expected 49.8, January 51.5. University of Michigan Consumer Sentiment for February at 10:00 ET, final release; prior release 69.6.

Eurozone

Wednesday: Money Supply (M3) for January at 9:00 GMT; expected +11.4%, December +11.5%. M3 three month moving average for January at 9:00 GMT; expected +11.7%, December +12.1%. Loans to private sector for January at 9:00 GMT; December +11.1%.

Friday: final HICP for January at 10:00 GMT; expected -0.4% m/m, +3.2% y/y, December +0.4% m/m, +3.1% y/y. EMU economic sentiment Index for February at 10:00 GMT; expected 101.1, January 101.7; industry confidence, expected +0.4%, January 1.0%; consumer confidence, expected -12, January -12; business climate indicator, January 0.87. Unemployment Rate for January at 10:00 GMT; expected 7.1%, December 7.2%.

Germany

Tuesday: detailed GDP seasonally adjusted for the fourth quarter at 7:00 GMT; expected +0.3%, prior release (4th quarter) +0.3%. Detailed fourth quarter GDP year to year not seasonally adjusted at 7:00 GMT; prior release +1.6%. IFO business sentiment for February at 9:00 GMT; expected 102.8, January 103.4; current assessment, expected 106.9, January 107.9; business expectations, expected 99.0, January 99.0.

Wednesday: import prices for January at 7:00 GMT; expected +0.3% m/m, +4.7% y/y, December -0.1% m/m, +3.7% y/y. Export prices for January at 7:00 GMT; January 0.0% m/m, +1.3% y/y. GfK consumer confidence for March at 7:00 GMT; expected 4.4, February 4.4.

Thursday: unemployment rate for February at 8:55 GMT; expected 8.0%, January 8.1%. Final CPI for January at 7:00 GMT; expected -0.3% m/m, +2.7% y/y, December +0.5% m/m, +2.8% y/y. Final HICP for January at 7:00 GMT; expected -0.3% m/m, +3.0% y/y, December +0.7% m/m, +3.1% y/y. Total retail sales for January (release time undetermined); December 0.4% m/m, -9.1% y/y. Preliminary CPI for February (release time undetermined); expected +0.4% m/m, +2.7% y/y. Preliminary HICP for February (release time undetermined); expected +0.4% m/m, +2.9% y/y.

United Kingdom

Monday: Hometrack House Price Survey for February at 00:01 GMT; January -0.3% m/m, +2.3% y/y. Nationwide House Prices for February at 7:00 GMT; January -0.1% m/m, +4.2% y/y.

Tuesday: CBI Distributive Trades Survey (reported volume of sales) for February at 11:00 GMT; January 4.

Wednesday: fourth quarter GDP 2nd release at 9:30 GMT; 1st release +0.6% q/q, +2.95 y/y.

Thursday: Land Registry House Prices for January at 11:00 GMT; December -0.4% m/m, +6.7% y/y.

Friday: GfK Consumer Confidence for February at 10:30 GMT; January -13.

Japan

Thursday: Retail Sales for January at 23:30 GMT (prior day); December +0.25 y/y.

Friday: National Core CPI for January at 23:30 GMT (prior day); December +0.8% y/y. Central Tokyo Core CPI for February at 23:30 GMT (prior day); December +0.4% y/y. Unemployment rate for January at 23.30 GMT (prior day); December 3.8%. Household Spending for January at 23:30 GMT (prior day); December +2.2%. Housing Starts for January at 23:30 GMT (prior day); December -19.2% y/y. Construction Orders for January at 23:30 GMT (prior day); December +4.7%.

FX Solutions

Firefox Crosses 500 Million Download Mark

Sometime last night, Firefox downloads crossed the 500 million threshold.

It's an arbitrary but interesting milestone for the open-source Web browser, whose development is overseen by Mozilla but that's also developed and extended by a large number of outside programmers. In September 2007, Firefox crossed the 400 million download mark, indicating an average rate a bit shy of 20 million per month at present.

According to the Spread Firefox site, there had been 500,168,448 downloads as of 6:15 a.m. PST. About 12 hours earlier, there had been more than 499,900,000.

Firefox has spread widely in the years since its release. The project originally was named Phoenix to symbolize a rising from the ashes of the Netscape open-source browser project that began in 1998 but languished for many years as Microsoft's Internet Explorer solidified its lead.

Now Firefox programmers are working on version 3, which brings performance improvements and interface changes, and Mozilla also is working on a mobile version of the browser for handheld devices.

A sister subsidiary of Mozilla, Mozilla Messaging, is working to reproduce the successes of Firefox with the open-source Thunderbird e-mail software.

CNET News

10 Reasons Why I Recommend Google Grand Central

Have you heard of Google Grand Central? Are you using Grand Central? If not then you are cheating yourself. As of current Grand Central is by invite only, but you can easily sign up at the Grand Central website (http://www.grandcentral.com) and grab an invite from the Google team themselves. Google acquired Grand Central last year, July 2007. This in my opinion was a great acquisition. I learned about Grand Central while searching for an affordable voicemail messaging service, I then came across Grand Central which made me feel like I struck goal when I found out it was owned by Google, because the fact is Google normally do not associate any incurring fees with their services nor is it going to be a fly-by-night product, in fact it will be enhanced upon in the coming years, trust me!

Okay, so let's go inside Grand Central and my reasons for recommending it.

#1 - It's FREE. It is 100% FREE. Grand Central is currently in BETA mode and Google has not discussed the future plans of Grand Central, but it is highly unlikely that Google will ever begin charging for this service. They may begin charging for upgrade services, but I do not forsee Google forcing you to upgrade, instead they will continue to provide a free service for the life of the product.

#2 - It's Google. Google is not going to give you a product and taketh away. Google is a well established Internet property with a strong history of trust and good business. It's a name you can trust! Let's see I have a GMail account, iGoogle account, GoogleBase account, Google Docs account, Google Analytics account, Google Adwords account, Google Adsense account, Froogle account, Google Checkout account, Blogger account, YouTube account, Google Local account, etc. I am sure I am missing a few, but you get the point...why not have a Google Grand Central account!

#3 - One Phone Number for Life. Have you ever changed phone numbers and had to give your new phone number to everyone you knew. Somehow you always miss someone and you lose contact. Well, Grand Central gives you one phone number which you will have for life. Whether you change phones, switch jobs, or move all your phone calls can be routed through this one phone number that never changes. How awesome is that?

#4 - Use as Public Phone Number. You have one phone number to use for all your purposes. No more giving out your business card and months later its outdated because you changed your phone number, the number on the business card will always be active and alive. Use your Grand Central phone number for online contact forms.

#5 - Use for Personal Purposes. Give your Grand Central phone number to old and new friends, family members, co-workers, and acquaintances. They will never have to remember another phone number of yours. Give your Grand Central number to your day care provider, landlord, or use locally. Make sure people always have a way to get in contact with you.

#6 - Use for Business Purposes. Use your Grand Central phone number on business documents so you know the phone number is always correct and up to date. Use your Grand Central phone number on loan applications and credit applications. Use your Grand Central phone number on legal documents. Never again miss out on opportunity or important information because your contact information was out of date.

#7 - Electronic Receptionist. Are you self-employed, a small business, or in need of a catch-all voicemail system? Then Grand Central can be your solution. It can easily be used to send calls straight to voicemail acting as your business electronic receptionist.

#8 - Family & Friends Save Money. You can help your family and friends save money. If you have family or friends who are distant and incur long distant charges then you can setup a phone number local to their physical address, give them the phone number, and forward calls from that phone number to your home phone while making this call completely free for your distant hometown family and friends. Of course, this will only save money for those family and friends who have not jumped on the VoIP services, like Vonage.

#9 - Current Features. Ability to forward multiple phone numbers to one phone number. Voicemail messaging service. Contact management system. You have the ability to create groups which you can have ring different phones based on the group. You can also personalize your greeting based on call groups. You have the ability to screen callers and block callers. You can setup email configuration so you can receive voicemail message via email. Caller ID and missed call recording. Tell me those aren't some great features.

#10 - Future Features. Being that its Google I would hope to see improvements and developments on Grand Central. For one it would be cool to see Grand Central handle the receiving of faxes and send you a downloadable attachment of the sent document. I would also like to see Google create edit options for callers leaving a voicemail option, as of current I do not see anyway for the caller to replay message, erase message, or rerecord message, instead after leaving your message your call is simply disconnected. Another thing I would like to see is Google incorporate Google accounts so it support the single sign-on functionality. I'm sure there can be a whole slew of features which can be included in Google Grand Central but these are the features I'd like to see in the near future

Google Grand Central is currently in BETA mode which means you currently can only contain an account by invitation only. The only true advantage of getting an early account is being the first to grab your account name and being one of the bandwagon pioneers. If you are a person who frequently change for numbers, own a business, have distant loved ones, in need of a call forwarding solution, in need of a voicemail messaging service, or in need of a simple contact management system then I'd recommend using Grand Central for your needs, I think you'll be more than pleased.

Looking For A Homebased Business? 5 Things A Business Absolutely Must Have

Ok, so you may you hate your boss. Maybe you are on the road an hour or two trying to get to and from work, stuck behind a whole lot of people who don't have a clue how to drive? Is This You? Do you want more quality time with your kids? Need extra money to pay off those credit cards from Christmas and your vacation. Maybe like me you have your own business but want to make money from home. I made good money with my business but I wanted to be home with my 3 kids.

Many people are saying I want to come home, where do I start? I don't want to get scammed. What Do I look for in a home based business? I'll Share with you 5 important things for you to look for when searching for a home based business. I started off on my search for a home business as a single parent. To be honest at first I didn't do enough research and have invested in some scams.

Their promises and claims were just want I wanted to hear and later I discovered that they didn't deliver and I was left with less money.

I knew from owning my own business all my adult life that you don't get rich overnight. It takes work and persistence to make it happen. You need to be committed and NOT have the attitude of... oh I'll try it out for a few months and see how it goes. You are setting yourself up for failure with that attitude. You need to have the attitude that once you find a legitimate business you are going to stick with it and make it happen. Look at the successful people like Donald Trump and Tiger Woods. They didn't have it easy at first. They experienced a lot of failures but the difference with them is that they didn't give up and they believed they were going to make it happen.

I wandered aimlessly for 8 months not making a dime and investing a lot of money because I didn't know what I was doing. I am so glad I stuck with it because my determination has paid off.

5 Important factors to look for....

First: Check out the company. How long have they been around? Are the owners ethical and honest? There was a company I was considering that had a great product but I found out that the owner had all kinds of articles, reviews and comments all over the internet bashing other great direct sales companies. I definitely don't want to represent a company that doesn't hold high ethical standards. Do a search on the company and owners and research what you find on them. Listen to some of their training calls and overview calls. You will discover quickly what kind of people they are.

Second: Does the company have a quality product or service and how much demand is there for this service or product? Would you use it yourself and feel good about selling it?

Third: What kind of training do they have? This is crucial. Are most of their calls just testimonies and motivational calls or do they have concrete ways of teaching you how to build your business. I'm not saying testimonies and inspirational messages aren't important, they are but most people don't have a clue on how to market.

Does the company offer a website and can you modify it? Are you allowed to create you own. As a newbie it is important to have lots of resourses. As you gain experience you can create your own website that can be original and unique to you. What kind of resourses does the company have to train you to successfully market your business?

Fourth: What kind of support do they have? Will you have to submit a support ticket and wait 2 days to hear back or do they have live support daily? There's nothing more frustrating then running into a problem trying to set up your business and not having anyone to help you fix it.

Another thing to think about is just because someone has a financial interest in helping you doesn't mean you will get the support you will need. If you are going to be in an network marketing industry do the research on the person who would be your sponsor. What kind of support do they offer? What kind of leader are they? Will you be able to contact them when you need to?

Fifth: What is your compensation? I recently heard this one successful internet marketer talk about his experience when he started out in direct sales. He mentioned after many companies and much struggles he finally succeeded with one company in bringing in about 6000 people in a period of a few months. When he got his check it was for only a couple hundred dollars. What a disappointment! One women was sharing how she built an organization of 67,000 people world wide but the crazy part was she only made a little under 3 thousand a month. That sounds so familiar, I wonder if she was in the same nutritional company that I was in.

Some companies are set up for you to make them a lot of money. Crunch the numbers and figure out what you will have to do to make the money you want to make. Of course we know that this company was making a killing on 67,000. people. Make sure you fully understand the compensation before investing all your time and money in a company.

There are a lot of great sales pages out there that sound so good and promising but you can't base your decision on that. It looks to me like you are doing the right thing right now, researching. Success to you in your search for a home business.

Mortgage Calculators and Refinancing Your Mortgage

Many years ago when interest rates seemed to be declining almost every time you opened the newspaper, I attempted to determine the exact point I would benefit from refinancing my home mortgage. At first I search the internet for a mortgage calculator that could aid me in my decision, but to my disappointment I discovered that they all lacked the sophistication necessary to be of much use to me.

In fact they were so seriously lacking in their complexity that they were nearly financially ineffectual. So after frustratingly realizing I was not going to find what I needed, I decided to build my own mortgage calculators and in 2005 I transferred them to a browser format making them available to the general public. Determining the economic benefits of refinancing depends on many factors, i.e. 1) what is the rate on your existing loan, 2) what is the current rate at which you can refinance, 3) what will it cost you to refinance, 4) how long do you expect to hold the property hence hold the loan, and 5) what is the time value of money.

Understand that to create any financial calculator or model there is a trade off between complexity and simplicity versus effectual and ineffectual and that striking the right balance is the key to being a good analyst. "Mathematical modeling", "manipulation of numeric data" and "displaying numeric results" are all part of an art form! To think otherwise would produce less than superior results.

How do I do it? I combine 20 years of experience as an analyst on Wall Street with the following skill sets: coding in visual basic, yield curve construction, financial statement preparation, business plan development, complex derivative valuation, and risk management. I am a CPA in the state of New York.

Market Preview For The Week Ahead

Conditions within the US and global economies will remain crucial for the currency markets over the forthcoming week.

There are a string of US growth-related data releases, starting with the existing home sales data on Monday. This is followed by consumer confidence and house prices figures on Tuesday and new home sales on Wednesday. Jobless claims are due on Thursday with the Chicago PMI release on Friday. The indicators will be significant, but given the increase in markets fears over recession only a string of positive surprises would have a significant impact on expectations.

Markets will still be uneasy that inflation stresses could lessen the potential for further interest rate cuts. In this context, the US producer prices data on Tuesday and core PCE reading on Friday will also be a significant pointer on inflation trends and whether the Fed will be constrained.

Fed Chairman Bernanke will have the job of reassuring markets and policy-makers in his congressional testimony. Bernanke will deliver his semi-annual testimony to Congress on Wednesday and Thursday. There will also be important comments from Fed officials on Monday and Tuesday. Mishkin and Kohn are two very important members of the FOMC and their comments on Monday and Tuesday respectively will give very important clues on the Fed’s thinking ahead of Bernanke’s testimony. If the Fed wants to influence market expectations, then Miskin and Kohn will start to signal this in their comments.

A tough stance by the Fed would provide some dollar support, although the key impact would probably be a stronger yen against the Euro.

The balance of risk between the US and global economies will also continue to be a crucial markets influence. While fears are concentrated on the US, the dollar will remain vulnerable. If fears intensify more to the Euro-zone and Asia, then the dollar will be well protected.

Euro-zone data will, therefore, need to be watched closely with the German IFO release on Tuesday. The Euro will find it difficult to have as good a week as last week as European market fears are liable to increase.

Conditions within equity and credit markets will continue to be very important over the following week. Last week, there was continuing divergence with equity markets still firm while credit fears increase as the iTraxx crossover index widened to a record high. This divergence explained the lack of conviction over carry trades.

If equity and credit markets move back in tandem then there will be a much clearer trend for carry trades. If the credit markets strengthen then there will be gains for carry trades while renewed downward pressure on stock markets would undermine carry trades. The net risks suggest that uncertain conditions will persist with a lack of conviction still the dominant factor.

Investica

Making the Sale

Some would say selling is a complex psychological process. Others would say it is a battle of wills and opinions. Even others like Stephen Covey would say it must be a win win arrangement, where the customer wins and the seller wins. Regardless of your opinion or feelings about selling, this is the truth! If you are insensitive to the customer's words and behaviours, then the sale will not take place!

Often the salesperson is so impatient to make the sale they make a number of mistakes, then they are surprised when the sale does not happen. I have even heard some salespeople comment that they think they control the customer. They feel they can make the customer buy! What nonsense! Who are they kidding, besides themselves?

What I hope to do in this article is to help the reader understand the dynamics of the sale. For many unsuccessful salespeople find closing the sale a very difficult part of the sales process. The successful salespeople have figured out what I am about to share with the reader of this article.

First, let's consider the dynamics of the relationship between the seller and the customer. Each has different objectives. The seller obviously wants to make the sale. The customer wants to determine if there is value in purchasing the product. So each customer as an individual has different objectives or goals. These objectives can only be reached if the seller behaves correctly. This is where the salesperson has the real power. They have power and control to behave correctly and appropriately. If they do so, then everything is possible, like more sales and more referrals. Wouldn't you like to make more sales?

Next, let's consider the various parts of the buying process. When anybody buys anything, whether it is a car, clothes, TV or Life Insurance, that purchase is based on four reasons. Theses reasons are the only reasons why people buy anything. These reasons exist every time a purchase occurs. They are NEED, HELP, MONEY and URGENCY. Let's examine each of these reasons.

NEED

It is not the need of the salesperson to make the sale. It is the need of the customer for the product, or at least for the benefits derived from buying the product. Salespeople need to spend a fair bit of time with the customer, asking questions, taking notes and analyzing the customer's current and desired situation to ensure the salesperson understands the customer's needs. Customers must have an opportunity to verbally confirm that they believe they have a need. This customer verbalization of the need is often overlooked by the salesperson. I believe this is where the sale takes place. Unsuccessful salespeople incorrectly believe the sale takes place during the close. This belief is a big mistake! The salesperson's objective is to get the customer talking about their needs and then they will be building a foundation for the sale. If the salesperson spends enough time gathering correct information, the closing portion of the sale becomes very easy.

HELP

This is where the salesperson connects the product to the need. Again, unsuccessful salespeople talk too much about the product and too little about how the product will solve the needs of the customer. Customers care very little about the name of the product or how it technically works. They do care about the benefits they can derive from the purchase of the product. They are interested about how this product will help them solve their needs . To effectively talk about the product, the salesperson must first understand the customer's need. Next, they must be able to explain to the customer how the product helps solve their need. Often this is explained as features, applications and benefits. What are the features or special additions to the product, how does this apply to the customer's situation and how does it benefit the customer, now or in the future? The salesperson must explain this very well in the customer's terms, not the company's terms. Be very careful not to use industry terms unless you fully explain them.

MONEY

Unsuccessful salespeople make another mistake. They talk too much about how much the product will cost the customer, and too little about the value the customer will receive from purchasing the product. Sometimes the customer does not have enough money to purchase the product. Most times they have the money but see no real or inherent value in the product, so they do not purchase it. At this stage of the sales process the salesperson must clearly explain the benefits the customer will receive by purchasing the product. If a customer has difficulty with the monthly premium, then explain it differently. For some customers it is easier to understand the premium to be paid in terms of a daily cost. This is not effective for all customers, but some benefit from this explanation. If the salesperson explains a small premium on a daily basis rather than a larger one on a monthly or annual basis, it makes the buying decision a little easier for that kind of customer. Others want to know about the value received from the purchase. Value for premium paid may be expressed in terms like; the customer being responsible, taking care of their family, solving a need they have uncovered, or planning and preparing for the future. The salesperson must help the customers understand the value they will receive if they purchase the product.

URGENCY

The final and probably one of the most often over looked reasons why people don't buy is that the salesperson does not assist the customer to embrace a sense of urgency. A sense of urgency drives the customer to take action today, not next week, next year or never take action. This is when the salesperson talks about the concept of risk and reward. The salesperson explains the risk in terms of what happens if the customer does not take action. What risks do the customers or their families face if the customers do not buy the product recommended today. As well, the salesperson must explain the reward for the customer and their family if they take action and purchase the product today. The salesperson must paint a picture as clearly as possible to ensure the customer fully understands the risk and reward. They must help the customer understand the risk and reward in terms of today!

So what else can salespeople do to improve their chances of making the sale?

First, the salesperson must memorize, practice and master a series of questions that get the customer talking and help the salesperson understand what is important to the customer. I am appalled with the lack of professionalism exhibited by most salespeople. Most do not know what to say and when to say it. They act like amateurs when it comes to practicing their profession. Successful salespeople learn the sales processes and scripts. They memorize the words, practice and role-play, and master all the steps of the sales process so they are always in control of the process. Many salespeople feel that they do not need to be professional. Therefore they get the abysmal results that they get. If they would treat this profession seriously, they would achieve much better results.

Second and foremost, they need to learn to listen to the customer and equally important, learn to shut up! I am amazed at how much the unsuccessful salesperson talks. I am not surprised that the salesperson must see so many people to make one sale. They make it very difficult for customers to buy. When salespeople talk too much, they are telling the customer that they are far more important than the customer. It seems salespeople like to hear their own voices more than the voice of the customer. Successful salespeople love to hear their customers talk. If the salesperson would learn to ask good questions and really listen to the customer, the salesperson would truly understand what drives the customer and be able to find the reasons why the customer might be willing to buy.

Third, salespeople must take good notes. Indeed, they must write down word-for-word whatever the customer says. The customer's words are far more important than the salespeople words. When salespeople reach the point in the sales process when they ask the customer to buy, and the customer responds with a no, salespeople must then go back over the four reasons why people buy (need, help, money and urgency) and determine which of these areas the customers are having difficulty with. Maybe the customers feel they don't need insurance, or your recommendation does not solve their need, or for the premium they must pay they will not get value, or finally, they have no sense of urgency. Any one of these four reasons may cause the customer to say no!

When they say no and you have uncovered the reason they have said no, this is when you repeat back to them the words, as you have written, that they have used earlier in the sales process. You would say phrases like;

- Didn't you say you had no insurance, did you say that? - Didn't you say that you felt what I was recommending would likely solve your need, didn't you say that? - Didn't you say that you could afford (?) so much premium per day, week, month, didn't you say that? - Didn't you say that you felt your family would be at risk if you did not take action, didn't you say that?

Then you say to them, help me understand! You said you have a need, you said you felt my recommended product would solve your need, you said you felt you could afford so much a month, and you said your family would be at risk if you did not take action. Did you say all this? Great, then I only have one question; what is preventing you from taking action today? Now shut up and listen.

If you ask these questions one by one, then shut up after each question and listen, you will make more sales. I promise you will!

So what have we learned from this article. We have learned the value of changing our behaviours. Master this profession, ask better questions, listen more actively, take good notes and feed back the customer's words to them. We now know the four reasons why people buy; need, help, money and urgency! As a salesperson you must ask enough questions to uncover these four reasons and what the customer thinks about these four reasons. With this information you can make more sales. If salespeople change their behaviours, they will improve the chances of changing their results. Remember making the sale is less about closing the sale and more about asking good questions and listening. With these new skills you can become more successful. I wish you good luck!

Panama Is the Offshore Banking Capital

An offshore bank account will allow you to securely and personally explore, with few restrictions, the distant reaches of the immense and diverse financial universe; from the bond markets of Korea to the stock transactions of Eastern Europe; from privatised Liechtenstein trust arrangements to the most financially good funds; from specialised commodity investments to Caribbean corporations; from Israeli nanotech start-ups to ancient European blue-chips; from the strange and secretive world of offshore mutual funds to tax-free Swiss gold accounts; from Isle of Man Insurance contracts to Danish multi-currency investment accounts; from one of a kind structured tax-free Austrian funds to Bulgarian mortgages; along with much more beyond. Diversify your funds out of American dollars along with convert them into currencies set to soar against the dollar in the volatile times ahead, like the rock-solid Swiss franc, the euro along with many more commodity currencies upon which we’ve already seen staggering gains of 1,794% along with 797% via recommending opt for little known currency investment techniques.

Dozens offshore financial institutions may operate with a reduced cost base along with can supply higher rates of interest than the legitimate rate in the domestic country due to reduce overheads and a lack of government intervention. People In Agreement of overseas banking often characterise government control as justified charge on domestic banks, reducing interest rates on addition to. Look At balances along with statements for your accounts along with HSBC Financial Institution PLC credit cards online, make free bill payments (to UK beneficiaries) along with enjoy reduced rates on international money transfers. In the wake of the savings rate war, first in the fixed rate market along with subsequently with variable rate products, the offshore savings market has stolen the mar in the last week, giving market leading offshore savings rates. Since we are in Panama we can along with will defend any of the clients who require legal representation in Panama with affordable rates, $150. Wealth Intermediaries along with Corporates for businesses along with intermediaries seeking to feature from overseas banking.

Wealth Management seminars hear experts explain the advantages and issues of living along with working abroad, along with how you could maximize your situation. The development in international travel, coupled with the mounting use of the web to make a living or assist manage businesses from afar, has led to growing use of overseas banking and offshore trusts. These overseas banking and investing strategies are alternatively known as internationalising your personal and industry life, along with can involve living along with doing industry and banking in different countries, including using the internet to earn income in different jurisdictions.

Offshore Banking Advice {Business along with Banking} "Advice along with resources on overseas banking, offshore trusts, funds privacy along with asset security. Offshore Banking has increased quickly all over the world since the mid-1960s because of the development and made liquid of world financial arenas.

Work At Home

The Longevity Express is here. People are starting to live longer faster than ever before. Isn’t it wonderful? The average age is now around eighty and climbing quicker than the actuarial tables have estimated. People in their fifties and sixties now consider themselves part of the new middle aged. More and more of them are starting to work from home.

Where will it all end? No one knows, but certain scientists are estimating average life spans of well over one hundred in the not to distant future. At this rate people in their seventies may soon consider themselves middle aged.

What are we doing to prepare for this Longevity Express? We better do some planning before we end up with a train wreck.

Planning For The future:

1. What will the health and life insurance people do when faced with masses of people in their nineties plus looking for coverage? 2. What will happen to Social Security and Medicare? 3. Will the demand for new life prolonging drugs continue unabated? 4. Will people have to modify their wills and trusts to account for grandchildren and great grandchildren? 5. Will body part cloning become a reality? 6. How will corporations deal with an aging work force? 7. What are the social ramifications of Longevity re marriage, sex, and divorce? 8. Will children have to provide more care to parents? 9. Will there be enough assisted living facilities? 10. Will people living to one hundred plus have the mental and physical capacity to lead worthwhile, primarily pain free, productive lives?

Enough attention is not being paid to the side effects of the Longevity Express. It will have major effects on our economy and in fact on our philosophy of life.

Perhaps the most important effect of people living longer is a need to provide them with ways to continue to be productive members of our economy. This opens the door to more and more people seeking their own work at home business opportunities that are compatible will their well-earned desire for more leisure time.

Our aging population will need to rely on their experience, life knowledge, and an appreciation of the technological opportunities available to them to create an online business on the Internet.

They needn’t fear not being computer savvy because there are programs out there that will get them started with their own free Web site, which they can individualize the content of to create their own brand.

These work at home online opportunities will enable older people to once more become productive elements in our society and give them a sense of independence. It will give them a forum to express their views and share their knowledge with others. It will help shape the new social order that is speeding to us on the Longevity Express.

Advantages And Disadvantages Of Working From Home

Advantages and Disadvantages of Working From Home

With the great technology of the Web, many people are choosing to work from home. Not only are some offices allowing their employees to telecommute, but people are also starting their own home business with a website or affiliate programs. There are so many opportunities out there! Of course, as with anything else, there are both advantages and disadvantages of working from home. There are also many ways to make money online. You can sell e-books, articles, or anything else with the help of the Web.

Advantages There are many different advantages of working from home. Learning how to make money from home is one of the best things you can do. It allows you the ability and freedom of working for yourself, in a way. When you work from home you can basically choose your own schedule. You can even wear your pajamas to the “office” and help the kids with their homework, or even make them breakfast. Working from home lets you feel more in control of your life, and allows you to really enjoy life more than ever before.

Disadvantages

There are also a few disadvantages of working from home that you may or may not take seriously. One of the main disadvantages is not being able to get company benefits. If you have a family, health insurance, retirement, and other benefits might be important to you. However, working for yourself might mean that you have to find a way to get these benefits yourself, which can be quite costly overall. But, don’t despair; there are ways to find benefits that are both affordable and beneficial.

So, when it comes down to working from home, you really just have to decide if you think the advantages outweigh the disadvantages. Most people agree that the freedom that comes with working from home is well worth any of the disadvantages and feel that those who work from home are truly living the American Dream.

Consider them before start your business!

Market Directions

- USD weakens, but still within a range
- Commodities outpace all other markets
- JPY repatriation has begun
- More US housing and other key data next week

USD weakens, but still within a range

The dollar gave up further ground against other major currencies as fresh signs of economic slowing materialized, but the overall ranges continue to hold. US data mostly came in on the weak side, while data elsewhere generally surprised to the upside. US Jan. core CPI was a touch higher at 0.3% MoM and 2.5%YoY, highlighting the ongoing threats from inflation. Jan. housing starts were slightly improved, but building permits, the leader in the cycle, fell further to 1048K from 1080K, suggesting there is no end to the downturn in new home building and the larger housing market. Jan. leading indicators declined -0.1%, while Philadelphia-area manufacturing sentiment fell even further to -24.0 from -20.9; forecasts had been for an improvement to -10.0. Minutes from the Jan. 29-30 FOMC meeting revealed a Fed highly concerned about the extent of the US downturn and clearly focused on stabilizing the US economy through lower rates. Markets remain convinced the Fed will cut rates a further 50 bps at its next meeting on March 18, with the weaker Philadelphia Fed Index inspiring some to expect 75 bps of easing.

Data out of the Eurozone showed a sharp increase in monthly inflation data, with German producer prices rising 0.8% MoM and 3.3% YoY. High current inflation readings essentially leave the ECB with no choice but to keep rates steady, despite expectations for slowing growth ahead. (The IMF on Friday cut its forecast for German 2008 growth to 1.5%, below the German government's and EU's forecasts of 1.7-1.8%.) Eurozone advance Feb. purchasing managers' indexes (PMI's) also came out a bit better than forecast. The service sector PMI rose solidly to 52.7 from 50.6, and the manufacturing index declined in line with expectations to 52.3 from 52.8. Together, the Eurozone composite PMI rose to 52.7 from 51.8 in contrast to forecasts for a dip to 51.5. UK Jan. retail sales surprised to the upside as well, gaining 0.8% MoM versus expectations of only a 0.3% monthly increase. Still, the BOE MPC minutes left the market expecting additional rate cuts later this year.

The net result of this past week's data in currencies was for the USD to weaken against most other major currencies. The other key development was that JPY-crosses (e.g. EUR/JPY, AUD/JPY, etc.) stalled in their advance and are showing signs of staging a reversal lower. This coincides with renewed stock market weakness and an increase in risk aversion. Over the prior two weeks, risk appetites improved slightly on the back of better stock market performance and lower overall volatility. Weaker US data, however, have undermined still fragile market sentiment leading to renewed declines in US stocks. I continue to view rebounds in risk appetite as unsustainable and still favor using associated strength in the JPY-crosses as a selling opportunity.

Commodities outpace all other markets

Commodities stole the spotlight this week as oil prices pierced the magical $100/bbl level and gold surmounted the $950/oz. level. But the gains appear in doubt as neither of those psychological price levels were sustained for any meaningful length of time, and may very well have been rejected. The commodity frenzy is just that, a highly speculative push higher in relatively vulnerable markets. With US growth slowing and global growth likely to weaken as a result, commodity prices are in danger of a sharp setback. Certainly the psychological and positioning factors are in place for a sharp reversal. Market commentators had been obsessed with oil breaching $100/bbl and are frothing over the prospects of $1000/oz gold. I would also note some candlestick patterns that call the current advance into question: a double Doji pattern is evident on gold daily candlestick charts for Thursday and Friday, suggesting indecision in the current advance, with a likely volatile resolution in coming sessions. A ‘hanging man' pattern is evident on oil candlestick charts, also an indicator of a potential price reversal after a move higher. The CRB commodity index is also just below psychological resistance at the $400 level, having made a high today at $399.22.

For currency traders, it's important to keep an eye on those commodities as they have been highly correlated to EUR/USD, in particular: higher oil and gold prices are supportive of strength in EUR/USD; weakness in those commodities translates to weakness in EUR/USD. If EUR/USD fails up here toward the upper end of its recent range again, it also augurs poorly for those commodities.

JPY repatriation has begun

The end of March is the close of the Japanese financial year and the weeks leading up to it typically sees significant amounts of JPY-repatriation, which usually translates into sustained JPY-buying. Japanese asset managers typically liquidate large amounts of existing positions and turn the proceeds into JPY for balance sheet window-dressing and year-end results. The recent failure of USD/JPY in the mid-108 area suggests just such a development at work this past week. I continue to look for strength in the JPY-crosses to be limited by such repatriation selling interest, with the bulk of JPY-buying likely to be completed before the third week of March.

More US housing and other key data next week

Next week sees a heavy data calendar out of the US along with a slew of Fed speakers, including Fed Chairman Bernanke on Wednesday. Monday sees January existing home sales, which are forecast to decline another-1.8%. Tuesday sees January PPI, Dec. and 4Q S&P Case/Shiller home price index, Feb. consumer confidence, Richmond Fed manufacturing index and the 4Q OFHEO house price index. Wednesday sees Jan. durable goods orders and new home sales. Thursday sees the first revision to 4Q GDP, which is expected to be revised slightly higher on the back of higher exports, and weekly jobless claims. Friday concludes with Jan. personal income and spending, Jan. PCE core inflation, Feb. Chicago PMI and the final Feb. Univ. of Michigan consumer sentiment index. Fed speakers on Monday include Governors Kroszner on risk management and Mishkin on inflation. Vice Chair Kohn speaks on the economic outlook on Tuesday. Fed Chair Bernanke testifies before the House on Wednesday and before the Senate on Thursday. On Friday, Treasury Sec. Paulson speaks on the economy.

In the Eurozone, the data begins in earnest with German 4Q GDP and related reports along with Feb. IFO corporate sentiment gauge. Tuesday sees German Jan. import prices and the German March GfK consumer sentiment survey. Thursday sees French Feb. consumer confidence and German Feb. unemployment reports. Friday sees preliminary German Feb. CPI, Jan. Eurozone CPI, various Eurozone Feb. confidence gauges, and German Jan. retail sales. There are also a number of ECB speakers scheduled, including Trichet on Monday and Bundesbank Pres. Weber on Tuesday-expect both to be hawkish.

Japanese data begins on Tuesday morning with the Jan. corporate service price index for Jan. followed by Feb. small business confidence in the afternoon. On Thursday morning, preliminary Jan. industrial production and Jan. retail trade are due. Friday morning sees Jan. employment data, Jan. household spending, Feb. Tokyo-area CPI and Jan. national CPI reports, followed by Jan. housing starts and construction orders in the afternoon.

UK data on Tuesday sees preliminary 4Q total business investment and the Feb. CBI distributive trades report. Wednesday sees 4Q preliminary GDP and associated reports along with 4Q import/export totals. Friday sees Feb. Nationwide Building Society house prices, Jan. consumer credit and Feb. GfK consumer confidence survey. Bank of England Dep. Gov. Rachel Lomax is to speak on Tuesday morning and Dep. Gov. Gieve on Wednesday afternoon.

In Canada, keep an eye out for Bank of Canada Dep. Gov. Jenkins on Tuesday morning; he is set to testify to the House of Commons on currency matters.

Joseph Trevisani
Chief Market Analyst
FX Solutions

US Market Week Wrap Up

Markets were jittery again this week, as more negative economic data and rumors kept the tone downbeat. Credit markets continued to show distress as bad news surfaced around the globe. A report in the Financial Times on Wednesday indicated that KKR Financial has delayed payment of billions of dollars of commercial paper for the second time, while in the UK Alliance Leicester declined after it said its previous EPS guidance was no longer appropriate and added it sees lower new customer lending volumes in 2008. France's Credit Agricole dipped on reports the bank was likely to announce further write downs.

The CPI data came in a tenth of a percent above expectation on the headline and core numbers, and the Philly Fed index came in at a very disappointing -24 (vs. -10e) midweek, which reinforced the cautious tone for equities. Indices hit weekly highs on Thursday morning and then commenced a pronounced downward trend on further credit market fears. One bright spot was Wal-Mart's earnings on Tuesday; the company reported solid results, helping the retail sector minimize losses for the week.

In the bond market, 2-year notes had their first weekly drop this year, after nine straight weeks of gains, and the difference between the 2-year and 10-year notes' rate narrowed for the first time in two months. Despite market jitters, expectations for a larger Fed rate cut declined during the week; by the end of the week Fed funds futures no longer showed any expectation of a 75 basis point cut.

In commodities crude oil popped above $100 again early in the week, but prices eased off after legendary oil trader Boone Pickens stated he is currently short the oil market. US indices were higher on Tuesday's open, driven by gains in commodity stocks. Over the weekend Brazil's Vale had confirmed agreements to raise ore prices 65% for shipments to Japanese and Korean steelmakers. The news has spurred a rally for a wide range of mining and metals stocks. Futures prices continue to surge across all the metals led by another new all-time high in platinum and multi-month highs for front month copper. Spot gold was up about 4% on the week, closing at $945.53, and the April gold futures contract rose as high as $958.40.

The rumor mill was in full swing as chatter about more writedowns at major banks and brokers circulated, though none actually came to light. The impending ratings action from Moody's on the monoline insurers also added to negative sentiment (Moody's has said it will make an announcement by the end of the month), but equity markets came roaring back late in the session on Friday after a CNBC report suggested a bail out for troubled bond insurer Ambac is likely to be announced early next week. For the week, the DJIA rose 0.25%, the S&P500 rose 0.22%, and Nasdaq was down 0.8%

Trade The News Staff
Trade The News, Inc.

Is Home Business Really a Business?

Is Home Business really a Business? Home business, doesn’t it strikes you? But then another question hammers in your mind, whether it is a credible & lucrative business just like others? This is a never ending argument between Successful and Botched people who tried this business. Do you know that only 2 % people are successful in home business and 98% are failures. Can you think of who are those 2 percenters. successors?Why majority people are botched? Let me discuss some core issues about home business.

What is the Home Business?

A business you can operate from your home in flexible hrs. You will be your own boss. There is only a small investment and above all you can work with World’s Top marketing companies. You can earn decent money for your efforts and knowledge.

Who is the right person to do it?

In my opinion everybody can do this business, who have a strong urge to do something with certain level of commitment and dedication. But one can generate a handsome income only after having accumulated a reasonable knowledge about marketing techniques, knowledge of your target audience/market and certainly latest promotional tools, because INTERNET is the fastest way to market your products and services. A good knowledge of email marketing, websites and search engines will be additives to your income & success. You must be innovative and creative while marketing your products and services. There are no set rules, every successful marketers have developed their own strategies. You will also learn when you decide not to quit but to persist your enthu to succeed.

Is it worth to invest money in home business?

YES! I say yes, if you are really serious about this business you have to invest some money wisely just like any other business. For eg. if you are planning to open a shop, you need space at a high traffic area, you need some hot selling products, you have to do some interior to make it attractive and last but not least you have to advertise your business to get customers. All the above requires wealth/capital to invest. Right! Same basic rule also applies in home business.

Why 98% peoples fails?

This is a naked and callous truth about home business that 98 % people are failures. The foremost reason is lack of knowledge, patience and earnestness. Most of the people joins Network marketing companies to earn quick money without doing anything. They endeavor it for few months and then give up. They never attempt to learn the right techniques and strategies, they only want some quick bucks. They don’t be bothered for their customers or downline. They are reluctant to solve the problems of their customers and downline, which results in dissatisfaction and frustration and then finally surrender. This ends the business in itself because ‘U’ ultimately will end up with no earning and get only a ruined business.

Who are the Successful 2 percenters?

These 2 per centers are the people who never quit and have faith in themselves. They learn from their mistakes and imbibe a lot more from apex of these businesses. They motivate themselves endlessly and help others in their downline to achieve the same. They are taking towering risk as they know that nothing comes without efforts. They strive to imitate and generate new ideas from their upline and other successful Marketers. They always welcome new ideas, believes in acceptance, always ready to take risk, and have a ‘NEVER SAY DIE’ Attitude. Believes strongly in “If someone can earn, then why can’t I?”

Why more and more people are going for it?

According to my study and observation, a lot more individuals are looking for home business opportunities and the only one main reason is ‘TIME’. Today maximum no. of populace is fed up of their working schedules, jobs and lifestyle. There is no time for the family, oneself and/or society. A hate feeling has developed for routine 9 to 6 hrs job as the maximum times goes in commutation (3-4 hrs. daily) from home to office and then office to home. After a long drenching day reached home fully exhausted and frustrated. So the Idea of home business always fascinates them. They would have always dreamt about it. That’s why every 45 second someone has joined the home business worldwide. It is an alarming figure and more and more people opt home business as substitute earning source. You know 90% of the working mothers don’t have more then 2 hrs daily for their kids. This is very provoking for both mothers and kids, their family bonding is at a risk. The only solution for this problem is owning home business where one can not only earn well but also have a suffice time for family and oneself.

In my opinion everybody has a right to live freely and must devote enough time with their family. So joining a home business is really good decision but mind you, you have to work smartly and not hard. Now a days a lot of successful marketers are ready to share their secrets with you and you get all valuable information for just a few bucks. If you are really thinking about to start a home business consider some points before you join:

1) Check the company’s reputation, their promoters their products and existence of company and Track record.

2) Check if the company paying their affiliates timely.

3) Is the products are really good quality.

4) Is your upline supportive.

Once you verify the above points, go and join it and start working as this is your own business. If you are determined and ready to learn, you will definitely win.

Best of luck for your successful home business.

EURUSD Approaches A Record And Range High

Trading Tip - EURUSD is a closely watched pair; and as it approaches its record high's, the market's focus will only intensify. However, despite this attention, the pair has also carved a notable range. A wedge (ascending triangle) has defined price action for the long trending pair since October. Essentially, the 1.4900/50 area is defined by a triple top whose first test also happens to be the record high for EURUSD. Nonetheless, there is considerable risk in taking this range trade considering the major swing lows over the past four months have steadily risen; and the proximity of record highs could encourage a run to flush stop. Our strategy has a stop set above the record high, but an attempt to break this high could easily force a stop. Considering the risk and our wide stop, we recommend trading this at half size. To further reduce risk inherent to the economic docket, we will cancel any open orders by the US close on Tuesday or if spot hits 1.4725 before we are entered.

Event Risk Euro Zone and US

Euro Zone - There are a number of Euro Zone indicators that may pressure fundamental trends, but they will likely struggle in moving the euro. Consumer inflation, retail sales activity, and unemployment for the region typically do not encourage much action from the currency, but an outsized surprise could certainly build momentum. Instead, the real potential for volatility and breakouts will come from German docket. Monday and Tuesday will report on business and consumer confidence respectively; and a big shift here could charge growth forecasts. On the following day, the employment change indicator has grown every more dependent on further improvement. One negative reading could trigger a wave of fear. Finally, retail sales will measure the health of spending - a key GDP component.

US - The US economic docket will awaken from its fundamental coma this past week. Though most of the scheduled economic releases scheduled for the coming week are not guaranteed market movers, most have had a significant impact on price action one time or another in the recent past. Monday will begin a trend of housing releases that follows into Wednesday and includes: existing home sales, the S&P index, fourth quarter house prices and new home sales. This lot will be used to gauge Bernanke's outlook for the sector and for general economic growth. Also in the mix is the Conference Board consumer confidence report, the durable goods number, and personal spending. Monday March 3 brings the first major market mover: the ISM factory report. It will also be important to watch the heavy volume of potentially market moving Fed speak smattered throughout the week.

Data for February 25 - March 3		Data for February 25 - March 3
Date	Euro Zone Economic Data	Date	US Economic Data
Feb 26	German IFO - Business Climate (FEB)	Feb 25	Existing Home Sales (JAN)
Feb 27	GfK Consumer Confidence (MAR)	Feb 26	Consumer Confidence (FEB)
Feb 28	German Employment Change (FEB)	Feb 26	House Price Index (4Q)
Feb 29	German Retail Sales (JAN)	Feb 27	Durable Goods (JAN)
Feb 29	Euro Zone CPI (JAN)	Feb 28	Gross Domestic Prices (4Q P)
Feb 29	Euro Zone Unemployment Rate (JAN)	Mar 3	ISM Manufacturing (FEB)

DailyFX

What to Expect for the US Dollar

- New Zealand Dollar Nears 22 Year High, Australian Dollar Trails Behind
- Euro: Still Headed for All Time Highs

What to Expect for the US Dollar

The dollar has weakened this past week, but the question on everyone's mind is how bad is the US economy really doing? Hopefully next week's heavy data calendar and testimony by Federal Reserve Chairman Ben Bernanke will shed more light on the state of the US economy and monetary policy. With the exception of producer prices, we expect more dollar bearish news and would actually be surprised if Bernanke had anything positive to say about the US economy. The Federal Reserve has cut interest rates by 225bp since August and it will be interesting to see if this has helped existing or new home sales in the month of January. According to the NAHB housing market index, bottom fishers are slowly beginning to sniff out the inventory, but just because they are sniffing do not mean that they are buying. Durable goods, fourth quarter GDP, personal income, personal spending and the Chicago PMI reports are also expected to be released, which means that a volatile week is in store for the currency market. There is a good chance that another round of weak US economic data could drive the US dollar to a record low against the Euro. We continue to believe that the next 2 months of retail sales and non-farm payrolls data will be particularly weak because the last time that we have seen service sector ISM fall to the levels that it did back in January was in 2001 and at that time, non-farm payrolls dropped 300k. In some ways, the latest crisis to the US economy is worse than 2001 which means that the 17k job loss that was reported by the Labor Department in January could pale in comparison to the losses that we could see in February and March. The same can be said for retail sales. Food prices have been on a tear, forcing many consumers to count their pennies at the supermarket. Milk prices alone have increased 15 percent since the beginning of last year. However amidst all of the bad news, there is some good. Many traders are expecting a V shaped recovery in the US economy in the second half of the year. According to the profit forecasts for the S&P 500, a 19 percent increase in earnings is expected in Q3. Traders have also piled into steepener trades in the bond markets which mean that they expect yields to rise again a few months forward. This plays into our view that the US dollar will recover in the second half of the year.

New Zealand Dollar Nears 22 Year High, Australian Dollar Trails Behind, Canadian Dollar Behind the Curve

Despite the lack of any economic data, the New Zealand dollar rallied over 1 percent against the US dollar, leaving it within a few pips of its 22 year high. With 8.25 percent interest rates, many people argued that it was just a matter of time before we saw a strong breakout in the New Zealand dollar. The power of today's move suggests that a new multi-decade high will be made in the currency early next week even though the only piece of market moving data from New Zealand is not due for release until Thursday. The Australian dollar continued to gain strength, but the rally could lose steam as the calendar next week is completely devoid of any Australian economic data. The Canadian dollar on the other hand weakened marginally against the US dollar after a disappointing retail sales report. Like New Zealand, there are no Canadian releases until the end of next week.

Euro: Still Headed for All Time Highs

The EUR/USD is aiming for its record high and today's Eurozone economic data is certainly helping to fuel the rally. Despite the slowdown in the global economy, the advance release of Eurozone PMI indicates that the economy is still holding strong, which may lend a bullish tone to next week's economic data. Traders will be looking to the German IFO report, retail sales, unemployment and the Euro-zone retail PMI and CPI figures for further clues to when the bank will begin to cut interest rates. Comments from ECB member Gonzalez Paramo today suggests that any rate cut from the ECB will not come until the second half of the year. Like some of the other members of the central bank, Gonzalez Paramo believes that “all in all the fundamentals of the euro zone economy remain sound.” The futures market is still pricing in 50 to 75bp of easing by the ECB in 2008, but the price action in the Euro has yet to reflect that sentiment.

British Pound: Can the Gains be Sustained?

After yesterday's strong retail sales number and blockbuster recovery in the British pound, the currency continued to see a broad based recovery. The outlook for the British pound has become extremely uncertain with a hawkish Quarterly Inflation report, strong retail sales and an upside surprise in employment conflicting with the dovish minutes from the most recent Bank of England meeting. That is why next week's UK GDP, housing numbers and GfK consumer confidence will be very important because they provide more information on the recent health of the UK economy.

Carry Trade Recovery Limited by Continued Volatility in Equities

News that a bank bailout plan for bond insurer AMBAC will be announced Monday or Tuesday triggered a 200 point reversal in the Dow. Unsurprisingly, the move had only a limited impact on carry trades. Although the correlation between carry and equities continues to fade, the one thing that remains unchanged is the fact that the volatility in the equity market is a big reason why carry trades have been unable to muster a sustainable rally. This relationship should be the main focus of Yen traders. Meanwhile there will be a lot of Japanese economic data due for release in the week ahead including retail trade, industrial production CPI and overall household spending. These reports should only have a limited impact on the Japanese Yen.

DailyFX

Secrets Of Successful Home Based Internet Businesses

Your work at home based Internet business relies heavily on your Web marketing to bring in new customers. To make this tactic work you must know how to write great sales copy for your site. Here are some ideas on just how to do that.

The first tip for keeping consumers on your site and inducing them to buy your product or service is to create headlines that get their attention. Of course, it has to be followed by material that keeps their attention, but we’ll get to that later.

Don’t be weak, but don’t be hyperbolic. If you’re weak you’re boring and not very convincing. If you use hyperbole you won’t be believed or trusted – the kiss of death for a work at home based Internet business. What we mean by weak is, “Welcome to my site. I think you’re going to like what you see here.” Well, if you’re not sure, they sure won’t be. Hyperbole is, “You’ll be glad you found the only site you’ll ever need again.” Yeah, right. Bye.

There are two things you must focus on when you create your site headlines. People want help and information, and they want it fast. Get right to the point. If you’re offering legal services for DUI citations you might start off by saying, “We can help You Save Your Job, Your License, Your Freedom and Your Reputation.” See how that works? You haven’t promised you will, because of course you can’t. But you’ve gotten right to the heart of why they are seeking you out, told them emphatically that you can help them, and did it in a dramatic and attention-getting way.

A work at home based Internet business must know its target audience and hone in on that segment of Web users. You can’t be everything to everyone, nor can your copy convincingly claim that. You must know what you are going to offer and to whom you are going to offer it and then focus your sales copy and your advertising campaign to bring those folks to your site. The best way to learn about who your audience is may have to be to get a small audience to your site and then see who they are and where they go. Your Web host can provide the details of the server logs from which you will learn which pages are the most popular, not only because they are visited most often but because users stay on them the longest. They can also tell you the days and times of day most people come to your site as well as the point at which (the page) they leave your site.

From this you’ll know your age, gender, and other demographics of your niche (if you’ve been smart and required or encouraged free registration) and what pages need rewrite and redesign to keep folks from leaving at that point.

The other important sales tactics for your work at home based Internet business are to establish business credibility with clear contact information, clear biographies of all key players in the business, and business testimonials. You want to focus not only on the features of your products and services but their benefits as well. Tell your potential customers what you can do for them. Don’t forget, as many do, to ask for that sale – over and over again.

U.S. Market Update

- Dow -51 S&P -6.5 NASDAQ -16.8

Indices resume a downward trajectory as credit market fears continue to weigh. Major publications continue to point to signs of further deterioration in the functioning a variety of fixed income markets. The WSJ noted that two indices that track the cost of buying insurance on bonds issued by 125 large companies have doubled since the beginning of the year, a sign that the financial squeeze that began in investments linked to subprime mortgages has spread. A separate article noted that the CMBX Index, which tracks the value of bonds backed by commercial mortgages, suggest rough waters ahead for that industry as well. Sandford Bernstein cut Q1 numbers in several of the brokers ahead of the open keeping the pressure on financials. XLF -1% FNM -4.5% and FRE -7.5% are under pressure after being cut to sell at Merrill Lynch. Gasoline futures are the weakest among energy trading off 1.5% while natural gas is higher by 5 cents at $8.94. DNA opened higher but has come back towards unchanged ahead of an expect ruling regarding Avastin due out later this afternoon. One area of relative strength is consumer staples. CLX is higher by 2.25% after reaffirming 2008 guidance while shares of CL KMB UL and PG are all seeing gains. Treasury futures have been firmer with the weakness in equity markets. The 10-year is higher by a quarter of a point yielding 3.73%. The Greenback is modestly lower again with no U.S. data to trade off of. USD/JPY remains close lows at 106.86. Cable briefly tested a purported options barrier at the 1.97 level but has since backed off some 50 pips. The Loonie came under a bit of pressure following weaker than expected January retail sales figures.

Trade The News Staff
Trade The News, Inc.

Foreign Exchange Market Daily Update

The US dollar weakened against a basket of currencies after US data yesterday showed the weakest regional factory activity since the last recession. The Philadelphia Fed's business index fell to minus 24 which was much worse than the forecasted minus 11, and reflected the deepest contraction in activity since 2001. This report boosted expectations for aggressive rate cuts of at least 50 basis points, and a small chance of a 75 basis point cut to help alleviate the US falling into recession.

The Euro strengthened against the dollar after stronger than expected euro-zone service sector growth and disappointing US Philly Fed factory activity data. The euro-zone services PMI index rose to 52.3 in February from 50.6 in January. This rise pushed it past the 50 watermark level which distinguishes between contraction and growth and dampened views of near-future rate cuts by the ECB.

The British pound rode on the stronger than expected UK retail data from the previous session and maintained its gain against the dollar. With robust retail sales data bucking trends of soft economic data in the past few months, investors pared back forecasts of rate cuts in the first half of the year.

The Japanese yen strengthened against the dollar as daunting Philadelphia Fed business index figures was released. The yen also drew some support from weaker equity markets, and shrugged off news that the Japanese government had lowered its assessment of the economy for the first time in 15 months.

The Canadian dollar capped any gains against the US dollar after reports showed December retail sales were weaker than forecasted. The Canadian retail sales rose 0.6 % in December which was lower than the 0.8 % median forecasted. This report increased the chance of a 50 basis point rate cut by the Bank of Canada at its next meeting, bringing down the 4 % benchmark interest rate to 3.5 %.

The Australian and New Zealand dollars strengthened against the US dollar, as investors' optimism the interest-rate advantage between the two nations over the US will widen. The Aussie dollar has maintained its performance against a basket of currencies on expectations of further increase in interest rates and a surge in gold prices. Both the Aussie and the kiwi has benefited from a partial revival of carry trades.

Union Bank of California
The Bank of Tokyo-Mitsubishi Group

U.S. Recession? Who Would Be Next?

Executive Summary

Financial markets in most countries have been in turbulence in recent days due, at least in part, to growing concerns about prospects of a U.S. recession and implications thereof for growth in foreign economies. Although our view is that the U.S. economy will narrowly miss recession in 2008, we proceed in this report under the assumption that the U.S. economy will indeed experience a downturn this year. Would the rest of the world follow the United States into recession? If not the entire world, then which countries would be most affected by an American recession?

The most direct way that an American recession would spread to the rest of the world is via the weaker exports to the United States. In that regard, Canada and Mexico stand out as being the most susceptible to an American downturn, especially a severe one. Although the European Union is the least exposed nation to exports to the United States, at least as measured as a percentage of local GDP, Europe does not have much cushion due to its relatively low overall GDP growth rate. Contrary to popular perceptions, the Chinese economy would not collapse if the United States experiences recession. Small open Asian economies, such as Singapore and Taiwan, might feel more of an impact, but these economies are better able to withstand an American downturn than they were during the last cycle. Most Latin economies probably would not fall apart either.

Economic fundamentals in many economies, especially in the developing world, have improved over the past decade. Many developing economies are no longer incurring sizeable current account deficits, which makes them less vulnerable to sudden outflow of foreign capital that would sharply weaken growth. Significantly lower inflation rates give foreign central banks more leeway to cut interest rates if growth starts to weaken, and fiscal policy could turn expansionary because fiscal deficits in many countries have largely been reined in. Although most countries have not completely "de-coupled" from the U.S. economy, they are better able to withstand an American downturn than they were previously.

U.S. Economic Weakness Spreads to the Rest of the World via Trade Flows

The media has been filled with stories recently about a looming U.S. recession. Although our view is that the U.S. economy will narrowly miss recession this year, our forecasted GDP growth rate would make 2008 the weakest year since 2002.1 Whether or not the United States experiences an actual recession this year, the rest of the world clearly will still feel the effects of slower U.S. economic growth. Our official forecast notwithstanding, let's proceed under the assumption that America will indeed slip into a recession in 2008. If that is the case, what other countries in the world would be at risk from a U.S. economic downturn?

The most direct way that a U.S. recession would spread to the rest of the world would be via trade flows. The American economy accounts for roughly 25% of global GDP, so a downturn in the United States would have a detrimental effect on most countries' total exports.2 Exhibit 1 shows exports to the United States as a percentage of GDP for major regions in the world.

Exhibit 1

Canada and Mexico Are the Most Exposed to a U.S. Downturn

The most exposed region to an American economic downturn is North America (i.e., Canada and Mexico), which should come as little surprise due to the proximity of those countries to the United States. Exhibit 2 shows that GDP growth rates in Canada and Mexico have been highly correlated historically with real import growth in the United States. Over the past few quarters, U.S. import growth has slowed but real GDP growth rates in Canada and Mexico have strengthened. Given extensive trade ties with the United States, however, it seems like just a matter of time before growth in Canada and Mexico slows as well. Indeed, monthly economic indicators suggest that the Canadian economy down-shifted a notch in the fourth quarter.

Exhibit 2

Does this mean that Canada and Mexico are doomed if the United States slips into recession? Not necessarily. Although the Canadian recession of 1990-91 was deeper and longer than the downturn the U.S. economy experienced at that time, Mexico escaped relatively unscathed. Likewise, the United States helped to pull Mexico into recession in 2000–2001, but Canada managed to continuing growing, albeit at sluggish pace, during those years. Either country could conceivably stay out of a recession if any American downturn in 2008 was relatively short and shallow, a la 1990–1991 and 2000–2001. Canada's abundant supply of natural resources, which are in high demand in the rest of the world, could help to support Canadian economic activity. However, it does not seem credible that Canada and Mexico could avoid recession if the U.S. economy contracted sharply.

Europe Is Not Completely Immune from a U.S. Downturn

On the other end of the spectrum, the exports from the European Union to the United States are equivalent to only 2% of EU GDP, making the region the least directly exposed to the U.S. economy as a percentage of local GDP. Although it may seem that the European Union has little to fear, the effects on EU growth from an American downturn may be more significant than what first meets the eye. Although domestic demand has been the primary driver of Euro-zone GDP growth over the past few years, net exports have also made positive contributions to growth over that period. In addition, the relatively low growth rate in the Euro-zone gives the region less cushion should the U.S. economy slip into recession.3 In our view, the Euro-zone should not be complacent about a potential U.S. recession.

On the other hand, the American economy would not necessarily pull down the Euro-zone with it, especially if any U.S recession were relatively minor. As noted above, domestic demand has been the primary driver of Euro-zone GDP growth over the past few years. In addition, ECB monetary policy is not exceptionally tight at present. Indeed, some ECB policymakers believe policy should be tightened further to insure that inflation expectations to do not rise.

The United Kingdom may fare a bit worse from a U.S. recession than most countries in continental Europe. U.K. economic growth is starting to weaken. and the recent softening in the housing market could have a knock-on effect on consumer spending, the main driver of British GDP growth over the past few years. Moreover, monetary policy in the United Kingdom is currently more restrictive than policy in the Euro-zone. Although British export exposure to America is comparable to ratios across the Channel, the last thing the U.K. economy needs at present is the shock of a significant downturn in exports to the United States.

Exhibit 3
Asian Growth Surely Would Slow, but Not Collapse

What about the developing world? Exhibit 3 shows that growth in the developing world generally has slowed in past U.S. downturns. That said, the developing world appears to have "de-coupled" from the U.S. economy in the past few years. That is, real GDP growth in the United States has slowed but economic growth in developing countries has strengthened. Is the developing world now immune to a recession in the United States?

Let's start with Asia, where exports to the United States are equivalent to 7% of the region's GDP. The popular perception is that Asian economic growth, especially growth in China, is driven by exports of consumer products to the United States. If this perception has any basis in fact, then Asia could slow sharply if the U.S. economy slips into recession.

However, Exhibit 4, which shows that the correlation between U.S. import growth and growth in Chinese industrial production is quite low, casts some doubt on the notion that Chinese economic growth is driven by the whims of U.S. consumers. Although American import growth plunged in 2001 as the U.S. economy slid into recession, growth in Chinese industrial production barely budged. More recently, U.S. import growth has been weakening, but Chinese IP growth has strengthened. There must be much more to Chinese economic growth than simply exports to the United States.

Exhibit 4

Indeed, Chinese economic growth springs largely from two sources. First, high savings rates finance robust growth in capital spending. Second, migration of millions of rural underemployed workers gives the teeming factories in the coastal provinces a source of cheap labor. Although net exports have made positive contributions to Chinese GDP growth over the past few years, the real drivers of the Chinese economic growth are capital accumulation and sizable increases in the productive labor force. A downturn in the U.S. economy surely would cause the overall rate of Chinese GDP growth to slow, but it would not lead to a collapse of the Chinese economy as recent history demonstrates. U.S. GDP growth slowed sharply from 3.7% in 2000 to only 0.8% in 2001. In contrast, Chinese GDP growth only edged down from 8.0% in 2000 to 7.5% the following year. An American recession certainly would be felt in China, but the Chinese economy likely would not collapse.

Some of the very open economies in Asia (e.g., Taiwan, Singapore and Hong Kong) could be affected more than China from a downturn in the United States. In our view, however, these economies are better able to withstand a significant American slowdown than they were during the last U.S. recession. Most Asian countries plunged into deep recessions in the late 1990s after a series of financial and economic crises swept through the region. Although economic growth turned positive again in 1999, the battered economies were not strong enough to withstand the U.S. downturn in 2001 that was centered in the tech industry, a key export of many Asian economies. Consequently, the region slipped back into recession early in the decade.

Back-to-back recessions resulted in stagnant investment spending in many Asian economies for nearly a decade. However, pent-up demand, especially in nonresidential construction, has led to an upturn in capital spending across the region in the past year or so. In addition, consumer spending has accelerated. Therefore, domestic demand has become an important economic driver again, and consequently growth in the region is not as dependent on exports to the United States as it was even a few years ago.

Asia Is Becoming Increasingly More Important for Latin America

According to Exhibit 1, the rest of Latin America has significantly less export exposure to the U.S. economy than Mexico. That said, exports to the United States are equivalent to 6% of Latin GDP, and a U.S. downturn undoubtedly would slow growth in the region. But would the U.S. economy pull Latin America down with it?

The region may be able to withstand a U.S. recession better than it has in the past because Asia is becoming an increasingly important export destination for most Latin countries. Latin America is rich in resources, and its exports to Asia have boomed over the past few years. For example, Latin exports to China have risen six-fold since 2000. Although the United States continues to represents the largest single export market for Latin America, the fast-growing economies of Asia offer some offset for Latin America. Moreover, we believe most developing countries, including those in Latin America, are better able to withstand a significant slowdown in the U.S. economy than they were in past cycles.

Most Developing Economies Less Susceptible to a U.S. Downturn due to Stronger Economic Fundamentals

The underlying economic fundamentals in most developing countries have improved dramatically over the past decade. Whereas the developing world racked up significant current account deficits in the 1990s, it is now incurring sizable surpluses (see Exhibit 5). Therefore, most developing countries are less susceptible to a sudden outflow of foreign capital that would lead to significantly slower economic growth. In addition, inflation in the developing world has receded from double-digit rates about a decade ago to low-single-digit rates currently, which gives central banks in developing economies more leeway to ease monetary policy should growth start to slow. Fiscal policy could also turn expansionary because most developing economies no longer incur large fiscal deficits. Finally, high personal savings rates in many developing economies can help to support consumer spending if income growth should start to slow.

Exhibit 5

Conclusion

Some analysts have claimed recently that many countries have "de-coupled" from the U.S. economy. That is, these economies are not as dependent on U.S. economic growth as they once were, and they would be little affected by an American recession. In our view, this "de-coupling" thesis is overblown. The U.S. economy accounts for approximately 25% global GDP, and turning one-quarter of the world's output negative certainly would have an effect on other nations. As income in export industries in foreign economies slows, the multiplier effects in the economy will lead to slower growth in consumer and business spending in those economies as well.

So, what foreign countries would be most affected by an American recession? Due to their extensive trade ties with the United States, Canada and Mexico stand at the top of the list. The European Union has the lowest direct export exposure to the United States, at least when measured as a percentage of local GDP, but its relatively low GDP growth rate does not give it much cushion should exports to the United States fall sharply. Contrary to popular perceptions, the Chinese economy would not collapse should America slide into recession. Indeed, Chinese growth slowed only mildly during the last U.S. recession. Small open Asian economies would likely be affected more than China, but those economies are better able to cope with a U.S. downturn than they were a few years ago.

Obviously, the effects on foreign economies depend on the severity of any U.S. recession. The deeper and longer the recession, the greater impact it would have on the rest of the world. Although a U.S. recession could conceivably last longer than the last two relatively mild and short recessions, it probably would not approach the severity of the 1981-82 downturn when GDP contracted 2.3%. In an effort to wring inflation out of the economy, the Fed tightened policy significantly prior to that recession. It did not let up until the economy had weakened significantly. Although housing and the ongoing credit dislocations will continue to weigh on the economy, Fed policy has turned accommodative and the Bush administration and Congress recently agreed on a fiscal stimulus package.

Although most regions of the world are not immune to the effects of an American recession, many are better able to withstand a downturn in the United States than they were in past cycles. China is starting to emerge as an important driver of growth for many other Asian economies, although it will be a number of years before China replaces the United States as the world's largest economy. More important, the underlying fundamentals of many foreign economies have improved significantly over the past decade or so, leaving them less susceptible to the knock-on effects that a U.S. recession would entail as well as giving them the wherewithal to respond appropriately with macroeconomic policies should growth weaken.

Wachovia Corporation

Related Posts:
Navigating The Economic Recession of 2008

Blogging 101

If writing is an art, then, blogging is one way of using words to come up with an art. This is because people who are into blogging are the ones who are artistic on their own sense, carefully choosing words that would best describe their feelings, sentiments, wishes, desires, and everything.

Basically, blogs were first introduced as weblogs that refer to a "server’s log file." It was created when web logging hit the virtual market. Since its inception in the mid-1990s, web logging gradually saturated the virtual community making the Internet a viable source of greater information.

However, with web logging, you still need a web site and domain names, but with blogging, you do not need anything just an account with blog providers. In most cases, these kinds of blogs are free of charge.

With the onset of blogging in the industry, personal journaling had been a common ground for people who wish to be known all over the world. However, not literally famous as this is not a case on being popular or well-known personality.

Generally, blogs are created for personal use. Like a journal, people can write their daily adventures, sentiments, and whatever ideas they want to express online.

Nevertheless, with the advent of the online businesses, blogs had gradually taken the limelight in providing businesses a chance to boost their productivity online. This is where the business blogs have taken the limelight.

Business blogs are, basically, created to advertise the services or products of a certain web site or online business in order to increase online sales.

Moreover, business blogs are also one way of promoting the company so that the other readers will know that a certain company exists online. With blogs, entrepreneurs are able to establish a name in the virtual market through articles that can be very useful in the reader’s life.

From there, you can make money out of blogs by simply syndicating it to your business’ web site. This can be done through the RSS technology.

So, if you are thinking to create a blog, whether for business or for pleasure, you need to know some tips that could help you get through and make your blog one of the interesting blogs online.

Here’s how:

1. Consider your audience

Even if your blog is generally personal, still, it would be better to consider the minds of your readers. You have to think of something that would interest them.

After all, most of the reasons of people who write blogs are not at all confined to their own personal motives. Most of them would love to be "heard" (or read) and would love to be known, in some way or another, even for just a minute. Hence, it is very important to come with a write up that everybody can understand, not necessarily that these people can relate to it but they can understand it.

2. Pictures speaks a thousand words

To make your blogging worth the browsing effort of your readers, it would be extremely nice if you will put some pictures in it. It does not necessarily mean you have to place a picture of yourself. Any photographs will do as long as it does not pose danger or insult to anyone who will be reading your blog.

3. Make constructive and beneficial blogs

Even if you are free to write anything you wan to say to the world, still, it would be better to create some write-ups that would be beneficial to your readers.

After all, its information technology that you have there so better be inclined to provide information rather than sheer quirky entertainment.

4. Avoid making multifaceted and complicated blogs

In order to have an interesting blogs, try not to use some highly technical and highfalutin words. After all, it is not a science discourse or a debate that you are making, so better stick to simple facts and short blogs.

Bear in mind that most people who use the Internet usually do more scanning than scrutinizing each site word for word. Therefore, it would be better to come with blogs that will not bore your readers just because you have these lengthy articles.

5. Make it interactive

As much as possible and if your capacity will allow it, make your blog interactive. Yu can do this by placing some video or audio clips in your blog.

You can even place an area for comments or for some feedbacks. In this way, you can get some impressions or reactions of other people. Who knows, you might even gain some friends just by making them feel at home in your blog site.

Indeed, blogs are not created just for the mere fun of it. It also has its own purpose in the world of the Internet.

Therefore, for people who wish to harness their craft, as far as writing is concerned, blogs are the best way to do it.

As they say, blogging is the contemporary term of creative and commercial writing.

What's Going on with U.S. Inflation?

HIGHLIGHTS

- U.S. core CPI will continue to test the Fed's implicit comfort level through 2008.
- Goods prices having less of a dampening influence than in the past, and this will likely continue to be the case going forward.
- Prices in the service sector proving to be sticky.
- Next Fed policy meeting on March 18th could mark the end of the easing cycle.

Yesterday's U.S. CPI report for January was not what the doctor ordered for the ailing U.S. economy. The annual rate for core CPI edged up a notch to 2.5%, testing the upper bound of the Fed's implicit comfort level. To make matters worse, the three-month annualized trend accelerated to 3.1%, the highest level in over a year and a clear indication of percolating price pressures.

With the U.S. economy already in a state of stagnation that is expected to persist over the first half of the year, the ongoing build-up in economic slack limits the risk of a sharp intensification of price pressures. However, don't look for a meaningful drop either. Rather, core CPI could very well hover at or slightly above 2.5% for the remainder of this year and next, irrespective of whether the U.S. economy dips into a technical recession or not. That's because some of the key past downward influences on CPI have lost their influence in recent months.


Culprit #1 - higher goods prices

The decline in the U.S. dollar and tightening global capacity is translating into higher consumer prices for American goods, which are heavily imported. The graph below depicts the tight relationship between import prices (excluding fuels) and core CPI.

The three-month trend in prices for core goods (which excludes energy and food costs) trended up to 1.2% in January, the highest level since May 2006. Although this still-low level is hardly reason for alarm, it does mark a crucial reversal of fortunes. Prices for goods had been the one area that consistently weighed down the broader CPI index. Annual rates for this subcomponent held in negative territory for practically the whole of 2007, and pressures are now building to push the trend in the opposite direction.

For instance, the three-month annualized gain for apparel is at 4.6%, also the highest level since the spring of 2006. This component has posted five consecutive monthly gains, suggesting the hefty 0.4% gain in January cannot be dismissed as a statistical quirk. And, rising prices for clothing is not an isolated event. Medical products are also mirroring this trend with the 3-month annualized rate at a hefty 5.1% - the highest since January 2006.


Culprit #2 - sticky service prices

Sticky prices for services are the second influence preventing the CPI index from slipping back into tamer territory. The biggest component within the CPI index resides within the shelter subindex known as homeowner's equivalent rent (OER). This subcomponent represents about onethird of the CPI index and has always been a source of debate and confusion among market pundits. During the housing boom, there were heated discussions as to whether the OER index was underestimating price pressures in the economy. When home prices were rising at a double-digit annual pace, the OER component held steady at 2.3% from 2003-2005. Why? The OER does not reflect home prices; rather it is supposed to capture the user cost of capital, which means it approximates rent costs and not changes in the asset value. It is for this reason that even though annual growth in home prices for detached homes has been contracting for 17 straight months, the OER component in CPI is standing firm at +2.8%, which is where it has been for the past four months. Granted, this is a sharp deceleration from the 4.3% level registered one year ago, but it obviously does not compare to the carnage in the housing market.

Because the OER component more closely tracks rental prices than home price movements, it may edge down over the course of the year at a rather slow rate. Rental vacancy rates are elevated but have been relatively stable over the past three years. In addition, homeownership rates have fallen back to levels seen in 2002, as eroded housing affordability squeezed people back into the renters market. And, even though prices are falling for homes and there is a high supply of vacant homes on the market, renters will probably be cautious in jumping into the housing market given the economic uncertainty that now permeates the landscape.

Although the OER price component is sticky by nature, it is not the only or even most powerful influence on core CPI at the moment. Excluding OER from core CPI reveals that the 3-month annualized trend remains unchanged at a 3.1% pace (compared to 1.4% a year ago). This is the highest level since 2005. Among some of the culprits, school tuitions and child care costs are running at a 6.7% annualized 3-month pace after four months of hefty gains, while medical services are holding at an elevated 5.1%.


Bottom line

The Federal Reserve has two legislated goals: price stability and full employment. With many of the economic risks stacked to the downside, the Fed appears to leaning more towards the second mandate by erring on the side of caution and cutting interest rates in order to prevent a deeper downturn. However, the Fed will be hard-pressed to ignore the stickiness that inflation is exhibiting. And, of course, the longer energy prices and other input costs remain elevated, the greater the chance that firms will have little choice but to pass those extra costs along to consumers. From the Fed's perspective, it prefers the broader core PCE measure to gauge economy-wide price pressures than the core CPI measure. The former sat at a 2.2% annual rate at the end of 2007 and recent developments in the CPI measure are not good news for the PCE index. Within the latter, the shelter component carries a smaller weight than the CPI index (15% vs. 33%), meaning that any cooling in the shelter CPI component won't have as big an impact on the core PCE measure. Meanwhile medical costs, which are on the upswing, carry a bigger weight in the PCE index (20% vs. 6.2%). Even the apparel component carries a larger weight (4.6% vs. 3.8%). Little surprise, then, that even though the Fed downgraded its estimate for 2008 GDP growth by half a percentage point in the FOMC January 29/30 minutes, it raised its estimate for core PCE to 2-2.2%. This is consistent with core CPI within a 2.5-2.7% range.

This is why the central bank is unlikely to cut rates drastically beyond current levels. Rather, we believe the next policy meeting on March 18th will mark the end of an easing cycle, with the Fed delivering a final 50 basis points in rate cuts. And, once the economy shows clear signs of recovery, the Fed will probably want to act quickly to remove some of the monetary stimulus that it has put in place in recent months.

TD Bank Financial Group

Foreign Exchange Market Daily Update

The US dollar was a touch weaker against a basket of currencies. Expectations of further interest rate cuts were cemented after minutes from the Fed's January policy meeting were released. In the minutes, the Fed indicated concern over the US economy even after aggressive rate cuts and lowered its 2008 US growth forecast sharply as more setbacks were foreseen. Many investors are forecasting another 50 point cut at the next Federal Open Market Committee's meeting on March 18th, lowering the federal funds rate to 2.5 %. In other news, the US jobless claims fell to 349,000 from an upwardly revised 358,000, which stands at the highest level in more than two years.

The Euro traded within a narrow range against the dollar. In a statement released by the European Commission, euro zone economic growth is expected to slow to 1.8 % in 2008 from 2.7 % in 2007, while inflation should stay well above the ECB target. EU executives forecasted a weaker year due to high commodity prices, sharp economic growth slowdown in the US and financial market turmoil. In January, the euro zone hit a record high inflation of 3.2 % in 11 years, making it hard for the ECB to cut rates. Therefore, unlike the dollar, investors scaled back the extent of ECB rate cuts, giving the euro a helping hand.

The British pound made a comeback against the dollar, after much stronger than expected UK retail sales data. Sales grew 0.8 % in January recuperating from a 0.2 % fall in December, which was their strongest growth in almost a year. This prompted investors to scale back expectations of rate cuts by the BoE. However, analysts indicated that the move in rate expectations and in sterling may be prematurely overdone, due to seasonal swings which lent the hand to stronger retail sales data. Like the US and the euro zone, BoE policymaker Andrew Sentence said Britain's economy may be on track for it's a sharp slowdown, though the risk of recession is remote.

The Japanese yen remained relatively unchanged against the dollar. With hopes of further US rate cuts relatively cemented after minutes from the Fed's January meeting release, investor risk appetite was boosted, bringing the low-yielding yen under pressure.

The Canadian dollar was little changed against the US dollar. With an alarming economic downturn in Canada's biggest trading partner, investors fear the effect could spill across the border. To some extent, the loonie has been supported by strong oil prices which hit a record high on Wednesday.

The Australian and New Zealand dollars rose against the US dollar with gains in commodity prices and a rally in US stocks. With the rally in US stocks, investor confidence in carry trade was boosted as they partook in purchasing high-yielding assets by borrowing funds from the low-yielding currencies such as the Japanese yen.

Union Bank of California
The Bank of Tokyo-Mitsubishi Group

STOP: Lady Is Passing

Hey ow readers, time to have to some fun. What would you do if you are late for a meeting and there is an old lady taking ages to cross the road? Don't answer now, watch this video and see what can happen, after seeing it I'm sure you will think better before take an action in a such situation.



See you in the next posts!
Thanks for your support.

Forex Broker Guide

Introduction

The following is a list of questions you may like to ask yourself, your broker and other traders about a particular firm you have in mind. You can use this checklist to narrow down your selection of forex companies to fit your requirements. You might also like to read the forex broker ratings page on this site to see how other traders are rating and reviewing other brokers.

The following links will also give you some background information on U.S. FCMs (Futures Commission Merchants).

- Selected Financial Data for FCMs
- NFA Background Affiliation Status

1. Word of Mouth

- What do other traders say about the broker?
- What is their customer service/dealing desk like?

2. Safety of Funds

- Is the broker regulated?
- What regulatory organisation are they registered with and what protections does this afford you?
- Are client funds insured against fraud at the firm?
- Are client funds insured against bankruptcy of the firm?

3. Execution

- What business model do they operate? i.e. Market Maker, ECN or NDD?
- How fast is their order execution?
- Are orders manually or automatically executed?
- What is the maximum trade size before you are put on manual execution?
- Are all clients trades offset?

4. Spread

- How tight is the spread?
- Is it fixed or variable?
- Is it larger for mini accounts?

5. Slippage

- How much slippage can be expected in normal and fast moving markets?

6. Margin

- What is the margin requirement? e.g. 0.25% (max 400:1 leverage), 0.5% (max 200:1 leverage), 1% (max 100:1 leverage), 2% (max 50:1 leverage), etc.
- Does it change for different currency pairs or days of the week?
- Is it the same for standard and mini accounts?

7. Commissions

- Do they charge commissions? (Most market makers commissions are built into the spread, whereas ECN's charge a small fee)

8. Rollover Policy

- Is there a minimum margin requirement in order to earn rollover interest?
- What other requirements or conditions are there for earning rollover interest?

9. Trading Platform

- How reliable is it during fast moving markets and news announcements?
- How many different currency pairs can you trade?
- Do they offer an Application Programming Interface (API) for automated trading systems?
- Does it offer any other special features? (e.g. One click dealing, trading from the chart, trailing stops, mobile trading etc.)

10. Trading Account

- What is the minimum account opening balance?
- What is the minimum trade size?
- Can you adjust the standard lot size traded?
- Can you earn interest on unused equity in your account?

GoForex

Essential Elements of a Successful Trader

Courage Under Stressful Conditions When the Outcome is Uncertain

All the foreign exchange trading knowledge in the world is not going to help, unless you have the nerve to buy and sell currencies and put your money at risk. As with the lottery “You gotta be in it to win it”. Trust me when I say that the simple task of hitting the buy or sell key is extremely difficult to do when your own real money is put at risk.

You will feel anxiety, even fear. Here lies the moment of truth. Do you have the courage to be afraid and act anyway? When a fireman runs into a burning building I assume he is afraid but he does it anyway and achieves the desired result. Unless you can overcome or accept your fear and do it anyway, you will not be a successful trader.

However, once you learn to control your fear, it gets easier and easier and in time there is no fear. The opposite reaction can become an issue – you’re overconfident and not focused enough on the risk you're taking.

Both the inability to initiate a trade, or close a losing trade can create serious psychological issues for a trader going forward. By calling attention to these potential stumbling blocks beforehand, you can properly prepare prior to your first real trade and develop good trading habits from day one.

Start by analyzing yourself. Are you the type of person that can control their emotions and flawlessly execute trades, oftentimes under extremely stressful conditions? Are you the type of person who’s overconfident and prone to take more risk than they should? Before your first real trade you need to look inside yourself and get the answers. We can correct any deficiencies before they result in paralysis (not pulling the trigger) or a huge loss (overconfidence). A huge loss can prematurely end your trading career, or prolong your success until you can raise additional capital.

The difficulty doesn’t end with “pulling the trigger”. In fact what comes next is equally or perhaps more difficult. Once you are in the trade the next hurdle is staying in the trade. When trading foreign exchange you exit the trade as soon as possible after entry when it is not working. Most people who have been successful in non-trading ventures find this concept difficult to implement.

For example, real estate tycoons make their fortune riding out the bad times and selling during the boom periods. The problem with trying to adapt a 'hold on until it comes back' strategy in foreign exchange is that most of the time the currencies are in long-term persistent, directional trends and your equity will be wiped out before the currency comes back.

The other side of the coin is staying in a trade that is working. The most common pitfall is closing out a winning position without a valid reason. Once again, fear is the culprit. Your subconscious demons will be scaring you non-stop with questions like “what if news comes out and you wind up with a loss”. The reality is if news comes out in a currency that is going up, the news has a higher probability of being positive than negative (more on why that is so in a later article).

So your fear is just a baseless annoyance. Don’t try and fight the fear. Accept it. Have a laugh about it and then move on to the task at hand, which is determining an exit strategy based on actual price movement. As Garth says in Waynesworld “Live in the now man”. Worrying about what could be is irrational. Studying your chart and determining an objective exit point is reality based and rational.

Another common pitfall is closing a winning position because you are bored with it; its not moving. In Football, after a star running back breaks free for a 50-yard gain, he comes out of the game temporarily for a breather. When he reenters the game he is a serious threat to gain more yards – this is indisputable. So when your position takes a breather after a winning move, the next likely event is further gains – so why close it?

If you can be courageous under fire and strategically patient, foreign exchange trading may be for you. If you’re a natural gunslinger and reckless you will need to tone your act down a notch or two and we can help you make the necessary adjustments. If putting your money at risk makes you a nervous wreck its because you lack the knowledge base to be confident in your decision making.

Patience to Gain Knowledge through Study and Focus

Many new traders believe all you need to profitably trade foreign currencies are charts, technical indicators and a small bankroll. Most of them blow up (lose all their money) within a few weeks or months; some are initially successful and it takes as long as a year before they blow up. A tiny minority with good money management skills, patience, and a market niche go on to be successful traders. Armed with charts, technical indicators, and a small bankroll, the chance of succeeding is probably 500 to 1.

To increase your chances of success to near certainty requires knowledge; acquiring knowledge takes hard work, study, dedication and focus. Compile your knowledge base without taking any shortcuts, thereby assuring a solid foundation to build upon.

Jimmy Young

Notes For Running a Home Business!

Before you start a home business, please be aware that home businesses are jam-packed with scams.

So how do you steer clear of falling for the pledge made by those so-called genuine work at home opportunities?

Look for any out of sight fees, because the genuine work at home opportunities must have no fees implicated. They should not be asking you to give them any payment for the job you're going to do for them.

Here are a few samples of work at home opportunities that can be taken advantage of. But keep in mind, if something sounds too good to be true, it most likely is.

Professional spy

Professional spy or private investigation. A lot of people can't relax until they know for sure whether or not their spouse would cheat on them. For that reason there's quite a reasonable market for that kind of business out there, but if you take advantage of one of those opportunities, your job must consists of testing potentially unfaithful partner by getting someone to try and chat them up, and some people regard this as unfair, but each person is entitled to there own view.

This type of work can be mentally hard to handle because if you succeed, the individual who hired you is generally extremely unhappy to have their suspicions realized. And if you fail, the person who hired you will in all probability blame you for not doing a very good job. So whatever happens, you're bound to get snarled up in the emotional consequences between the two.

Cleaning

Cleaning is straightforward money, and there is truly a market for it. A lot of people are working all hours to pay for the mortgage of their home, merely to find that their house could do with a good clean, but don't have the time. This is were you can suggest your cleaning services, and take up this type of opportunities, but only advertise for professionals who can't find the time to do their own cleaning.

Assembly Work

Assembly work is really one of the easiest work at home opportunities out there. This type of work can be done in your own time. What's more, this type of work at home opportunity only requires the lowest amount specialist skills. Before you start a home business, please be aware that home businesses are jam-packed with scams.

So how do you steer clear of falling for the pledge made by those so-called genuine work at home opportunities?

Look for any out of sight fees, because the genuine work at home opportunities must have no fees implicated. They should not be asking you to give them any payment for the job you are going to do for them.

Here are a few samples of work at home opportunities that can be taken advantage of. But keep in mind, if something sounds too good to be true, it most likely is.

Professional spy

Professional spy or private investigation. A lot of people can not relax until they know for sure whether or not their spouse would cheat on them. For that reason there is quite a reasonable market for that kind of business out there, but if you take advantage of one of those opportunities, your job must consists of testing potentially unfaithful partner by getting someone to try and chat them up, and some people regard this as unfair, but each person is entitled to there own view.

This type of work can be mentally hard to handle because if you succeed, the individual who hired you is generally extremely unhappy to have their suspicions realized. And if you fail, the person who hired you will in all probability blame you for not doing a very good job. So whatever happens, you are bound to get snarled up in the emotional consequences between the two.

Cleaning

Cleaning is straightforward money, and there is truly a market for it. A lot of people are working all hours to pay for the mortgage of their home, merely to find that their house could do with a good clean, but do not have the time. This is were you can suggest your cleaning services, and take up this type of opportunities, but only advertise for professionals who can not find the time to do their own cleaning.

Assembly Work

Assembly work is really one of the easiest work at home opportunities out there. This type of work can be done in your own time. This type of work at home opportunity only requires the lowest amount specialist skills.

There are usually training materials and information packets incorporated with this type of work. But bear in mind that this types of work is very much prone to scams, so you need to be extremely careful here. Some companies in fact ask that you send in a certain sum of money first before you can take delivery of the informational material from them. In addition, there is a likely possibility that they will reject your finished products by saying that they do not come "up to standard." You will then unfortunately have to sell the merchandise yourself if you want to get a little back for your effort.

Tailoring services

If you are experienced with a needle, countless people find that they buy the perfect outfit only to find out that after they put on or lose weight, it does not fit them any longer. You can help these people with your skills and make a tidy profit from it.

How to find work at home ideas

The best way to find ideas for starting your own work at home business is to first do a search, type in your preferred work, but you must do an advanced search, or you will just get millions of irrelevant results, you will also need to visit a forum relating to what you are interested in doing, and see what others are saying about it.

What makes online casinos so profitable?

A recent report says that online gambling has generated nearly 10 billion dollars over the last year. There are an estimated 3.5 million online gamblers in the UK alone. Given the fact that the first online casino emerged in the mid-1990s and that it was not until the beginning of the new millennium that online casinos became popular, what are the factors that have helped this young industry become so profitable?

The main factor is of course the large and continuously growing interest of people. This is due to easy accessibility, facilitated by widespread internet coverage, as well as the improved security and reliability of online transactions. This accessibility has resulted in the recent involvement of some groups that not traditionally been regular participants in gambling, such as women, young people, and successful professionals. Hence, online casinos have been able to rely on a large and constantly growing customer base.

Another factor that has contributed to the success of online casinos is the lower costs associated with the operation of any internet-based business. Online casinos are much cheaper to open and maintain than land-based gambling houses, and the costs they save in the process can be deployed to the benefit of customers, in the form of generous bonuses and big payouts. One reason most gamblers are loyal to an online casino is the payouts it offers, as shown by the results of recent survey conducted by Red Lounge Casino, one of UK’s largest online casinos. The low costs of online casino operations are closely related to another factor crucial to their successful financial performance.

Online casinos are usually able to provide the latest software and superb web design. In terms of the variety of games and promotions, they are much more flexible than land-based casinos. These features are also factors that have contributed to the growing popularity of online casinos. The combined effect of all these factors have resulted in a gambling environment entirely different from anything that has existed before. Traditional land-based casinos are no longer the “only game in town”. People from all walks of life can easily experience the thrill of casino gaming in the comfort of their homes.

Today’s gambler may be anyone – the woman next door who also enjoys gardening, the young would-be lawyer, the successful executive in a large multinational. Online casinos have taken advantage of all the benefits of the internet and have managed to establish an impressive industry.

US Economic Outlook and Credit Market Difficulty Warrant Aggressive Fed Rate Cuts

Bearish outlook for the US consumer remains one of the driving forces behind a similarly pessimistic view for the domestic economy. Given worsening trends in labor data and uninspiring Retail Sales results, it remains clear that momentum remains to the downside for relevant consumer activity indicators. Such developments may be singlehandedly sufficient in justifying further Federal Reserve interest rate cuts, and indeed markets have clearly discounted aggressive rate reductions. Whether or not the Fed actually follows through with market predictions will very much depend on medium term developments in domestic labor and consumer spending trends.


CREDIT MARKET: HOW IS IT DOING

Conditions in the credit market worsened over the past week with the cost of protecting corporate bonds from default soared to a record. Adding fuel to the already turbulent market were a few major news headlines that threaten to further disrupt the much needed rebound in confidence among lenders and borrowers. From the UK, news that the government would nationalize troubled bank Northern Rock, until a fair sale went through, calmed fears of an impending bankruptcy. However, it would also signal to the market that the government was more concerned about the state of the financial markets than they had originally let on. The other headline that played on the market was news that some of the largest bond insurers would divest their subprime branches to protect their credit rating. This would leave $580 billion in assets open to downgrades.
A DEEPER LOOK INTO THE CHANGES THIS WEEK:

Falling interest rates have done little to stimulate growth or to improve sentiment in the lending market. Credit default swaps rose to a record high Wednesday as testimony from Fed Chairman Bernanke and Treasury Secretary Paulson last week rung in investors' ears. With the Fed expecting worsening conditions in lending and growth, demand for credit will struggle.

Short-term money market assets struggled through another week of falling rates. Demand at the short-end of the yield curve persisted thanks to demand from lenders looking to cover their long-term liabilities with short-term debt. With rates LIBOR rates testing new, multi-year lows, it is clear the market is calling on the Fed for another aggressive rate cut in March.


STOCK MARKET: HOW IS IT DOING?

The bullish rebound in stocks last week proved to be short-lived. Bears retook the controls on the equities market, guiding the benchmark Dow Jones Industrial average back below 12,300 in a 2.5 percent pull back from last week's highs. Technically, the benchmark stock indexes have entered a period of congestion that are now producing notable wedges which may call for resolution on direction sooner rather than latter. From the headlines, there have been few encouraging reports for equity investors to cling to. Bernanke and Paulson's testimony before congress last week produced forecasts for troubles in lending and the housing market to deepen before they improve. Further promoting selling sentiment, consumer confidence dropped to a 16-year low while core inflation grew at its fastest clip in 11 months. With conditions clearly souring for the economy's largest sector, the outlook for revenue does not look promising.
A DEEPER LOOK INTO THE CHANGES THIS WEEK:

Breaking the Dow down, there were few sectors that were bucking the market's bearish momentum. However, there were a few standout underperformers in the mix. This past week's consumer-centric data hit the retail sector disproportionately as vital domestic consumption threatens to plunge faster than the rebound in foreign orders can fill in. The other, hard hit sector was the Financial group. A few, new writedowns from major banks suggests there is still a considerable pool of assets out there that have yet to be assigned a market-calculated value.

Though the broad market as rather reserved in its weekly decent, the financial sector was looking at substantial losses. The top fundamental headline for group were reports that major bond insurers would split, leaving the credit rating on their core business safe and allowing the subprime and hard hit ABS groups to fend for themselves. While this would salvage the overall firm's credit rating, it would also almost certainly lead to significant downgrades on $580 billion in assets and further roil the credit markets.

U.S. CONSUMER: HOW ARE THEY DOING?

Bearish outlook for the US consumer remains one of the driving forces behind a similarly pessimistic view for the domestic economy. Given worsening trends in labor data and uninspiring Retail Sales results, it remains clear that momentum remains to the downside for relevant consumer activity indicators. Such developments may be singlehandedly sufficient in justifying further Federal Reserve interest rate cuts, and indeed markets have clearly discounted aggressive rate reductions. Whether or not the Fed actually follows through with market predictions will very much depend on medium term developments in domestic labor and consumer spending trends.
A DEEPER LOOK INTO THE CHANGES THIS WEEK:

MBA Mortgage Applications continued their incredible volatility through recent weeks, falling an incredible 22.6 percent in the seven days ending February 15. Such week-to-week jumps arguably underline the stresses in the domestic mortgage market, and the elevated levels of MBA Mortgage Applications highlight difficulty in obtaining credit. Recent housing market indicators have remained relatively stable, but risks continue to remain for a persistent US housing recession. Outlook for the domestic homeowner looks dim in the absence of a clear improvement in US real estate trends.
Walmart shares continue to outperform broader equity markets, and recently bullish earnings data suggests that the discount retailer may be able to withstand bearish momentum for the retail sector. Home improvement company Home Depot has not been nearly as fortunate, and persistent pessimism on domestic housing trends may potentially force further losses in the company's shares. Seen through relevant stock indices, markets remain bearish on prospects for the domestic consumer.

DailyFX

Car Insurance: How Can You Lower Your Premiums?

Many factors influence the premium for your Motor insurance policy. Your insurer will have asked you many questions whilst producing your quote - some of which will affect your premium and some will not. Below we discuss the key variables that are within the policyholder's control.

Consolidating policies

By insuring a number of vehicles with the same insurer, or by trying to take out home and life insurance through your car insurer, you may be able to secure a ‘bulk buy’ discount.

Location

A big influence on the cost of your car insurance is where you live. The chance of your car being broken into or stolen is a key concern for the insurer. More urban areas traditionally facing greater risk of theft and therefore tend to be more expensive than countryside locations.

Excess

By agreeing to pay a greater excess on each claim you can reduce your car insurance premiums. This is because you are reducing the liability of the insurer and therefore in return they are able to offer you a lower premium.

Your Vehicle

The cheaper and slower your vehicle the lower your premiums are likely to be. If you are looking to buy a new vehicle make sure you fully consider the cost of insurance – you may be able to buy the car but can you afford to run it?

Mileage

You can control your insurance premiums by restricting your annual mileage. However, be aware that if you exceed the restricted number of miles you'll then become uninsured!

Parking

Where you park your vehicle overnight is also very important to the insurers. If it is kept in a locked garage, you should be offered a lower premium than if you leave it unattended in the street.

Security

Security devices that prevent or hinder theft may also reduce your premium. Common examples include alarms and immobilisers, however, be aware that as we improve the quality of our security devices the thieves just become better at bypassing them.

No Claims Discount

Save up your no claims discount by avoiding making small claims upon your policy. After a set number of years, 4 or 5 typically, you'll often be offered the option to pay an additional small premium to protect your no claims bonus. This can prove very helpful if you subsequently end up having an accident.

Advanced driving skills

By taking an advanced driving course you may also be able to reduce your premiums. The Institute for Advanced Motorists and the Royal Society for Prevention of Accidents each offer membership which provides you with discounts for both the cost of driving courses and your car insurance premiums.

Two key variables NOT within the policyholder's control.

Your Sex

Women are statistically less likely to have an accident and, if they do, it's less likely to be serious. Because of these statistics women benefit from lower premiums. It is also worth noting that if you represent one half of a couple you should consider having the female as the primary driver with the male as the second driver.

Your Age

The older you are, the less likely you are to make a claim. As a result insurance companies charge lower premiums for more mature drivers.

One final piece of advice

A large percentage of car insurance is now sold on the Internet. That's because it's convenient and cheap. Many insurers now give a further 10%-15% discount if you buy online.

Life Insurance And The Law

There are no laws in the UK that require a person to have life insurance. It’s an entirely voluntary insurance. About 40% of the UK's working population are covered by life insurance either through their own policy or via an arrangement through their employer.

So the simple things first. You have to be a UK resident in order to buy a life insurance policy from a UK based insurance company. This is not a requirement laid down in UK law, but UK laws and tax arrangements make it impossible for a UK based insurance company to offer insurance to anyone other than a UK resident. But be aware that if, having taken out life insurance, you later live abroad, your policy will be invalidated. Naturally, invalidation does not apply if you are on holiday but if you have a short-term work assignment abroad you are well advised to inform your insurance company before you go.

All UK Insurance Companies are subject to UK Corporate Laws. However, there are special regulations that only apply to insurance companies. These control the value of the risks the companies take on in relation to their financial reserves. These regulations are designed to ensure that your insurance company will be in a position to pay if you claim.

The Data Protection Act 1998 is concerned with way all UK businesses store, safeguard and use the data they collect about people. This is particularly important within the life insurance industry as the companies store significant amounts of very personal information about you – including your age, health record and life style. One of the key provisions of the Data Protection Act says that if a business wishes to pass on your information for marketing purposes, the business collecting the data must tell you of its intention and give you the opportunity of refusing permission for your data be used in that way. Incidentally, all reputable web sites selling life insurance will have a “Privacy Statement” which tells you how they handle your information and how it is used.

The Financial Services and Markets Act (2000) is the most important piece of legislation affecting the promotion of financial services in the UK including life insurance. The Act is highly complex but is primarily concerned with protecting you the customer. The implementations of the Act is overseen by the Financial Services Authority (FSA). The FSA regulates all forms of the promotion of financial products and services including the activities of financial and mortgage advisors in the UK. Their aim is to ensure you receive clear professional advice that reflects your personal circumstances. They also ensure you have a route to compensation should it be proved that you received inadequate or poor advice.

For the layman, the FSA's biggest impact is reflected in the advisors they talk to. The FSA seeks to ensure that all financial advisors are trustworthy and competent which includes being well supervised and well trained, and that any advice is given in your best interests. The FSA also ensures that you are given full and accurate information about the products you are being advised to buy both before and after you have bought them. They also closely oversee the organisations that actually create the financial products.

In fact everyone and every organisation giving financial advice in the UK must be authorised by the Financial Services Authority.

However, the Act makes a distinction between financial products bought as a result of a recommendation from a Financial Adviser and “Execution Only” business. Execution Only is where a customer is wholly responsible for the selection of the investment and therefore the financial advisers' sole responsibility is to process the purchase efficiently. Under Execution Only, the Adviser bears no responsibility for the products suitability for the clients needs.

You should be aware that many of the web sites promoting life insurance operate on this Execution Only basis. However, most web site operators provide extensive information to enable the client to make an informed choice. Sometimes the information is published on the web site and sometimes provided during a follow-up telephone call. Either way, within their Terms of Business the web site will have to tell you on what basis they provide financial services and as part of your application, you will normally be required to confirm that you have read those Terms.

Those Terms of Business will always include details of a complaints procedure. In outline, if a customer wishes to complain, then the customer must detail the complaint in writing and send it to the Compliance Officer for the business employing the advisor. That business then has to investigate the complaint and reply to the customer in writing. If the Compliance Officer upholds the complaint, and the customer has suffered a financial loss as a result, then the business must agree a financial settlement with the customer. Ultimately, if the customer has suffered financial loss and cannot accept either the organisations’ conclusions or their proposed financial settlement, then the situation can be referred to the Financial Ombudsman. The Financial Ombudsman’s service is free to the customer and they are wholly independent. The Financial Ombudsman’s decision is usually binding on both parties.

The other central piece of protection for the customer is the Financial Services Compensation Scheme. This provides the customer with a level of protection if a financial organisation regulated by the FSA becomes insolvent and cannot properly meet its financial responsibilities to its clients.

Postscript
The above information represents the legal aspects we think you will have found most useful. The information is neither definitive nor exhaustive but is simply an introduction for the layman.

If you would like more detailed information relating to the regulation of life insurance companies, insurance brokers, or financial advisers you should visit the Financial Services Authority’s web site at: www.fsa.gov.uk

Mortgage Protection - Easing Your Biggest Concerns.

OK, now you have a lovely new home and with it comes a lovely new mortgage. With the average mortgage advance standing at around £150,000 it's a long-term commitment to repay a lot of money. The repayments also take a fair slice out of your monthly income.

What could go wrong with these financial arrangements and can you hedge your bets by insuring against the risks? After all you have a family to protect.

Most people would identify 5 main areas of concern, all of which boil down to your ability to maintain the mortgage repayments:

- Interest rates might increase and make the monthly repayments unaffordable
- You might loose your job
- You might be forced to take time off work through illness or accident
- You may become permanently unable to work through accident or very serious illness
- You could die before the mortgage is paid off.

The financial industry is packed with pretty shrewd people so it'll come as no surprise to learn that there are financial products to help with each of these risks.

If you want to reduce the risk of interest rates rising to unaffordable levels, you should have discussed these matters with your mortgage adviser. He will then have told you about “fixed” and “capped interest rate” mortgages. As the name implies, a fixed rate mortgage fixes the interest rate you pay whilst with a “capped” mortgage, the lender agrees not to increase your interest rate above a pre-agreed level. Both types of mortgage revert to the standard variable rate after the fixed or capped period finishes which is typically after three or five years, depending on your lender.

Fixed rate mortgages are currently very popular accounting for 55% of new advances and there are some very good deals around. The capped rate for capped rate mortgages is usually set at the outset above the equivalent fixed rates available but the rate you pay is lower than the fixed rates. In this context your interest rate risk can be effectively controlled. After the end of the protected period you always have the option to re-mortgage and find another rate protected deal. There are never any guarantees on the rates that will be available but the mortgage market is highly competitive, especially for re-mortgages, and special rate offers abound. It's really a matter of knowing which lender to approach. When the time comes you'd be well advised to ask a mortgage broker to search out the most suitable options.

Worried about paying your mortgage if you lost your job? Then you need Mortgage Payment Protection Insurance - but be aware that in its basic form, this insurance is really only designed to cover redundancy. If you resign or are fired for gross misconduct your unlikely to be insured. The cost? Online you can expect to pay around £2.45 per £100 of monthly mortgage payment for a policy which starts paying out 30 days after you've been made redundant and will pay out for up to 12 months. You're sure to have been offered similar insurance by your bank or mortgage company but watch out, their premiums are likely to be two or three times higher for identical cover.

Mortgage Payment Protection Policies can also be extended to cover the third area of concern – you lose income through illness or accident. But before you rush into this insurance you need to ask your employer how long they'd continue paying you if you were off work. Remember, you only need to insure for the period after your employer stops paying. You would then receive statutory sickness pay, but the odds are you'll need that income for general living costs. The cost for this insurance? Well, online it'll again cost you around £2.45 per £100 of monthly mortgage payment for a policy which starts paying out after 30 days, However, if you combine illness, accident and unemployment cover all into one policy you can currently get combined insurance for around £3.95 per month. The essential point to remember is that these policies will only pay out for 12 months. That leads on to the fourth area of concern.

How would you pay your mortgage if you were unable to work again through a serious accident or critical illness? In this context it is important to appreciate the reality of the risk. The insurance industry estimates that 1 in 5 men and 1 in 6 women suffer a critical illness before their normal retirement age. Just think what a heart attack at 40 would mean to your family finances, especially if you have a mortgage with many years still to run. For many, insurance is a must.

The best option is to arrange insurance that totally repays the outstanding mortgage if you can't continue to work. That at least removes one big worry. The insurance you need is called Critical Illness Insurance but make sure “total and permanent disability” cover is included. This ensures that your mortgage will be repaid if you are incapacitated through an accident.

You can buy Critical Illness Insurance with “decreasing cover” where the size of the payout decreases as the years go by. This is ideal if you have a repayment mortgage where you are repaying the mortgage bit by bit each month. Decreasing cover is also the cheapest form of this Insurance.

If you have an interest only mortgage, the situation is different as the sum you owe your lender, remains constant. You certainly don't want the cover to decrease - so here you need Critical Illness Insurance with “level cover”.

As with all these insurances, there's always a twist to watch out for. With Critical illness Insurance you always need to survive for a minimum period following an accident or diagnosis of a critical illness. If you don't, the policy will not pay out. With most insurance companies the survival period is 28 days although some have reduced this to 14 days.

That leads on what happens if you were to die. Most lenders insist on Mortgage Life Insurance to repay your mortgage in one lump sum. However, you really don't need it if you're single and living alone. In these circumstances, if you would die, your estate would simply repay your mortgage by selling the property. For everyone else, Mortgage Life insurance is the most commonly held form of mortgage protection. Again it comes in a “decreasing cover” format for those with repayment mortgages and “level cover” format to repay interest only mortgages.

All this insurance will not be cheap but there are ways of significantly reducing the cost. Buy a Mortgage Payment Protection Policy that combines unemployment, accident and illness cover. Sometimes this is called “unemployment and disability” cover. This will save you about 20%. The cheapest way to buy Critical Illness and Mortgage Life Insurance is again to buy a combined policy. Here it's difficult to be precise about the savings as the cost will be strictly calculated on your own personal details and health record - but you can certainly expect to save 20-25%.

The final bit of advice is shop around for the insurance. Your bank or building society will be absolutely delighted to arrange it but you'll pay top dollar. The Internet is by far the cheapest way to buy all these insurances, especially if you use one of the many discounting brokers. You'll find these brokers if you search under “life insurance”, “cheap life insurance”, “life insurance quotes” or “Mortgage Protection Insurance”.

Competition on the net is rife, so it's norm for these brokers to cut commission and pass the savings back to you through lower premiums. There are other aspects you'll need to consider such as whether to buy a policy with a “Guaranteed Premium” or a “Reviewable Premium”. So you're best advised to talk matters over with a life insurance adviser. Ten minutes on the phone with an adviser could save you more and avoid a lot of heartache.

Be lucky, keep fit, happy and well insured!

Benefits of Group Health Insurance

Group Health Insurance is an insurance scheme provided by the insurance companies for a group of persons, such as the employees of an organization at a reduced individual rate. Most of the companies provide group health insurance schemes for their employees, which helps the employees to receive health treatments without any cost they need to pay. Group health insurance ensures the employees of an organization to receive medical treatment quickly so that they can avoid waiting long time in queues and other sufferings.

Group health insurance offers lots of advantages to both the employer and the employees. As far as an employer is concerned, the group health insurance scheme will provide enough medical treatment quickly for the staff of his company and thereby ensures speedy recovery from diseases and keeping disruption owing to illness in the office to some extend. The employee can also provide more focus on his/her job as there is no need to worry thinking about the time they want to wait for the treatment on the NHS, or suffering undue pain, or for a diagnosis.

Group health insurance plan offers several valuable benefits for an employee. The main advantage of becoming a member of the group health insurance scheme is that the insured doesn’t have to pay large premiums for taking a private health insurance plan. The employee can work without being worried of their health as he/she will surely get quality medical help immediately if needed.

There are several health insurance companies offering group health insurance schemes. Most of the health insurance companies, as part of their Group Health Insurance Plan, provide the insured (the employees of the company) to take a ‘health check’ once in every year at any private hospital with which the company has tie-up. The health checks will cover a complete check up, which include height, levels of fitness, weight, blood tests, blood pressure. The health checks are done so as to check whether the insured employee is in a good health or to find out a so far undiagnosed condition. What ever be the purpose, the health check is considered to be beneficial for the employee and the employer.

For those individuals who are not a member of the group health insurance scheme has to pay about $150 upwards to perform a complete health check. Hence this is considered as an added advantage for those who are in the group health insurance scheme. Group health insurance also helps to boost the morale of the staffs as they will know that their employer is providing special care about his employees.

Group health insurance schemes will differ from one insurance provider to another. The insurance coverage will also change according to the schemes you select. But there are certain factors which all the group health insurance schemes will cover for:

- In-patient and day-patient treatment - Out patient treatments such as physiotherapy - Free Help lines such as a GP Helpline and Stress Counseling Helpline. - Specialist consultations after getting a referral from the employee’s GP

Group health insurance policy differs from one insurance company to another. It is always advisable to compare different insurance companies before selecting a group insurance policy. Select the one which suits your company

Cheap Insurance - Ten Tips

Cheap insurance? Auto insurance, life insurance, health insurance, liability insurance - whatever type of insurance you need, you can buy it for less. Try the following:

1. Raise you deductible. Why have a $100 deductible if a $1000 deductible won't break you? It may hurt to pay the first thousand someday, but what if meanwhile you saved several thousand? High deductibles mean lower rates. Of course, get quotes with various deductibles, to be sure you're saving enough for the higher risk.

2. Lower your coverage. Insurance agents secretly admit that people usually get sued according to policy limits. You'll be sued for more if your limit is a million than if it's a hundred thousand. A judgement beyond the policy limits is a scary thought, but this can happen no matter what your limits are. If you don't have many assets or much money in the bank, consider lowering your coverage to save money. Get quotes first, of course, to see how much you'll save.

3. Lower the insurance company's risk. Using seatbelts, not smoking, and having alarm systems can mean cheap insurance. Ask your agent about any discounts that are available.

4. Use an independent agent. Why limit yourself to one insurance company? Independents can show you the cheapest policy regardless of which company it's from. Just check a rating service to see if the issuing company is financially solid, especially when buying life insurance.

5. Drop your insurance. The insurance companies will hate me for this one, but consider eliminating some coverages. You need liability coverage on your car, but collision coverage on a $2000 car doesn't make sense. Invest the money elsewhere, and take the $2000 loss once or twice in your life, or maybe never.

6. Buy stocks instead of insurance. If you and your wife both have good incomes, it probably makes more sense to invest your money than to buy life insurance. If loved ones have enough income or assets, life insurance premiums are usually wasted money.

7. Get rebates. Some states that allows "rebating". California law, for example, allows agents to rebate part of their commission to you. If you live in a non-rebating stae, find a California company online!

8. Get the legal minimums. If you have no assets to protect, ask for state-mandated minimums on auto liability policies. Most companies give you their higher, more expensive "company minimums" if you don't push the point.

9. Review your policies. It is common for parents to still pay for health insurance coverage on adult children long after they are working and have their own coverage. See what other unecessary coverages you may be paying for.

10. Get several quotes. For cheap insurance, compare quotes from several companies, and ask about different policy options. One more thing: take notes.

Disaster decision - Do you need insurance?

The expenses involved with owning a home can be overwhelming at times - routine maintenance, repairs, seasonal preparations, improvements. Not to mention taxes, fees, and all those monthly bills. Some homeowners, in trying to reduce their expenses, wonder if they really need disaster insurance.

Disaster insurance is typically defined as additional homeowner's insurance to cover events like hurricanes, tornadoes, earthquakes, and floods. Home insurance policies typically cover hurricanes and tornadoes (review your policy to be certain in covers damage from such events). But often damage from floods and earthquakes isn't covered. This extra insurance, if desired, must be purchased in addition to your standard homeowner policy, and it can be expensive, depending on where you live.

Because disaster insurance can be expensive, it's a type of coverage some homeowners opt not to buy. But in some cases they are required to buy. For example, mortgaged homes in the US that are located in designated flood hazard areas are required to buy flood insurance through the US National Flood Insurance Program. Of course, once those mortgages are paid, there is no longer a requirement to buy such insurance. But homeowners in those areas should carefully consider whether they really want to take the risk that their home and everything in it could be swept away, leaving them with nothing but an empty lot. Homeowners that aren't in designated flood hazard areas should still know that floods can cause plumbing problems, like sewer and septic backups. These often aren't covered in a standard homeowner's policy, and they may want to consider an endorsement for coverage.

In the US, many tend to think that only the area along the west coast is subject to earthquakes. This isn't true however, and 39 US states have some potential for earthquakes. Coverage for seismic events can be very expensive in California and other western states, but homeowners in other states should evaluate the cost vs. the earthquake risk for the area where they live.

Forex Market Summary

U.S. Dollar Trading (USD) in what was quiet data day, the Greenback trading in a range against a number of majors. In U.S. share markets, the NASDAQ was down -15.60 points (-0.67%) whilst the Dow Jones was also down by -10.99 pts (-0.09%). Crude oil broke level of US$100 a barrel last night, rising by US$4.51. Looking ahead key data in the form of Core CPI (Forecast: 0.2%; Prior: 0.2%) and Housing Starts (Forecast: 1015K; Prior: 1006K) is out on Wednesday. Although, focus will soon shift to the FOMC minutes of the Jan 30 meeting in which the members voted for a 50bps cut, for any indication of monetary policy outlooks.

The Euro (EUR) gained versus the dollar ECB member Noyer said he 'remains confident' about France's economic situation despite global economic turbulence. Overall the EURUSD traded with a low of 1.4642 and a high of 1.4757 before closing the day at 1.4733 in the New York session.

The Japanese Yen (JPY) once again tracked stock prices as the N225 closed 0.9% higher. The JPY did depreciate against a number of majors all but the Sterling Pound. Overall the USDJPY traded with a low of 107.21 and a high of 108.30 before closing the day at 107.61 in the New York session.

The Sterling (GBP) one of the few currencies that failed to gain versus the dollar as it remains pressured by the U.K. government's plans to nationalize troubled lender Northern Rock Plc and by relatively dovish comments from Bank of England Monetary Policy Committee member Besley yesterday. Overall the GBPUSD traded with a low of 1.9455 and a high of 1.9541 before closing the day at 1.9487 in the New York session.

The Australian Dollar (AUD) was boosted by hawkish RBA minutes during the Asian session, in which it was revealed that the members had considered a 50 bps rate hike, although the decision to increase by 25 bps on the 5th of February was finely balanced. Such statements left the door open for another rate hike as early as march, boosting demand for the AUD. Overall the AUDUSD traded with a low of 0.9135 and a high of 0.9237 before closing the day at 0.9207 in the New York Session

Gold (XAU) rallied on the back of higher energy prices. XAU rose by US$24.50 an ounce to US$930.60.

Easy Forex

Using Other Peoples Info To Increase Your Adsense Cash

Adsense is really making a huge impact on the affiliate marketing industry nowadays. Because of this, weak affiliate merchants have the tendency to die faster than ever and ad networks will be going to lose their customers quickly.

If you are in a losing rather than winning in the affiliate program you are currently into, maybe it is about time to consider going into the Adsense marketing and start earning some real cash.

Google is readily providing well written and highly relevant ads that are closely chosen to match the content on your pages. You do not have to look for them yourselves as the search engine will be the doing the searching for you from other people’s source.

You do not have to spend time in choosing different kind of ads for different pages. And no codes to mess around for different affiliate programs.

You will be able to concentrate on providing good and quality content, as the search engines will be the ones finding the best ads in which to put your pages on.

You are still allowed to add Adsense ads even if you already have affiliate links on your site. It is prohibited, however, to imitate the look and feel of the Google ads for your affiliate links.

You can filter up to 200 URLs. That gives you a chance to block ads for the sites that do not meet your guidelines. You can also block competitors. Though it is unavoidable that Adsense may be competing for some space on web sites that all other revenues are sharing.

Owners of small sites are allowed to plug a bit of a code into their sites and instantly have relevant text ads that appeal to your visitors appear instantly into your pages. If you own many sites, you only need to apply once. It makes up for having to apply to many affiliate programs.

The only way to know how much you are already earning is to try and see. If you want out, all you have to do is remove the code from your site.

The payment rates can vary extremely. The payment you will be receiving per click depends on how much advertisers are paying per click to advertise with the use of the AdWords. Advertisers can pay as little as 5 cents and as high as $10-12, sometimes even more than that too. You are earning a share of that money generated.

If your results remain stagnant, it can help if you try and build simple and uncluttered pages so that the ads can catch the visitor’s eyes more. It sometimes pay to differ from the usual things that people are doing already. It is also a refreshing sight for your visitor once they see something different for a change.

Publishers also have the option of choosing to have their ads displayed only on a certain site or sites. It is also allowed to have them displayed on a large network of sites. The choice would be depending on what you think will work best for your advantage.

To get an idea if some Adsense ads you see on the search engines has your pages, try to find web pages that have similar material to the content you are planning to create and look up their Adsense ads.

It is important to note that you cannot choose certain topics only. If you do this, search engines will not place Adsense ads on your site and you will be missing out a great opportunity in making hundreds and even thousands of dollars cash.

It is still wise to look at other people’s information and format your Adsense there. Just think about it as doing yourself a favor by not having to work too hard to know what content to have.

Topic to be avoided includes gambling, firearms, ammunition, tobacco or drugs. If you are being offered more cash in exchange of doing Adsense with these kinds, it is just like signing your own termination paper.

With all the information that people need in your hands already, all you have to do is turn them as your profits. It all boils down to a gain and gain situation both for the content site owners and the webmasters or publishers.

Make other people’s matter your own and starting earning some extra cash.