Fisher: U.S. Economic Recovery Does not Need Help Fed

Richard Fisher. (source:wsj)

On the occasion of his speech in Frankfurt, Germany, the Dallas Fed President Richard Fisher, said that the U.S. economic recovery is gaining momentum and no longer needs help from the Fed.

"The assistance from the Fed is enough, and if excessive then we must stop it. I think additional accommodation is required after June, "said Fisher.

U.S. approach as opposed to increasing the potential rate hike by the ECB and the BoE.

Meanwhile in Japan, the Tokyo Stock Exchange surged more than 4% amid preaching recovery nuclear reactor destroyed by an earthquake. Toshiba's stock soared 12.8% after the Nikkei newspaper wrote the company will provide dividends for the first time in three years.

Tokyo financial markets reopened after the long holiday weekend, the yen rose despite trading below the record highs before the seven world central bank intervention first time since 2000, the estimated range of $ 30-35 billion.



Meanwhile, U.S. stocks closed down in late trading Wednesday (23/03) morning before GMT, after trading in a narrow range, as investors who take a break for a moment from a 3-day rally amid rising oil prices and continued unrest in Libya and the Middle East.

Investors seemed to take a rest after a long rally for 3 days has returned the decline due to successive disasters in Japan.

Caterpillar analyst meetings, annual meetings of Disney, HP and Starbucks; mortgage applications, new home sales, oil inventories, and earnings reports from General Mills will be on the agenda of the U.S. economy published today.


Gold Flat, On the Range of $ 1.426

Gold dipedagangkan flat near the level of $ 1.426 on Tuesday (03/22) anxiety over rising interest rates kept investors to break for a while, but the air attack on Libya and the increasing political tensions in other Arab countries to encourage demand for safe-haven demand.

Gold trim its gains, following the weakening of the euro, but gold is still near record highs.

Dollar lay near 15-month lows against some currencies in the expectation of rising European interest rates next month.

Weakening in the dollar gold give benefit, but high interest rates can depress gold position that did not yield when compared to ownership interests other.

In our opinion, the gold rally is break and consolidation, partly due to expectations of higher interest rates in Europe, tightening in China, Asia and other countries.

The strengthening of gold also gave a boost to commodity prices of other metals such as silver, which rose by 2.7% to 36.001 dollars per troy ounce, palladium rose 1.5% to 742.3 dollars per troy ounce and platinum rose 1.2% to 1744.9 dollars per troy ounce.

Anxiety Middle East Continue Raising Oil Prices

The price of oil futures turned positive on Tuesday and crude oil in the U.S. rose more than $ 1 as investors are still reluctant to sell at the market, given the dissension in Libya and unrest in Yemen.

The weakening dollar also contributed to strengthening oil prices, said analysts and brokers. Expiration of futures oil contract U.S. in April on Tuesday also add volatility.

The trading volume below average, following the trend lately. Later on Tuesday, the industry group American Petroleum Institute will announce inventory statistics last week, followed by data U.S. government from EIA on Wednesday.

We estimate that U.S. oil inventory report, which will be published tonight, will show a decrease in inventories of gasoline and oil distillation results, which will push the price of oil products.


Ireland Euro Banking Worries

Euro gains against the greenback yesterday deleting, on speculation investors that Irish banks will have difficulty in pay its debts, which makes the Irish government bond yield 2-year tenor and outcome of Ireland to the level of 10%, but expectations of euro zone rate hike next month, potentially limiting the Euro a deeper correction.

Euro-zone inflation outlook has not changed since the ECB meeting last month even though there is greater uncertainty after Japan's nuclear crisis, according to ECB monetary board member Juergen Stark.

Stark is a senior ECB sinyalkan another rate hike in April. ECB President Jean-Claude Trichet pointed out yesterday the central bank does not revise a statement released March 3 last. ECB's Mersch and the ECB's Gugerell also see an urgent need.

Stark saw the risk of rising inflation which could trigger further wage increases. "The central bank must prevent this happening," said Stark. Japan's nuclear crisis and geopolitical tension in the Middle East and North Afrca have increased the uncertainty of global growth. Japan's crisis could trigger a global commodity price increases, as Japan may replace nuclear power with other energy alternatives. "

In our opinion, inflation remains a concern in the European region. ECB may be pursuing a policy of normalization of monetary policy by raising interest rates as economic instability and global financial markets.

Only data Industrial New Orders m / m, Belgium NBB Business Climate and Consumer Confidence releases economic agenda of the European region today.


Poundsterling Soar Post CPI

Pound trading ended on Tuesday (22/03) is generally observed to indicate the movement tends to strengthen against the U.S. dollar.

Pound sterling continued its dominance and scored the highest level of new 14-month against the U.S. dollar weakened broadly on Tuesday (22/03), after a data showed that UK inflation rate
faster than expected, prompting investors again increased expectations of UK interest rate hikes.

We estimate that the pound was still more likely to continue its rally toward $ 1.65 if the minutes from the last meeting of the Bank of England, which will be released Wednesday, shows views of a more hawkish policy makers.

In our opinion, market anticipation of the BoE rate hike expectations will toss Sterling considering settlement was in the related events in Japan and the Middle East.

The Cable has the potential to collect about 3 cents in the last 3 sessions, and still likely to rise to $ 1.65. Sterling still tend to strengthen in the next few weeks.

Meanwhile, reports from the Office for National Statistics showed consumer price inflation rate jumped more than two BoE target times compared to 4.4% in February, from 4.0% in January.

Only MPC Meeting Minutes, BBA Mortgage Approvals and Annual Budget Release into the economic agenda of the UK region today.



Moving Stronger Yen Limited, Investors Worry Over Action Intervention Continued

U.S. Dollar trading ended on Tuesday (22/03) is generally observed to tend to move a thin weakened due to a correction against the Japanese Yen.

Japanese Yen against the U.S. dollar strengthened thin, inflated by Japanese exporters who buy action against the dollar and euro in Asian stocks this Tuesday, though the reinforcement is expected to be limited due to short-term investors are still worried if it will be intervened again by the G7 group.

The weakening yen restrained, because the threat of BoJ intervention and steps to loosen monetary policy. The central bank has been pumping liquidity observed that reached a record into the banking system yesterday, to resist the strengthening Yen and ensure financial institutions have sufficient liquidity to offset the continued impact of the devastating earthquake that struck the country on 11 March.

Report BoJ Current account balance will rise to ¥ 41.76 trillion (U.S. $ 515.24 billion) yesterday, as a result of the injection of liquidity, the highest since March 31, 2004.

Because of this, in our opinion, the dollar against the Japanese Yen will be relatively stable over the 80.00 level for the time being, even still has the potential to strengthen to levels 82.00. Observed by far the USD / JPY was trading at 80.90 levels.

Negative catalyst for the USD / JPY if re-occurring risk aversion / risk transfer is triggered by the Fukushima Daiichi nuclear power plant problem or conflict allied with Gaddafi.

Based on technical studies, USD / JPY is still potential to rebound to an area of ​​83.30 in the short term, but still required penetration is consistently above the 82.00 area to trigger further bullish momentum. Support at 80.50 - 80.00 - 79.70.

There was no data and economic agenda which will be published from Japan today.


Aussie Surges on Stocks and Commodities

Australian dollar ended trading on Tuesday (03/22) is generally observed relative to strengthen against the U.S. dollar.

Australian dollar touched its highest level in more than a week versus the greenback as the strengthening of Asian stocks and high commodity prices boosted demand for assets that had a higher yield.

Aussie continues to stay above $ 1 per greenback for the second consecutive day following the oil price is still strong survive at high levels after the allied forces to expand their air strikes against Libya.

While the New Zealand dollar also appreciated after the IMF said the country's central bank may need to raise interest rates "relatively quickly" when the economy looks to recover.

In our opinion, the situation in the Middle East has raised the price of gold and oil, which of course lucrative currencies of commodity-linked currency.

Reaction on the trading floor for the attack on Libya over the last few days quite positive, because it raises hopes will soon reach a resolution.

There are no data or economic agenda which releases today from Australia.


On Front Today:

Caterpillar analyst meeting; annual meetings for Disney, HP and Starbucks; mortgage applications, new home sales, oil inventories; before-the-bell earnings from General Mills.