Get Markets Right

Central bank rates – One cut more from ECB in April and we are there.

US Federal Reserve Bank: Now Fed is at 0 – 0,25%. Next step is intervention in Treasuries. Fuelling money supply……

Bank of England: Now at 1,00% with a good chance that they cut again. 

European Central Bank: Next cut is in April to 1,00% from the current 1,50%.

Bank of Japan: 0,10% – that was it.

Below you will find my weekly view on the very challenging financial markets.

The week has been extremly busy and then I caused some technical problems – all in all it gave some days delay with I apologise for. Probably also causing some text problems this week, not always so easy J

Read more about all the interesting happenings in the financial markets in the 4 entries here below. I hope you find it interesting to read my private view about the consequences for the stock markets, currencies, China and what to expect from the central banks.

The 4 entries from today are:

Currency markets – The Greenback is the key again

Equities – Realistic risk conversations would help the market.

China – Wen…

Currency markets – Escaping everything.

Non major currencies

This week I start with a thought in general regarding a couple of non major currencies. The very significant

drop in some currencies like Swedish Crowns or Polish Zlothy now leads to growing sign of goods arbitrage.

It now pays of for private household to spend time and transportation costs to shop in these countries. If you

remember back when the ERM blew up in the 90’s and the Italian Lira dropped like a stone, we had the same

picture with private households importing everything from Italy.

Currencies like SEK and PLN might be able to drop another 10%, but it starts to seem excessive. Should it

be excessive, then the only two short term ways to compensate will…

Equities – The storm reaches new highs but the ship has less and less water under the keel.

Nikkei 225 (7.376) Topix (722) Dax (3.923) FTSE 100 (3.697) Dow Jones (6.926) S&P 500 (720)

Nasdaq Comp (1.358)

Despite some relief these days, the big picture is still “serious storm”.

The target in S&P 500 at 656 was nearly reached at an intraday low of 666 Monday this week. The sell off

during the last 2 weeks might have been too fast, but I take it as a clear sign of a sentiment change among

some investors. Occasionally I have mentioned, that buying stocks since January would be a bet on an early

ending of the global economic crisis.

It’s getting clear for many people that 2009 unfortunately…

China – Expectations beats reality

Hang Seng (11.931) Shanghai B (140,00) USD/CNY (6,8350)

Last week the yearly National People’s Congress (NPC) took place. Broadly covered by many news

agencies, but I of course highlight what I think is interesting for the market. Primarily the comments made in

connection with the NPC.

To be very honest, the congress didn’t bring much new apart from macro economic pep talk. That the

Communist Party didn’t had much new to offer probably was the biggest surprise for many domestic

investors.

Just one thing should be noted. The Director for the National Development and Reform Commission Mr.

Zhang Ping announced that the large 4 trillion Yuan stimulus package will be adjusted. Infrastructure

investments will be cut by 300 billion Yuan. Technology projects get an…

Central bank rates – ECB cuts again in April

US Federal Reserve Bank: Now Fed is at 0 – 0,25%. Next step is intervention in Treasuries. Fuelling money supply……

Bank of England: Another cut last week, now at 0,50% with a good chance that they cut again. These guys are desperate… 

European Central Bank: We got the expected cut and next cut is when spring comes in April – down to 1,00% from the current 1,50%.

Bank of Japan: 0,10% – that was it.

They will be posted tomorrow Thursday.

Technical problems for a couple of days – apologise.

Best regards

Peter

Below you will find my weekly view on the very challenging financial markets.

Read more about all the interesting happenings in the financial markets in the 4 entries here below. I hope you find it interesting to read my private view about the consequences for the stock markets, currencies, China and what to expect from the central banks.

The 4 entries from today are:

Currency markets – The Greenback is the key again

Equities – Realistic risk conversations would help the market.

China – Wen thinks its ok, or does he?

Central bank rates – they give it another try at ECB……

Currency markets – The Greenback is the key again

EUR/USD (1,2600): Today (Monday) the Dollar index reached it’s 3 years high. It corresponds extreme well with the trading pattern during the large equity sell off in October/November last year. Partly flight to quality and some hot money from China find their way to the greenback, but as the stock markets are setting new lows, investors are also forced to exit hedge funds. Hedge funds primarily are USD based so they need USD cash to pay out.

As mentioned the last couple of weeks, one would expect the Central- and Eastern European crisis to hit the Euro. That is still a risk (or opportunity) and this risk might even grow during the…

Equities – Realistic risk conversations would help the market.

Nikkei 225 (7.280)  Topix (735)  Dax (3.719)  FTSE 100 (3.665) Dow Jones (7.063)  S&P 500 (735) Nasdaq Comp (1.378)  

How to start the equity comments this week…..The DAX target at 3.906 was reached. It’s just to follow up on the targets and not to flag that I was lucky to be right. The new target is by the way 3.075.

Back in October/November last year when I calculated the next and lower target for S & P to be at 656, the world was different despite the steep sell off at that time as well. At that time I used the total expected earning for S & P 500 for 2009, a…