Analysis of world markets

The market is in a fever - traders sell highly remunerative currencies and leave in low income. The statistics of odd-come-shortlies has limited influence.

USD. For the American dollar from week beginning could not be worse. Considering leaving from the big arena at once two largest banks, fact that all statistics of Monday left worse than the forecast already solved nothing. Therefore sense to analyze it I do not see. Today FRS will try to overcome such powerful negative statements, however hardly it will be possible to them for the long period. Though … Market waits for decrease in FRS rate on Tuesday for 0,25 items - to 1,75 % annual. If it does not occur an occasion it will be favourable to buy dollar for euro on traders game at FRS session. Especially if to consider that statistics of Tuesday on states by definition will be worse than the forecast too.

CAD. The Canadian dollar has lost 0,6 % against dollar on Monday after Lehman Brothers Holdings Inc declared the bankruptcy and owing to easing in the commodity markets the Canadian dollar was closed at level C$1.0679 for US dollar in North American session. Currency has reached minimum C$1.0755 or 92,98 cents of the USA in early session, but then was restored. Possibly we will see growth continuation at least to $1.08. Fundamentally economy of Canada is strong. The Prime minister of Canada Harper has declared that the situation in the USA will be reflected in economy of Canada, however while precisely it is not known in what degree. Bank of Canada has declared that «will support liquidity at necessary level for the purpose of the Canadian financial system stability preservationy system and functioning of the financial markets». In the statement Canada Bank also underlines that «welcomes FRS actions the USA on support of the country financial sector. 

JPY. Being in inverse relationship to the American currency Japanese yen at the Asian auctions on Tuesday morning has reached a new two-month maximum against US dollar as falling of the prices in the stock markets has induced investors to reduce contributions to the highly remunerative currencies, placed in Japan. The yen also has reached a 5-day maximum concerning currencies of Europe, Switzerland and Great Britain. Essential influence on it was rendered by that fact that the Japan Bank has added 1,5 billion yens (14,4 billion dollars) in a financial system in the light of gamble that the Federal Reserve will lower interest rates today after Lehman Brothers Holdings Inc declared the bankruptcy. BUT yen by definition is weak currency last weeks and this tendency is saved. The index of consumers trust in Japan has fallen to a record minimum in August, according to the government report. The index of consumers moods for all households has fallen to 30,1 points in August in Japan with 31,4 in July - a minimum level since June, 1982. Index decreases the fifth month successively. The general households which consist of two and more persons, and value of an index below 50 points, speaks about a pessimistic spirit. 

EUR. Globally risks on euro remain considerable, however in the light of latest developments its strengthening is inevitable. Euro is the currency second for the importance in the world. Falling (dollar) by the first automatically strengthens value of the second, is not dependent on macrostatistics from EU. By the way, last is not too bad, as for example across England and Japan. Yesterday it became known that annual rates of wages increase in 15 eurozone countries in II quarter were considerably slowed down in comparison with I quarter. Delay of the salary growth should become good news to the European central bank/ECB / which is afraid that workers will demand increase of wages for high prices indemnification for energy carriers and a foodstuff. In I quarter annual rates of wages increase have made 3,5 %. In II quarter 2007 wages have grown on 2,8 %, and in I quarter 2007 - on 3,7 %. In 27 European Union countries expenses on a payment have grown on 3,4 % on comparison with II quarter 2007 whereas salaries have grown on 3,6 %. The head of the Central Bank in the light of accruing threats also has been compelled to support euro. The president of the European Central Bank, Jean Claude Trishe has declared that price stability achievement will allow to stabilise conditions in the financial markets. ECB still intend to supervise price fluctuations rigidly. 

GBP. According to the head of the British bankers association, the Great Britain bank sector, in comparison with similar American branch, “is live and healthy”. After crash of investment giant Lehman Brothers, sale Merrill Lynch, crisis of two largest hypothecary brokers, the bank system of Great Britain shows remarkable firmness. It is connected by that the country already some time lives in a crisis condition. British association of business heads became today last group which officially declared recession expectation in Great Britain. Members of the specified group expect economic recession in the British economy which however will be short. Earlier, the Confederation of the British industrialists (CBI) has published the forecast of decrease in gross domestic product in the third quarter on 0.2 %, and on 0.1 % in the fourth quarter. OEDP has reduced the forecast of annual economy growth to 1.1 % against the forecast of growth for 1.7 %. The second quarter published in the beginning.“ Having tested sharp delay in first half of this year, the Great Britain economy was included into a phase of moderate decrease which will last not long ”, - director CBI, Richard Lambert has informed. 

AUD. The Australian dollar has fallen to a new year minimum on Tuesday. It has fallen below level of $0.7900 against US dollar as investors have thrown out on the market have sold highly remunerative currencies because of the troubles called by excitements in the USA financial sector. The Australian dollar also has fallen to a two-year minimum against yen, having reached level of 82,17 yens, a minimum since March 2006. On Tuesday the Central Bank of Australia has declared that it has lowered interest rates this month to avoid sharp economic delay, though the policy still should remain constraining some time to cope maximum for 17 years with inflation. The report of monthly political meeting of Australia Reserve Bank from September, 2nd has shown that in economy contradictory forces operate: on the one hand heavy financial conditions press on consumer expenditure and confidence, with another - strong demand for the Australian resources strengthens business investments and incomes. There was a danger of decrease in rates too early, allowed inflation to reach 4,4 % while target level are 2 %, and will pass some time while it will be slowed down. «Anyway, there was also a danger wait too long» - is told in the report, - «In this case demand could fall more sharply, than it is necessary. It would reduce inflation, but for the big economic price» faster. Eventually, the Central Bank has decided to reduce percentage rates by 25 basic points to 7 %. However, report rates that high inflation will not allow to lower interest rates too quickly. Earlier this week investors did not assume that the Central Bank will reduce again rates in October. However, excitements in the global financial markets on Monday in connection with wreck Lehman Brothers, have moved the market to the next decrease in rates on 25 points in October 

CHF. Against an approaching collapse of the USA financial system Switzerland statistic on Monday looked especially impressively. The Price index of manufacturers and the prices for import in Switzerland have grown for a year, but concerning the last month have decreased, assuming that the rise in prices has reached the maximum in the middle of the year. The price index of manufacturers and the prices for import in August has grown on 4,0 % y/y, but has fallen to 0,5 % m/m. The bank of Switzerland has noted the minimum influence of the USA crisis however has noticed that «the Bank steadfastly watches a situation in the market». Threats for Swiss  stability franc minimum, however flight in this currency of traders will lead to volatility growth.