Governor Bollard from the RBNZ stated last night that they do not anticipate ‘hiking interest rates until mid-year’. With the SNB this morning, the market will be focusing on their policy on FX intervention in EUR/CHF. Economic indications and inflation forecasts ‘did not require’ the sort of intervention that surprised and upset the markets last year. There is no doubt it, Hillenbrand ‘does not want to see a strong CHF’.

The market has been grasping at straws with little data to use as fodder, especially in the North American trading sessions. Risk-on, risk-off has been moving on hearsay. China may decouple the Yuan from the dollar, the Greek’s have Obama’s support and equity markets rallying on ‘air’ with little volume. Opposing arguments against a stronger EUR are mounting. Rating agencies are questioning the possibility of a European sovereign default.

Few seem convinced about the Euro-zone escaping further repercussions. Even leaders and policy makers disagree on ‘the positive actions’ to be taken. Greece, technically, could be the smallest of all of the European economies problems, as other members begin to impose their own self-austerity plans. ‘Loose lips’ yesterday by the Greek’s PM has investors questioning the value of the EUR. The market needs a distraction, and seems to be shifting towards the Yuan ‘potential’ revalue.

Monday, March 8, 2010
U.S. equity markets are expected to open better this morning due to a pick-up in demand for higher yielding assets. Investors are also feeling more confident in the long side

following last Friday’s better than expected Non-Farm Payrolls Report. The lack of fresh major economic news until at least Thursday could keep the indices on course for further upside action. The

daily March E-mini S&P 500 chart indicates the possibility of a rally to 1156.00 by March 12th.
June Treasury Bonds are expected to be under pressure today.

Let’s face it there are too many distorting signals in the market right now. We have Juncker stating that ‘Greece will not be left alone’. However, Papandreou still has to convince both Merkel and Sarkozy over the next few days of Greeks austerity concerns and plans. We have the BOJ contemplating easing their monetary policy again. The Chinese Premier Wen ‘warned of latent risk in their banks and pledged to crack down on property speculation’.