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The Eurozone CPI-estimate rose to 3.5%, its highest level in 16 years. Record food and energy costs are driving inflation as companies are having to pass on increased costs to consumers
Fundamental Headlines
• NZDUSD – New Zealand business confidence fell to -57.9 from -43.9 in February, a 17 year low. Record high interest rates and a possible global slowdown have started to weigh on managers. Companies are reigning in their hiring and investment, which will likely signal the end of the country’s recent boom period. The RBNZ will have to start to weigh their effort to battle inflation against the prospects of declining growth in future rate decisions. For more news and resources please visit our New Zealand Dollar Currency Room.
• USDJPY – A U.S. slowdown has led to Japanese manufacturers lowering production for a second month, as total output fell 1.2%. Meanwhile, Japanese wages rose for a second month climbing 1.3% from a year earlier. The country will need strong consumer spending as demand from emerging markets is expected to decline as the U.S. slides closer to a recession. Speculation is increasing that the BoJ may lower rates by year’s end to soften the blow. For more news and resources please visit our Japanese Yen Currency Room.
• EURUSD – The Eurozone CPI-estimate rose to 3.5%, its highest level in 16 years. Record food and energy costs are driving inflation as companies are having to pass on increased costs to consumers. A separate report showed business confidence falling to 99.6 from 100.2 in February. As inflation continues to erode consumer’s purchasing power, the prospect grow dimmer for future growth. The ECB remains in a difficult position as they continue to battle rising inflation, while growth outlook deteriorates. Discuss the topic and your trade ideas in the EUR/USD Forum.
Sources:
• Paulson Plan Begins Battle On How To Police Market – Wall Street Journal
• HUD Secretary Expected To Quit – Wall Street Journal
• Bush and Brown In Push To Deal With Crisis – Financial Times
• Trichet, King May Support Fed As Ammunition Runs Low – Bloomberg
• M&A Bankers Suffer 35% Drop in Fees as Deals Dry Up From Record – Bloomberg
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Posted on Apr-01-2008
