Mexico's Private Consumption Fell 1.3% On Year In 4Q - Inegi

Private household consumption in Mexico fell in the fourth quarter of 2008 for the first time in more than five years as the economy turned negative and credit became harder to come by. The National Statistics Institute, or Inegi, said Friday that private consumption fell 1.3% from the fourth quarter of 2007 - its first year-on-year decline since the second quarter of 2003. Aggregate demand in the fourth quarter fell 3.2% from a year earlier, with the drop in private consumption and an 8.8% decline in exports partially offset by a 0.1% increase in government consumption and a 0.6% increase in fixed investment. Robust domestic consumption had been sustaining growth in the economy thanks in part to several years of solid credit expansion. Banks began to cut back on consumer lending last year, however, as the rate of nonperforming credit card loans increased. For the full year, private household consumption rose 1.5%. Gross domestic product fell 1.6% in the fourth quarter, and is also expected to contract this year as a result of the U.S. recession and weak domestic demand.

Hungary PM Proposes Setting Up New Government With New PM

Hungarian Prime Minister Ferenc Gyurcsany unexpectedly proposed to his Socialist Party on Saturday that they set up a new government headed by a new premier. The Prime Minister unveiled his proposal at a two-day Socialist Party Congress that started Saturday. Gyurcsany's minority Socialist government has faced street protests for years while it struggled to implement fiscal measures. Gyurcsany also proposed to the Socialist Party Congress that they hold an extraordinary congress in two weeks' time and name a new prime minister. State new agency MTI said Saturday that Gyurcsany is planning to call a no confidence vote against his government. Local news portal index.hu said that Gyurcsany offered his resignation to the leadership of the Socialist Party earlier Saturday, saying that his stepping aside may lead to a more efficient crisis management and reform process was necessary. In a speech delivered to the Socialist Party Congress, Gyurcsany admitted to having made several mistakes in his recent years as head of government and said his credibility had been severely marred by these mistakes. The unexpected resignation of Gyurcsany comes at a time when the government's popular support hit an all-time low and the country is facing an economic contraction this year. Gyurcsany's move is likely to shake domestic financial markets, which have been under selling pressure since October 2008, when the global financial crisis hit Hungary severely. The government was forced to secure a $25 billion credit facility from the International Monetary Fund, the World Bank and the European Union to secure the country's financing. Gyurcsany stressed that the government should continue the reform process.

UPDATE: Hungary PM Gyurcsany Calls For New Government, New Premier

Battered Hungarian Prime Minister Ferenc Gyurcsany unexpectedly tendered his resignation Saturday calling on his Socialist Party to set up a new cabinet headed by a new premier so that the necessary reform process can be carried out with wider support. "If I'm the obstacle to change, then I'll eliminate this obstacle," Gyurcsany said at a conference of the ruling Socialist Party. The Socialists, who govern in minority, will hold an extraordinary party congress April 5 when they'll name their new prime minister candidate, Socialist Member of Parliament Monika Lamperth said Saturday. Gyurcsany proposed that the Socialists inform parliament about his decision Monday and that they start negotiations regarding the person of the new prime minister. The Socialists "have scenarios for (naming) a new prime from either within the party or from the outside," state news service MTI quoted Socialist Parliamentary Caucus Leader Ildiko Lendvai said Saturday. MTI said Gyurcsany wants to call a no-confidence vote in Parliament against himself and his cabinet, but the agency didn't name sources. Under Hungarian legislation, one-fifth of MPs have to back a no-confidence vote and they also have to name their candidate for the prime ministerial post. If the majority of Parliament express their lack of confidence in the prime minister, the proposed premier automatically becomes the new head of government. Gyurcsany's minority Socialist government has faced street protests for years while it struggled to implement fiscal measures. "I hear messages that I'm the reason why there isn't sufficient social coherence, a stable governing majority and a sober opposition," Gyurcsany said in a speech. Gyurcsany, who was the first prime minister to be reelected to the post since Hungary's return to democracy in 1990, admitted to having made several mistakes in his recent years as head of government and said his credibility had been severely marred by these mistakes. "I have been mistaken regarding our power and our possibilities, in moments of great importance I've failed to speak up clearly, my credibility has therefore been seriously damaged," the prime minister said. A speech delivered by Gyurcsany to a closed Socialist Party meeting in October 2006 sparked mass protests in Hungary as the prime minister had admitted his government had lied "night and day." Gyurcsany's and the government's popularity has been on the decline ever since and nose-dived in recent months as the global economic crisis hit Hungary in full force. In a poll published earlier this week by pollster Median, 91% of Hungarians said that the country was headed in the wrong direction. Hungary has entered an economic recession in the last quarter of 2008 and the government projects this year's economic contraction at 3-3.5% while analysts believe the recession could be as deep as 4-5%. Gyurcsany's move is likely to shake domestic financial markets, which have been under selling pressure since October 2008, when the global financial crisis hit Hungary severely. The government was forced to secure a $25 billion credit facility from the International Monetary Fund, the World Bank and the European Union to secure the country's financing. In his speech Saturday, Gyurcsany stressed that the government should continue the reform process.

Venezuela Santander Unit Costs Less Than Yr Ago -Chavez

The Venezuelan unit of Spanish giant Grupo Santander, which the government plans to nationalize, costs less than it did a year ago, President Hugo Chavez said Saturday. "Don't think that it costs the same than a year ago" Chavez said in nationwide television address.

Venezuela Reduces 09 Budget Spending Plans By 6.7% -Chavez

President Hugo Chavez revealed his plans to adapt his spending projects to the decline in state revenue triggered by the collapse in the price of oil and the global economic slowdown. Venezuela will lower its oil price forecast to $40 per barrel from $60 per barrel, which is used to calculate its 2009 budget, Chavez said. The government will also reduce its 2009 budget by 6.7%, shrinking it to 156.4 billion bolivars ($72.7 billion). The measures are geared "to confront a great threat that originates in the economic model defended by the national bourgeois," Chavez said before unveiling the measures Saturday during a countrywide television address. The president staunchly defended his government's socialist-inspired agenda and pledged that the plan would "protect what we've been achieving."

Venezuela Reduces 09 Budget Spending Plans By 6.7% -Chavez

President Hugo Chavez revealed his plans to adapt his spending projects to the decline in state revenue triggered by the collapse in the price of oil and the global economic slowdown. Venezuela will lower its oil price forecast to $40 per barrel from $60 per barrel, which is used to calculate its 2009 budget, Chavez said. The government will also reduce its 2009 budget by 6.7%, shrinking it to 156.4 billion bolivars ($72.7 billion). The measures are geared "to confront a great threat that originates in the economic model defended by the national bourgeois," Chavez said before unveiling the measures Saturday during a countrywide television address. The president staunchly defended his government's socialist-inspired agenda and pledged that the plan would "protect what we've been achieving."

Venezuela To Increase Value-Added Tax To 12% From 9% -Chavez

Venezuela will increase its value-added tax and almost triple its domestic debt issue plans to counteract a drop in the price of oil that is squeezing the government's finances. President Hugo Chavez said Saturday in a countrywide television broadcast that the government will increase the value-added tax to 12% from the current 9%. The government will also almost triple its domestic debt issue plans to 34 billion bolivars ($15.8 billion) from the previous forecast of VEB12 billion. Chavez ruled out devaluing the currency, which is pegged to the dollar at rate of 2.15 bolivars. He also said that he won't increase the price of gas, which is among the cheapest in the world. Venezuela will lower its oil price forecast to $40 per barrel from $60 per barrel, which is used to calculate its 2009 budget, Chavez said. The government will also reduce its 2009 budget by 6.7%, shrinking it to 156.4 billion bolivars ($72.7 billion). The measures are geared "to confront a great threat that originates in the economic model defended by the national bourgeois," Chavez said before unveiling the measures Saturday during a countrywide television address. The president staunchly defended his government's socialist-inspired agenda and pledged that the plan would "protect what we've been achieving."

UPDATE: Venezuela Hikes Taxes, Debt Plan As Oil Income Drops

Venezuela will hike taxes and issue more debt to deal with a collapse in the price of oil that is squeezing the government's finances and threatening the socialist agenda of President Hugo Chavez. The value-added tax will increase to 12% from the current 9% and the government will almost triple its domestic debt issue plans for 2009 to 34 billion bolivars ($15.8 billion) from the previous forecast of VEB12 billion. The measures are geared "to confront a great threat that originates in the economic model defended by the national bourgeois," Chavez said Saturday in countrywide television broadcast before unveiling the economic package. The president staunchly defended his government's socialist-inspired agenda and pledged that he would "protect what we've been achieving" as he listed scores of social projects which are behind a massive jump in public spending in recent years. The announcements will help Chavez offset the decline in the price of oil, but are sure to spawn new inflationary forces in a country that is already suffering the highest official price increases in the region. The president also ruled out a currency devaluation or increasing the price of gas, measures that some economists speculated were on the table. Fears of a devaluation pushed the dollar in the parallel market, where Venezuelans buy U.S. currency if they are turned down by the government, to VEB6.2 on Friday. Instead Chavez adjusted the government's oil forecast to $40 per barrel, down from the previous $60 per barrel estimate, which was used to draft the budget. The budget will be cut by 6.7%, shrinking it to VEB156 billion ($72.7 billion.) The government will also increase the minimum wage by 20%, divided in two 10% hikes later on this year. The boost is still well below last year's inflation rate, which closed at 32%. The announcements may not be enough for Venezuela to navigate the decline in the price of oil, which accounts for half of state revenue. "The spending cuts are very modest," said Tamara Herrera, an economist with Caracas-based research firm Sintesis Financiera. Herrera predicts stagnant economic growth this year and inflation of more than 40%. Despite Chavez's adjustment to the state's official budget, his government may face spending cuts that will go far beyond what was unveiled on Saturday, she said. Over the past few years, state spending has far exceeded budgeted amounts with help from windfall oil revenues, a process that has radically increased the size of government and propelled economic activity. Last year, for instance, total state spending closed at VEB88 billion ($40.9 billion), 37.5% higher than the original VEB64 billion budget for 2008. During his years in office Chavez has shown a penchant for announcing moderate economic measures and leaving more unpopular economic decisions to his ministers or to the state's Official Gazette. Economists have lately argued that the leftist leader could avoid weakening the bolivar if oil prices showed signs of stabilizing. More importantly, however, in recent months it has become a widely-held belief that the government has been selling some of its oil revenue dollars in Venezuela's parallel dollar market. If true this would net the government a higher amount of bolivars per dollar than what it would get from handing foreign currency directly at the fixed exchange rate. Economists say that if oil prices stay at the current level, Chavez will be forced to devalue the currency later on this year to shore up the government's finances. The decline in the price of oil, the economic engine of Venezuela, will likely mean that the economy will contract this year. Barclays Capital predicts a 4.1% contraction this year.

EU's Almunia: EU Doing What Needs To Be Done To Help Econ

The European Union is doing what is needed to help pull its economy out of a deepening recession, European Commissioner for Economic and Monetary Affairs Joaquin Almunia said Sunday. The E.U. has rejected U.S. calls to expand its fiscal stimulus spending. The bloc in December agreed to spend roughly EUR200 billion to aid its economy. The U.S., by contrast, last month established a $787 billion stimulus plan. The E.U. is worried that increased fiscal stimulus will leave its member countries with soaring debt burdens. Under E.U. rules, countries must keep their budget deficits below 3% of gross domestic product. "We cannot afford to spend the next two decades absorbing the debt" from fiscal stimulus spending, Almunia said during a conference in Brussels hosted by the German Marshall Fund of the United States.

ECB's Weber: Crisis Response Can't Prevent Economic Downturn

BRUSSELS -(Dow Jones)- Europe's response to the economic crisis can only mitigate the recession, not prevent it, European Central Bank governing council member Axel Weber said Sunday. Weber defended the ECB's actions, saying criticism that it has been slower to act than the U.S. Federal Reserve and the Bank of England is unjustified. The Federal Reserve and the Bank of England both have trimmed their main interest rates to almost zero, while the ECB's key rate is currently 1.5%. Weber said that with the ECB's main rate at "1.5% and heading down," the central bank has moved appropriately to boost the euro-zone economy.

G20 Summit Won't Halt Econ Downturn - UK Foreign Office Min

LONDON (AFP)--U.K. Foreign Office Minister Mark Malloch-Brown on Sunday played down hopes for next month's Group of 20 developed and developing nations summit in London, saying the downturn "is not going to stop on April 2." Malloch-Brown added that the summit "may not be the moment" when countries announce a fresh stimulus package. In the run-up to the meeting of world leaders, there have been disagreements between the U.S., which wants such a move, and European countries like France and Germany, which are opposed to it. "We are in the midst of a dramatic destruction of global wealth which is not going to stop on April 2," Malloch-Brown told BBC television. "The downward momentum is going to take us way beyond that." He was also asked whether there would be an announcement on an additional, co-ordinated financial boost at the summit. "A lot has been done, a lot is underway, April 2 may not be the moment where countries think it's right to add more to the global (amount)," he said. "There's going to be an announcement of global money but it's not necessarily around the major economies' national boost because we're kind of in mid-course on that". This was an apparent reference to an agreement at a G20 finance ministers' meeting earlier this month to boost International Monetary Fund resources "very substantially." Malloch-Brown said that in the wake of that meeting, the nations involved were close to reaching agreement on a course of future action. "Where we are...is probably 75, 80% of the way there but this last 10 days is very critical," he said. "(There is) a last flurry of effort to get this from good to, we hope, excellent in terms of an outcome...it's hard but not impossible." The G20 summit unites leaders from major developed and emerging economies including the U.S., Japan, China, rich European nations, Mexico, South Korea and Saudi Arabia.

UPDATE: Almunia: EU Doing What Needs To Be Done To Help Econ

BRUSSELS -(Dow Jones)- The European Union is doing what is needed to help pull its economy out of a deepening recession, European Commissioner for Economic and Monetary Affairs Joaquin Almunia said Sunday. The E.U. has rejected U.S. calls to expand its fiscal stimulus spending. The bloc in December agreed to spend roughly EUR200 billion to aid its economy. The U.S., by contrast, last month established a $787 billion stimulus plan. The E.U. is worried that increased fiscal stimulus will leave its member countries with soaring debt burdens. Under E.U. rules, countries must keep their budget deficits below 3% of gross domestic product. "We cannot afford to spend the next two decades absorbing the debt" from fiscal stimulus spending, Almunia said during a conference in Brussels hosted by the German Marshall Fund of the United States. Almunia said revamped financial-market rules are the E.U.'s main priority going into the Group of 20 developed and developing nations summit in London on Alril 2. The U.S. is expected to use this meeting to press countries for more fiscal-stimulus spending.

2nd UPDATE: Almunia: EU Doing What Needs To Be Done For Econ

BRUSSELS -(Dow Jones)- The European Union is doing what is needed to help pull its economy out of a deepening recession, European Commissioner for Economic and Monetary Affairs Joaquin Almunia said Sunday. The E.U. has rejected U.S. calls to expand its fiscal stimulus spending. The bloc in December agreed to spend roughly EUR200 billion to aid its economy. The U.S., by contrast, last month established a $787 billion stimulus plan. The E.U. is worried that increased fiscal stimulus will leave its member countries with soaring debt burdens. Under E.U. rules, countries must keep their budget deficits below 3% of gross domestic product. "We cannot afford to spend the next two decades absorbing the debt" from fiscal stimulus spending, Almunia said during a conference in Brussels hosted by the German Marshall Fund of the United States. Almunia said revamped financial-market rules are the E.U.'s main priority going into the Group of 20 developed and developing nations summit in London on Alril 2. The U.S. is expected to use this meeting to press countries for more fiscal stimulus spending. He said the bloc and the International Monetary Fund will announce "next week" a plan to provide balance-of-payments support to Romania. The E.U. and the IMF have already provided similar assistance to Hungary and Latvia, two states that have been particularly hard hit during the current downturn. Almunia said the euro zone has instruments to help any state struggling financially. "We have the instruments to avoid having this crisis become a default problem," Almunia said, without adding details. European Central Bank governing council member Axel Weber, who appeared alongside Almunia at Sunday's conference, said no euro-zone country faces fiscal sustainability problems. Rumors circulated on Friday that the ECB had created a contingency fund to rescue troubled euro-zone economies, including Ireland and Greece. But E.U. finance ministers and the ECB said Friday that no such fund has been established.

d UPDATE:ECB Weber:Crisis Response Can't Stop Econ Downturn

BRUSSELS -(Dow Jones)- Europe's response to the economic crisis can only mitigate the recession, not prevent it, European Central Bank governing council member Axel Weber said Sunday. Weber defended the ECB's efforts, saying criticism that it has been slower to act than the U.S. Federal Reserve and the Bank of England is unjustified. The Federal Reserve and the Bank of England have both trimmed their main interest rates to almost zero, while the ECB's key rate is currently 1.5%. Weber said that with the ECB's main rate at "1.5% and heading down," the central bank has moved appropriately to boost the euro-zone economy. He declined to discuss details of the ECB's upcoming rate decisions, but repeated an earlier statement that the bank has "room to maneuver." Weber warned that the ECB will act quickly if inflation re-emerges in the euro zone. Inflation topped 4% in the region last summer, prompting the ECB to hold its key rate at 4.25%, while other central banks slashed rates to boost economic activity. Weber echoed ECB President Jean-Claude Trichet's statement that the bank is ready to consider additional measures to help the euro-zone economy. European business groups have asked the ECB to start buying commercial paper, a step the U.S. Federal Reserve first took in October. Weber declined to discuss specific plans, saying only that some "unconventional" ideas are under discussion. Some aspects of the economic downturn are beneficial, particularly after years of excessive consumption, Weber told a conference in Brussels hosted by the German Marshall Fund of the United States. "Part of the reaction we see now in the business cycle is not what we want to correct," he said. Weber noted that savings rates are rising in response to the economic downturn. He said he expects a continued climb in savings rates in the U.S. and the euro zone.

UPDATE: Hungary PM: No Confidence Vote To Be Held April 14

UPDATE: Hungary PM: No Confidence Vote To Be Held April 14 (Adds quotes, details.) BUDAPEST -(Dow Jones)- Hungary's Prime Minister Ferenc Gyurcsany said Sunday that the Hungarian parliament will hold a vote of no confidence against him and his cabinet on April 14 after he unexpectedly announced Saturday his intention to step down. Gyurcsany's Socialist Party will put forward the motion for a no confidence vote on April 6, a day after the party's extraordinary congress, at which the nominee for new prime minister is likely to be revealed. Should the no confidence vote receive a parliamentary majority, the nominee for prime minister will automatically become the new premier. Gyurcsany announced his intention to step down Saturday, saying a new cabinet headed by a new premier will be better equipped to lead the country out of the economic crisis. The new government will have to launch further fiscal measures as the international economic crisis appears to be longer and deeper than previously thought, Gyurcsany said at a press conference Sunday. The government now projects that theeconomy will contract by 3%-3.5%, but analysts believe the recession could be much deeper, reaching 4%-5%. "The new government will have to do more...than what had been announced by us Feb. 16," Gyurcsany said. The government unveiled a tax reform package Feb. 16 aimed at reducing labor-related taxes, while hiking value-added tax and certain excise taxes. "We want a new government that has a stable majority and a more comprehensive program," said Gyurcsany, who was re-elected chairman of the ruling Socialist Party Saturday. Gyurcsany indicated that his government, which will remain in place until the new cabinet is sworn in, will launch further fiscal measures until the new cabinet takes over. He also said that his party will start consultations with all parliamentary parties on who to nominate as the new prime minister. "We will be able to reach an agreement on this," Gyurcsany said.

Hungary PM: Econ Could Contract By More Than 3.5% Forecast

Hungary PM: Econ Could Contract By More Than 3.5% Forecast BUDAPEST -(Dow Jones)- Hungary's economy could contract by more than the government's current 3.5% forecast this year, Prime Minister Ferenc Gyurcsany said Sunday, meaning that the country's incoming government will need to launch further austerity measures to keep the budget deficit under the 3% of gross domestic product level. "There is a bigger chance, or rather risk, that the economic recession will be deeper than 3.5%," Gyurcsany said in an interview on national television channel M1. Gyurcsany offered his resignation Saturday, saying a new government headed by a new prime minister will be better authorized to lead the country out of the economic crisis. The government unveiled an economic package Feb. 16 aimed at tackling the economic crisis and keeping the budget deficit on track. However, a deeper recession will hit budget revenues, making more austerity measures unavoidable if the new government wants to keep current fiscal commitments. Gyurcsany was adamant that his resignation from the helm of the minority government is final. "My decision to resign is final ... in a couple of weeks I won't be the prime minister of this country," Gyurcsany said. Earlier Sunday, Gyurcsany said Parliament could elect his successor April 14 via a no confidence vote. When asked about the person of the next prime minister, Gyurcsany said he had a name in mind but refused to unveil the name. He did stress, however, that he would be "very surprised" if former finance minister Lajos Bokros would become the new premier with the backing of the ruling Socialist Party. Besides Bokros, former central bank Governor Gyorgy Suranyi, former Finance Minister Laszlo Bekesi, and current central bank Governor Andras Simor are tipped as possible successors to Gyurcsany by local media. The new prime minister will likely not come from the ranks of the ruling Socialist Party but rather be an independent politician, who would enjoy the backing of the liberal SZDSZ and the conservative MDF, two possible allies for the Socialists in forming the new cabinet. Gyurcsany's comments Sunday that the new government may have members from opposition parties indicate that the Socialist Party, which doesn't have a majority in government, is looking for cooperation with the two smaller opposition parties. Gyurcsany sounded firm Sunday that the new government will have a "stable majority" in Parliament, in which case early elections won't be called. Hungary's next general elections are scheduled for 2010.

Usd for the week ahead

The dollar has suffered the worst week of the year after FED’s plan to revive U.S. economy, yet could be put to trial this week, when Tim Geithner treasury secretary, finally announces the key details of the banking rescue plan this Monday, that would pump $1.15 trillion more into the economy, part of it through buying U.S. Treasury bonds. FED success could halt the spiral towards deflation and at the same time, lead to a slow rebound in stock markets, sending investors to high-yielding and greenback slowly down. Dollar is slightly down compare to pass Friday’s close against major rivals: Euro has reached 1.3635, Gbp 1.4477, Japanese Yen 95.60 while Swiss Franc remains hovering around 1.1240. If any, dollar could gain against Japanese Yen this week, as the Bank of Japan also announced that would increase its buying of government debt to 21.6 trillion yen. The statement announcing the board's decision said economic conditions in Japan have "deteriorated significantly and are likely to continue deteriorating for the time being."

Japan Outlook: MOF Releases Jan-Mar Corp Sentiment Survey

Japan Outlook: MOF Releases Jan-Mar Corp Sentiment Survey TOKYO (Dow Jones)--Here are the major economic events scheduled in Japan on Monday. All times refer to GMT.
INDICATORS
No major indicators are scheduled for release Monday.
-
EVENTS
2350 The Ministry of Finance releases its corporate
sentiment survey for January-March.
0500 Vice Minister of Economy, Trade and Industry Harufumi
Mochizuki holds regular press conference.
0800 Vice Finance Minister Kazuyuki Sugimoto holds regular
press conference.
0800 Financial Services Agency Commissioner Takafumi Sato
holds press conference.
-
CORPORATE EVENTS
N/A Sockets Inc. (3634.TO) begins trading on the Tokyo
Stock Exchange's Mothers market.

Italy Government To Resume Aid Talks With Fashion Leaders Thursday

Italy Government To Resume Aid Talks With Fashion Leaders Thursday ROME -(Dow Jones)- Italy's government will resume talks on Thursday with the nation's fashion leaders regarding financial aid to the sector, a spokeswoman for the ministry told Dow Jones Newswires Wednesday. Industry Minister Claudio Scajola is expected to meet with representatives from the textile and shoe sectors around 1600 GMT in Rome. Scajola was expected to unveil a plan, aimed at preserving some 700,000 jobs, by mid-March, but recent changes to Italian government budget laws now require cabinet approval. A spokesman for Sistema Moda Italiana, a textile and fashion association, said: "We are worried. The situation gets worse, day by day." Italy's fashion industry leaders, who say the sector had sales worth EUR52.5 billion in 2008, have urged the government to safeguard jobs for some 700,000 small-company workers. The fashion industry comprises about 60,000 companies, of which about 90% are classified as small businesses, SMI said previously. In Italy, small companies aren't eligible for subsidized government unemployment funds. Earlier Wednesday, the government said financial resources to help ailing small and medium-sized Italian companies had been raised to EUR1.5 billion from EUR1.3 billion.

FOMC statement hurts the Greenback

FXstreet.com (Barcelona) - Dollar is falling apart across the board after the FED statement. The Federal Reserve said it will buy up to $300 billion in longer-term Treasuries and raise the size of lending programs already aimed at reducing mortgage rates by another $750 billion, a forceful reminder that officials still have powerful tools to combat the recession.Market is watching a very strong greenback weakness, as the FOMC announcement of leaves its interest rate unchanged and to buy treasuries and to increase the MBS program to 1.25 Trillion Dollars should benefit most other assets, boosting risk sentiment. This was definitely a crowd pleaser from the Fed.According Nick Nassad, currency market analyst with CMS Forex, this announcement should benefit most other assets, boosting risk sentiment: "The importance of the Fed's announcement is that by buying Treasuries the Fed will to exert pressure designed to lower rates on the many corporate, mortgage and consumer loans linked to benchmark government debt. That will be positive for increasing money supply and boosting lending."EUR/USD has risen quickly more than 330 pips in the first minutes after the Fed decision of leave unchanged its interest rate at 0.25%. The pair has climbed up from 1.3104 to 1.3436, reaching a fresh eight weeks high.Nick says about EUR "I think there the strength we have been seeing in the EUR/USD had a lot to do with the recent rally in global equities as most traders did not expect this statement to buy treasuries to come out of the today's fed meeting."Cable has risen more than 320 pips from the 1.3944 to 1.4266 and the GBP/USD has reached a new two weeks high. About Cable, Nick says: "The GBP/USD has some more clearer resistance levels from two weeks ago that should limit further gains by the Pound, and as we mentioned the weak unemployment data adds to a sense that the UK economy is still facing a deepening recession."The USD/JPY has fallen around 400 pips from the 98.33 to test the 95.65 support (March 12 low). Japanese yen is close to break the 95.50 zone, momentum is bearish, and if does, more selling pressure could be seen on the pair.Nassad concluded related to JPY: "Japan would prefer to have a weaker currency to help boost exports but seems like 100 acted as strong resistance. We are establishing a downward channel with today's moves reaching the bottom line of support."

CME Forex, Financial Est Futures Volumes - Mar 18

CME Forex, Financial Est Futures Volumes - Mar 18 For today, in contracts. As of 1530 ET.



Currencies Financials
Australian dollar 42,548
Eurodollar 2,017,104
British pound 70,564
Libor 6,358
Brazilian Real 1
Euroyen 0
Canadian dollar 55,141
Euro FX 215,693
Japanese yen 70,335
Mexican Peso 11,598
New Zealand dollar 909
South African Rand 27
Russian Rubble 398
Swiss franc 43,922

razil Real Ends Stronger, Reverses Course On Fed Statement

Brazil Real Ends Stronger, Reverses Course On Fed Statement SAO PAULO (Dow Jones)--The Brazilian real was heading for a weaker close Wednesday, but quickly reversed direction after well-received news from the U.S. Federal Reserve. The real closed at BRL2.252 per dollar on the Brazilian Mercantile and Futures Exchange, or BM&F, compared with BRL2.285 on Tuesday. The real opened weaker in light trade, moving to BRL2.30 to the dollar intraday, it's lowest level on the week. The real quickly gained following well-received comments by the Federal Reserve regarding its planned purchase of $300 billion in U.S. Treasurys and increasing its mortgage-backed securities lending program by another $750 billion. Interest rates were maintained near 0% as expected. Panama and Israel both announced new bond issues Wednesday, providing investors with some notion that risk appetite was back in business. But nothing moved the real more Wednesday than the Fed, analysts said. "If we don't hear any more bad news, then you will see the real go to a new trading range of 2.10 to 2.20 in our view," said Francisco Giminez, a broker at NGO Corretora de Cambio in Sao Paulo. Giminez said much of the real strength at the end of the day was investors selling out of long dollar positions and buying equities or reals on the Fed statement. In credit markets, interest-rate futures for January 2010 declined to 9.83%, compared with 9.96% at Tuesday's close. The BM&F's interest-rate futures contracts are popular contracts for investors wishing to speculate on or hedge interest-rate risks. Expectations are for further official rate cuts in Brazil due to the slowing economy. Brazil's benchmark Selic rate is 11.25% and was trimmed by 150 basis points last week.