Market Research

Pound May Well Bounce Back After Northern Rock. By Nicholas Hastings.
LONDON (Dow Jones)--Sterling's sharp slide on news of Northern Rock's nationalization may be entirely justified. But any decline is unlikely to last long. As David Simmonds, head of foreign exchange at Royal Bank of Scotland, said: "Expected sterling losses on news that Northern Rock is about to be nationalized will offer better levels to sell euro/sterling."

Economic Calendar for this week
Feb 18 - 22

The Scandies Could Be On To A Winner. By Nicholas Hastings.
LONDON (Dow Jones)--Looks like win-win for the Scandies! If Sweden and Norway have got it right and the global economy stops deteriorating soon, then both their currencies should get a boost as yield differentials widen in their favor. But, even if the Scandinavian central banks have got it wrong and global growth continues to slide, their currencies should still find support from strong growth.

Yen May Be A Good Bet On Dips. By Nicholas Hastings.
LONDON (Dow Jones)--The yen's latest downturn could well prove to be a good buying opportunity. The latest fillip in global risk appetite - driven by surprisingly good economic news from both the U.S. and Japan - have helped to put low yielders like the yen under selling pressure again. However, unless this spells an end to the recent concerns over the global economy, risk appetite will more than likely fall back again, triggering a fresh wave of yen buying as carry trades are reversed again.

The Pound Could Yet Stage Another Rally. By Nicholas Hastings.
LONDON (Dow Jones)--Don't write the pound off just yet. Inflation pressures could still prove even stronger than anticipated, while economic growth may fail to slow quite as rapidly as many expected. The likely reluctance by the Bank of England to rush into further rate cuts could ensure more support for the U.K. currency, especially if risk aversion stops rising and investors still see some benefit in chasing higher yields.

Chances Of A Dollar Rebound Slipping Away. By Nicholas Hastings.
LONDON (Dow Jones)--Thought the chances of a dollar rebound were increasing? Forget it. Last weekend's developments in Tokyo appear to have put paid to that. As Paul Chertkow, head of global currency research at Bank of Tokyo-Mitsubishi UFJ in London, put it: "The view that the dollar is embarking on a stronger path appears premature."

Euro Should Weather Any ECB Policy Shift. By Nicholas Hastings.
LONDON (Dow Jones)--The apparent shift in the European Central Bank's policy towards an easing bias may not hurt the euro. Certainly, with the single currency looking overbought against the dollar and with bond yield spreads moving in the dollar's favor, there is a good chance the euro will be pushed back down to the lower end of its recent trading range at $1.4320. However, any serious break under that level may prove elusive.

Sterling Facing Certain Uncertainty. By Nicholas Hastings.
LONDON (Dow Jones)--So, the Bank of England did what the market was expecting - nothing more and nothing less. The 25 basis-point interest rate cut to 5.25% Thursday was entirely expected and the slim chance that the BOE would plump for a 50 basis-point cut, or, worse, for no change, came to nothing. It stuck to its well-rehearsed line about balancing weaker growth with higher inflation - a sign that rate cuts are going to be shallow and gradual.

Ugly Data Look Set To Block Euro Gains. By Nicholas Hastings.
LONDON (Dow Jones)--So far, so bad for the data flowing from the euro zone this week. Tuesday's purchasing managers' index showed that clouds are gathering over the region's growth prospects, batting the euro sharply lower. Grim retail sales data for December certainly didn't help either.

Dollar Sentiment On The Turn. By Nicholas Hastings.
LONDON (Dow Jones)--Watching sentiment towards the U.S. dollar turn more positive may be like watching an oil tanker turn around - slow and laborious. Nevertheless, as events over the last few days have shown, sentiment is definitely turning and the dollar's downside risks are falling.