Opening Comments
Asian Equity Indices sold off overnight behind Singapore’s -3.3% GDP release but the planned slippage in the Chinese Yuan, down to 7.2930 pulled a stronger bid to the JPY which had been consolidating recent gains against USD. USD/JPY now has a triple bottom formation near 111.30 but EUR/JPY is retracing up into last week’s losses.
EUR/USD is up better than 100 pips and CABLE is off only 38 pips at this writing. The USD has been under a good bit of pressure against the EUR with the ECB continually commenting on the specter of higher inflation and its likely response. Recent USD gains against GBP were due to the likelihood of the BOE cutting rates as many as 2 times in Q1 2008. European Bourses are putting in a mixed performance with the FTSE and DAX turning slightly lower into the U.S. open.
U.S. data includes the Johnson Redbook at 8:55am which will offer a snapshot of post-Christmas retail activity. November Construction Spending is out at 10am EST and is expected to have fallen 0.4%. December ISM is expected at 50.5 versus 50.8 - levels below 50 reflect a negative outlook. At 2pm, the FOMC releases minutes from its last meeting.
Crude Oil is over $98 into the open, Equity futures are unchanged to slightly positive.