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At 4:30:00 AM UK January Trade Balance (exp -2.9 Bln, prev -3.18 Bln) UK January Trade Balance Non-EU (exp -2.2 Bln, prev -2.36 Bln) UK January Exports (exp n/f, prev14.32 Bln) January Imports (ex n/f, prev 17.51 Bln) UK February PPI Input M/M (exp 0.5%, prev 0.6%) UK February PPI Input Y/Y (exp -6.9%, prev -6.3%) UK February PPI Output M/M (exp 0.1%, prev -0.1%) UK February PPI Output Y/Y (exp -0.2%, prev -0.5%)
Japanese machinery orders fell 15.6% in January from December, the biggest fall since records were first published in 1987 and more than three times of 4.3% what markets expected. Analysts say that last week's GDP data showed capital spending at its worst post war level so fall in machinery orders are not a big surprise. USD/JPY is trading near 129 yen. The yen is weighed by Mizoguchi's warning and speculation that Japan's Government Pension Investment Fund may announce a shift in its asset allocation plans to allow for an increase in foreign bond investment. The council will announce its plan calling for a gradual shift in Japan's 150 trillion yen worth of public pension funds into a semi-governmental agency, the GPIF, over the next seven years. Last March, the fund held 4.08% or 1.06 trillion yen in foreign bonds, and traders are wary of a re-allocation in the total fund worth 27.5 trillion yen. Vice Min. for Economy Hirose said that Japanese officials might travel to Washington this week to talk with US counterparts about the controversial tariffs on steel imports. President Bush is due to sign the act on March 20 and Japanese officials will try to come earlier to persuade him not to impose 30% tariffs on steel imports. Japan is ready to take the case to the WTO in case negotiations with the US prove unsuccessful. Resistance is eyed at 128.75, 129.30 and 129.85. Support at 128.22, 127.60, 127.0 and 126.35.
EUR/USD is steady in range of 87.50 as euro economy is likely to rebound together with the US. The European Commission estimated the euro 12 nations economy which shrank in the final quarter of 2001, will probably grow as much as 0.4% in the first three months of this year. The ECB, which kept interest rates unchanged last week, has signaled it probably won't lower borrowing costs again after four cuts last year. Analysts predict that the ECB policy makers will start raising rates around the beginning of the fourth quarter. ECB's Solans said on Saturday that the worst is over at the end of the year the European economy could be growing at about its potential growth rate, that is about 2 or 2.5%. Indeed the indicators we've seen are confirming expectations that a recovery can happen in 2002.'' Support is next seen at 86.70 and 86.40. Should the euro have the impetus to rise, it would have to breach the 200-day moving average of 88.50 before targeting 89.0 and 89.40.
Crude oil rose as much as 50 cents to $24.34 a barrel after a report that Iraq would block the return of United Nations arms inspectors amid speculation the U.S. and allies are considering military action to force compliance. British PM Blair last week said alliance may be forced to attack Iraq which is OPEC's fourth-biggest oil producer, if it's caught with weapons of mass destruction. Iraqi Vice-President Ramadan said the country's opposition to UN inspectors wouldn't change. Blair will meet the U.S. Vice President Cheney on Monday, who is on a 12-country trip to boost support for the U.S. war on terrorism.
This week's US economic highlights include wholesale trade, retail sales, jobless claims, business inventories, import/export prices, current account balance, PPI, industrial production, and the University of Michigan consumer confidence survey. Key Eurozone indicators consist of GDP, German foreign trade, French CPI, Spanish retail sales, Spanish CPI, ECB monthly bulletin, French employment, French industrial production, Italian industrial production, French trade balance, and Italian CPI.