fake rally is on for tonite...

In anticipation of a rate cut.


European leaders convened over the weekend and decided not to compile a massive coordinated bailout similar to the US$ 700 billion bailout that the U.S. Senate and House passed last week. There is growing talk that global central banks may announce a concerted interest rate cut as early this week yet some dealers believe this is highly unlikely. Germany joined the list of countries that have guaranteed bank deposits. European financial institutions such as Fortis, UniCredit, and Hypo Real Estate are facing significant problems. The Federal Reserve today announced it will offer US$ 150 billion in 85-day credit through its Term Auction Facility and announced it will begin to pay interest on depository institutions’ required and excess reserve balances. The Fed also announced that US$ 900 billion of Term Auction Facility credit will be potentially outstanding over the year end. Significant demand for U.S. dollars remains a major problem for the financial markets. Banks are hording U.S. dollars and three-month interbank lending rates remain above 5.0%, a stark contrast to interest rate expectations that suggest the Federal Open Market Committee will reduce the federal funds target rate by 50bps to 1.50%.


Tuesday, 7 October 2008

all times GMT

(last release in parentheses)



N/A Germany September wholesale price index (-1.8% m/m)

N/A Germany September wholesale price index (7.4% y/y)

0430 Australia Reserve Bank of Australia interest rate decision

0500 Japan August leading index (91.4)

0500 Japan August coincident index (103.5)

0755 Germany September PMI, services

1000 Germany August factory orders (-1.7% m/m)

1000 Germany August factory orders (-0.7% y/y)

1630 US Federal Reserve Chairman Bernanke speaks

1800 US Federal Open Market Committee meeting minutes

1900 US August consumer credit

2301 UK October Nationwide consumer confidence (52)