• The dollar traded mixed on Monday. The S&P 500 slipped just 0.20 to 1,138.50. The euro pared overnight gains after Greek Prime Minister George Papandreou said “unprincipled speculators” need to be curtailed to prevent the fiscal crisis to spread. Earlier the single currency rose following French President Nicolas Sarkozy’s comment that the EMU is ready to help Greece if necessary and reports that Germany and France were planning to launch a European Monetary Fund to deal with sovereign debt problems. Unable to break resistance from its 50-day moving average, the USD/JPY declined modestly. Japan’s current account posted a sixth straight yearly expansion. Sterling was pressured by worries that the upcoming UK election will lead to a government without mandate to take forceful actions to solve UK economic problems. The AUD/USD touched the highest level in six weeks after Royal Dutch Shell Plc and PetroChina Co.’s A$3.3 billion bid for Australia’s Arrow Energy Ltd. The USD/CAD was unable to break the important 1.02-area support despite stronger-than-expected Canadian housing starts.
• After reaching its strong resistance in the 81 area, the dollar index is currently consolidating gains. The overbought condition had been reduced. Unless the support from the uptrend in the 79 area is broken, a new test of the 81 area resistance will be possible. If this resistance is broken, the dollar index will possibly rally to the upper trading band of the trading channel in the 83 area.

Financial and Economic News and Comments

US & Canada

• Canada’s seasonally adjusted housing starts rose 6.1% m/m to a higher-than-expected 196,700 annualized rate in February from a downwardly revised 185,400 annualized pace in January, according figures from Canada Mortgage and Housing Corporation. The February rise was led by a 19.1% m/m jump to 89,900 units in urban multiple starts and a 0.5% m/m increase to 89,200 units in single urban starts. February housing starts surged 71.0% y/y.

Europe

• The Sentix eurozone investor sentiment index advanced to a higher-than-expected -7.5 in March from -8.2 in February, suggesting eurozone investor confidence rebounded slightly from February’s decline. The current situation index improved to -18.8 in March from -19.5 in February. The expectations index increased to 4.5 from February’s 3.75.

• Germany’s seasonally adjusted industrial production advanced a less-than-expected 0.6% m/m in January, the sixth gain in 9 months, after a revised 1.0% m/m decline in December, IP data from the Federal Ministry of Economics and Technology showed. The January advance was led by gains of 8.8% m/m in energy output, 3.3% m/m in basic goods production, and 0.9% m/m in manufacturing output. January IP rose 2.2% y/y nsa wda, the first rise since August 2008, following a revised 5.7% y/y December decrease.

• Switzerland’s seasonally adjusted unemployment rate was unchanged at 4.1% in February, while the non seasonally adjusted unemployment rate declined to 4.4% from January’s 4.5%, according to data from the State Secretariat for Economic Affairs.
• Switzerland’s real retail sales rose 4.4% y/y nsa in January after a downwardly revised 4.4% y/y rise in December, registering a second consecutive year-on-year gain, data from the Federal Statistical Office showed.

Asia-Pacific

• Japan’s current account widened to a higher-than-expected ¥899.8 billion surplus ($9.965 billion) in January, a sixth consecutive yearly expansion, from a ¥132.7 billion deficit a year earlier, but narrowed slightly from a ¥900.8 billion surplus in December, according to figures released by the Ministry of Finance. The ¥1032.5 billion current-account gap from a year earlier was the second highest jump since comparable records began in 1986. The adjusted current-account surplus rose to ¥1712.8 billion in January from an upwardly revised ¥1302.2 billion in December. The trade balance surplus shrank to ¥197.2 billion from December’s ¥631.2 billion. Exports jumped 40.6% y/y in January, a second consecutive year-on-year gain and the largest since 1986, after an 11.7% y/y rise in December, while imports increased 7.1% y/y following December’s 6.0% y/y decline.
• The Japanese current conditions index rose to a higher-than-expected 42.1 in February from 38.8 in January, indicating merchant confidence in Japan rose for a third consecutive month to a 5-month high, according to the Cabinet Office’s latest economy watchers survey. The future conditions index increased to 44.8 from January’s 41.9.

FX Strategy Update

*Expert Market Commentaries, charts and information are provided by Hans Nilsson of Globicus International, Inc., a registered third party CTA, are intended for educational purposes only and do not constitute trading recommendations.

Past performance is not indicative of future results. Trading OTC Forex on margin carries a high level of risk, and may not be suitable for all investors. Please contact a registered trading advisor if you have any questions.

This report is intended solely for distribution to customers of Capital Market Services, L.L.C. Any information in this report is based on data obtained from sources considered to be reliable, but no representations or guarantees are made by Capital Market Services, L.L.C. with regard to the accuracy of the data. The opinions and estimates contained herein constitute our best judgment at this date and time, and are subject to change without notice. Capital Market Services, L.L.C. accepts no responsibility or liability whatsoever for any expense, loss or damages arising out of, or in any way connected with, the use of all or any part of this report. No part of this report may be reproduced or distributed in any manner without the permission of Globicus International, Inc.

©2004-2010 Globicus International, Inc. and Capital Market Services, L.L.C.