Investors look for
fiscal cliff strategy

As the recent struggles to float Greece fade from the
markets’ short term memory, eyes are firmly placed on developments in the US at
the moment. With the hourglass filling on America’s time to find a fiscal cliff
solution, the looming problem is, as yet, unsolved.

Investors look for
fiscal cliff strategy

As the recent struggles to float Greece fade from the
markets’ short term memory, eyes are firmly placed on developments in the US at
the moment. With the hourglass filling on America’s time to find a fiscal cliff
solution, the looming problem is, as yet, unsolved.

In the last couple of days, the first signs of frustration
reared themselves. These fears were somewhat extinguished following positive
comments from FOMC member John Boehner , who outlined that a deal could be
reached capping government spending, without raising taxes.

The main billing for the day will filter through the media
as Timothy Geithner meets congressional leaders to discuss the issue. Optimism
that the US Treasury Secretary will be able to spark some constructive strategy
to tackle the cliff may weaken the dollar.

In the UK today Mervyn King’s press conference may intimate
the sentiment towards further easing. As we already know, the Governor of the
Bank of England is favourable to buying securities to boost the trundling economy;
reinforcement of this could see sterling weakness against its counterparts.

Following days of rupee weakness, which saw the Indian
currency almost reach three and a half year highs, the currency has seen a reverse
moving back as the initial threat of an Indian ratings downgrade was subdued.
If the rupee continues to strengthen to its normal levels, the time to buy
could be now.

 

Key Announcements
Today:

• 07.00am – GBP – Nationwide HPI m/m: returned down at parity,
  0%
• 08.55am – EUR – German Unemployment Change: returned lower
  at just 5k
• Tentative – EUR – Italian 10y Bond Auction
• 10.30am – GBP – BOE Gov King Speaks
• 10.30am – GBP – BOE Financial Stability Report
• 13.30pm – USD – Prelim GDP q/q: expected to increase to 2.8%
• 13.30pm – USD – Unemployment Claims: expected to decrease
  from 410k to 392k
• 15.00pm – USD – Pending Home Sales m/m: expected to increase
  to 0.9%
• 16.20pm – EUR – German Buba President Weidmann Speaks