Tuesday, January 16, 2007

Japanese rates and Oil.....

Reports out of Japanese newspapers this morning that the BOJ is unlikely to raise rates later this week. This initially put pressure on the Yen as the market was expecting (or at least hoping) for a rate rise. The problem as CB officials see it is that they have not seen enough sustained evidence that consumer prices and spending have picked up, and will stay up.

Oil was again on the front pages as Venezuela is calling for Opec, in an emergency meeting, to cut production by up to 500,000 barrels per day. This as prices are currently falling again (at 52.07 currently). Mexican interest rates are under pressure this morning as a result of the falling oil price. With the curve steepening out from very flat levels.

Good Luck and Good Trading



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