Week ending 13 March 2009: Global stock indices rose in the early part of the week and investor confidence tried to follow. Quantitative easing and a LIBOR rate cut by the Swiss National Bank was reinforced by direct intervention in the forex trading market, and the franc depreciated 500 pips versus the Euro and 300 versus the U.S. dollar within 22 minutes Thursday, easing the currency crisis brewing in Central and Eastern Europe.

Australia’s unemployment rate rose to 5.2% in February and 1.8K new jobs were created, mainly part-time, while ANZ job advertisements fell −10.4% m/m. February NAB business confidence improved to −22 from −32 previous, however, business conditions deteriorated to −20 from −11. March consumer inflation expectations ticked down to 2.2% while consumer confidence rose to −0.2%, and January investment lending fell −3.8%. AUD/NZD rode the wave of equities, spiking beneath support at 0.6340 then climbing to resistance at 0.6600 and closing at 0.6572.

The FOMC meets Wednesday, 18 March, and is expected to discuss additional quantitative easing measures, most likely within the mortgage market. February advance retail sales surprised markets with a fall of only −0.1% while January’s reading was revised up to 1.8%. January trade balance narrowed to a deficit of US$36.0Bn.

The Eurozone March Sentix investor confidence reading plummeted −42.7, the lowest reading on record. January retail sales printed 0.1% m/m, −2.2% y/y, and January PPI fell −0.5% y/y. EUR/USD echoed general sentiment, falling to December’s support at 1.2561 before rising to resistance at 1.2960, closing at 1.2913.

The NIESR estimate of U.K. February GDP printed −1.8% m/m while the January trade balance printed a deficit of £3585Bn. January industrial production fell −11.4% y/y and manufacturing production −12.8%. February BRC retail sales monitor rose 0.1% from 3.2% previous. GBP/USD continued its gentle downtrend, falling as low as 1.3653 before recovering to close at 1.3977, and EUR/GBP surged past resistance at 0.9030 to 0.9317 before closing at 0.9236.

Canada lost 82.6K jobs in February and unemployment rose to 7.7% from 7.2% previous. January international merchandise trade printed a deficit of CA$1.0Bn and February housing starts slid to 134.6K. USD/CAD surged as high as 1.3062, the highest since September 2004, before respecting the resistance level and sliding to close at 1.2724. AUD/CAD also rose strongly before turning at resistance at 0.8400.

The RBNZ cut rates 50bps as expected to 3.0%. The terms of trade index for 4Q2008 fell −0.9%, January retail sales fell −1.1%, and February PMI printed 38.6. USD/NZD followed the general path and closed at 0.5239, a gain of 300 pips, while AUD/NZD fell hard to close at 1.2531.

The BoJ meets Wednesday and is also expected to discuss quantitative easing measures. The January trade deficit ballooned to ¥844.4Bn and the current account total to ¥172.8Bn. January machine orders are down −39.5% y/y, industrial production −31.0%, and February machine tool orders −83.9%. The February Eco Watcher survey printed 26.5 outlook and 19.4 current, with 50 being the breakeven point. Note that the Japanese fiscal year ends 31 March and repatriation flows of corporate profits are likely. USD/JPY consolidated between 96.00 and 99.00, AUD/JPY between 0.6200 and 0.6475. EUR/JPY slammed through resistance at 125.80 and closed at 126.58.