Market Perspective

Fundamental:

The flurry of economic reports from retail sales, Consumer Price Index, Jobless claims, the manufacturing index would be important; though not as much as what the Fed Chairman Ben Bernanke and ECB President Trichet would say towards the end of this trading week. The economic numbers coming out this week would be more in favor of the USD as a general effect of the end of the years numbers compared from the previous months.

However, this would be priced-in on the market with relative wide swings expected from the major currencies prior to every news that would be coming out. But the Friday's speech from these key people would underline the significance of the numbers. On the cyclical pattern it has been narrowly in line with our expectations both on a fundamental stand point and its technical perspective as prices would be re-aligning within the last quarter of the year.

Much of the direction for the USD would still be a wider trading range before and after the Thanksgiving holiday period would come. the back-drop of the Sovereign funds crisis would still be in the background and should be treated as such. Although, the UK data coming out this week would trigger a short-term relative reaction lower for the GBPUSD but not as significant where some traders are expecting a straight reaction downwards that may not happen. As the consolidation phase of the major pairs are already in line with their cyclical behavior and would only be reflected int he market within the next four weeks of the market.

For now we still hold our market sentiments from our last market outlook after this report. A more detailed analysis is found on our website.

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