Mon Mar 17 11:17:00 2008(EST)
* 17 Mar 08: 16:16(LDN) - FX NOW! GBP/USD, GBP/JPY Flows - USD is having a bad day, but GBP is suffering even more
GBP has been one of the day's poorest performers and there is no sign things are changing. It appears that at, or around, the afternoon fixing GBP was for sale and bids are no easier to find now than they were earlier today. The odds are that it took very modest size to push GBP lower and the parallel decline in USD vs the other majors did not help. USD has come under pressure from the downward turn in equities. M.B.
* 17 Mar 08: 15:59(LDN) - FX NOW! EUR/USD, EUR/GBP Flows - USD gets momentary support from rumor re: strong USD policy
FX and general market rumour mill has calmed down significantly since the N. American market has opened for business. Price action has calmed down with the reality hitting the market that dealers are shy of taking any risk, with Tue's Fed meeting the focus and event risk liable at any second. Newswire reports, supposedly "sourced" have given USD a momentary bid with the suggestion that the ECB was going to try to apply pressure on the US to back up its "strong USD policy". The "sourced" story and the thought of the US responding to this type of pressure has proved to lack the power to turn USD's general trend for more than the time it takes to think about it seriously. M.B.
* 17 Mar 08: 14:42(NYC) - FX NOW! EUR/USD, 1m vols flows - vols squeezed higher
FX implied vols are up from what we already pointed out as 'verbal intervention' levels last week, with USD/JPY 1m vols highest since 1998 and EUR/USD 1m highest since 2001, and only a couple of vols off the last G7 intervention levels in 2000. The G7 has not exactly been successful in generating a coherent message on FX beyond saying that excessive volatility is undesirable, with the US in particular finding few reasons to get concerned with the weak dollar. This could be changing however, if the latest USD rout turns into a wider and more systematic crisis of confidence in US assets. VS
* 17 Mar 08: 13:49(LDN) - FX NOW! EUR/USD, USD/JPY Flows - USD, pre-Pres Bush rally stalls while his comments hit wire
It seems the rumor mills have stopped working overtime. The main phobias have been covered to include intervention, cutting lines, hedge fund rumors, earnings rumors and unilateral as well as coordinated rate cuts by central banks. In advance of Pres Bush's comments, USD ticked up as dealers and speculators that have been involved, chose to lock in any gains sitting on their books. Pres Bush, after his morning briefing, has supported the Fed action and claimed to have taken "strong and decisive" action. Despite the weekend events and poor earnings reports, Pres Bush says that US financial institutions are "strong". The pre-Bush USD rally has stalled while newswires release his statement. M.B.
3:35 PMMARGINS: Due to the recent turmoil in the financial markets, we has decided to increase margin requirements on CFDs of companies in the financial sector to 50%. (Primarily within diversified banks). We will commence rerating these on a rolling basis during the next 24 hours.
3:35 PMMARGINS continued: The roll out schedule for increased CFD margin on financials: 17 March-2008: European traded instruments was rolled out @ 15:30 CET/14:30 GMT, US traded instruments is being rolled out starting @ 16:30 CET/15:30 GMT, and on 18 March-2008: Asia Pacific traded instruments starting @ 03:00 CET/02:00 GMT.
3:38 PMRe Equity Trade Recommendation: We Sold DAX.I at 6255, Target 6220. Having seen support found at 6225, we choose to close this position at 6235, as support is currently being found just below that level.
3:43 PMAccording to Bloomberg, a source from the ECB tells MNI that ECB officials will express concern about the strength of the EUR (i.e. verbal intervention)...
Swiss energy giant EGL is set to sign a 25-year deal in Teheran on Monday to buy 5.5 billion cubic meters of Iranian natural gas per year, starting in 2011, for a reported €18 billion.
The contract will be the second largest European gas deal, although EGL spokesman Bogdan Preda told The Jerusalem Post, "We are not releasing the value of the deal." ... http://www.jpost.com/servlet/Satellite?cid=1205420703987&pagename=JPost/JPArticle/ShowFull
Fed Cuts Discount Rate, Lends More to Avert Meltdown (Update4) The Federal Reserve, struggling to prevent a meltdown in financial markets, cut the rate on direct loans to banks and became lender of last resort to the biggest dealers in U.S. government bonds.
JPMorgan Agrees to Buy Bear Stearns for $240 Million (Update2) JPMorgan Chase & Co. agreed to buy Bear Stearns Cos. for $240 million, about 90 percent less than its value last week, after a run on the company ended 85 years of independence for Wall Street's fifth-largest securities firm.
Bear's Schwartz Fought Failure as Cayne Played Bridge (Update1) Alan Schwartz wasn't supposed to be running Bear Stearns Cos., and now he is presiding over the 85- year-old securities firm's sale.
Lehman's Fuld Says Liquidity Concern `Off the Table' (Update2) Lehman Brothers Holdings Inc. Chief Executive Officer Richard Fuld said the Federal Reserve's move to provide funding to brokers should alleviate investor concern that Wall Street firms may face cash shortages.
http://www.ft.com/cms/s/0/682b8db0-f0a0-11dc-ba7c-0000779fd2ac.html
IMF tells states to plan for the worst
