by Angelo Airaghi
Inter-banking credit spreads in the U.S. seem to demonstrate that financial institutions are caution about the capacity of debtor companies to repay debts and it will take sometime before confidence will prevail again. The financial crisis is spreading over global economies and the effects are just beginning to emerge. The Euro, in the mean time, is again challenging key resistance levels. They are at the conjunction of various trendlines. Consequently, a strong breakout is necessary for higher prices.
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Confidence is fading in the United StatesGlobal tightening is unfolding and could soon hit economies of the emerging markets. Nonetheless, another series of rate cuts is shortly expected in the U.S., so the bring the federal funds rate below 2.00% in the coming months. Last week, Fed officials acknowledged, with only two dissenters, that the economy is declining faster than previously expected and inflation¡¯s pressure might ease, as the economy slowdown would intensify. A weak US dollar does not appear to be a big concern for now, since it supports exports, although it could contribute to import higher inflation. In effect, the international trade remains a cornerstone of the U.S. economy, even tough the U.S. trade deficit increased to US$ 62.32 billion (US$ 58 billion expected) in February from January¡¯s 58.96 billion. Imports moved up 3.1% on the top of January¡¯s 1.8%, while exports rose 2.0%. Angelo Airaghi is a Commodity Trading Advisor, registered with the National Futures Association and the Commodity Futures Trading Commission. He has been an active professional since 1990 working for major international financial companies. In the past 10 years, Angelo Airaghi has been an analyst and commentator for national and international media. This article contains the following sections:
Confidence is fading in the United States
For ECB is business as usual
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