Forex rebates on every trade - win or lose!

The thing with Spanish property, JT, is that there has never been any real supply constraint. There's always been enough land for them to just build a new village whenever they've wanted. That's worked for the developer, but it just serves to devalue the market further when you get a crunch as there is now.

Anyway, cable is clearly falling on the 4 hour chart and is continuing to make lower highs and lows on the 15 minute chart.

Although the 4 hour chart suggests it's got further to fall, it's now approaching the rising blue support line which currently sits 10 pips or so below $1.98. There's still another 2 days to wait till the MPC, so I suspect it might well bide its time ahead of the Fed minutes tonight and then make a decision on direction once they're released.

08:00 *UK MARCH HOUSE PRICES DOWN 2.5 PERCENT VS FEB - HALIFAX

That's forced it down to nigh on support.

TF ) 04/08 08:17
UK March house prices down 2.5 percent vs Feb - Halifax


- LONDON (Thomson Financial) - UK house prices registered their biggest monthly fall in over 15 years in March, the country's leading mortgage lender said.

Halifax, which is part of the HBOS banking group, said house prices dropped 2.5 pct month-on-month, the biggest fall since September 1992 and much worse than the 0.4 percent fall analysts had expected, following February's fall of 0.3 percent.

The average house price in the UK in March was 191,556 pounds, down from February's 196,649 pounds, Halifax said.

In annual terms, March's prices slowed to a rise of 1.1 pct from February's 4.2 percent. The March increase was the smallest since March 1996 and below analysts' forecasts for a 2.3 percent rise.

House prices fell 1.0 percent in the first quarter from the previous quarter, the biggest fall since the second quarter of 1995.

Deleted. Posted twice. Board broke.

Hils, perhaps all the news is now reflected in the price and we will get a bounce. JT

Maybe, JT, but it's neither bouncing nor punching through support just now.

It's nothing more than a 50-50 call for the gamblers.

Agreed Hils. GBP/CHF tasty today!

Morning all. Was short cable yesterday looking at pretty much the same chart as Hils this morning, but got stopped out for -25. Short this morning again from 1.9833, stop now in at 1.9805, looking for 9765

Weekly S1 at 9755.....

Thanks JT. Now closed by limit for +68. Looks like strong support around here so will wait and see with cable. Got the day off so going to go and do something else now.

3 month Sterling Libor has been edging lower these past few days and the BoE have now announced that it is to increase the amount up for 3 month auction next week to 15bln from 10bln in an attempt to improve liquidity.

I wonder if this is a precursor to them leaving rates on hold on Thursday???

Doesn't seem to be the consensus amongst currency traders - at least not today, after the March house price data.

Cable's dropped 100+ pips since the bank's announcement.

I realise that, Chocopops, and I'm not suggesting that anyone go out and buy a falling market. It wouldn't be the first time that the market got it wrong though. And it sure won't be the last.

But ....... as I see it, the BoE are torn between the two evils of soaring inflation and a weakening economy.

Top of the list is their remit from the Chancellor to control inflation. That's in black and white on their website. By providing liquidity to the interbank market, I wonder if the MPC might be looking to get the best of both worlds by leaving rates on hold.

It's just a hunch. I'm probably wrong.

:o)

Sorry, Hil - I didn't think for a moment that you hadn't noticed ;)

Fwiw I do think the MPC will cut on Thursday, and this morning's announcement might serve as a gag for the 50 BPers on the board.

In the end, whatever they hand out is just another placebo.

This is how the banks have reacted to what the BoE are doing.

Today - hot off the press 20 minutes ago

STERLING

TOM/NEXT 5.15 - 5.25

7 DAY 5.20 - 5.27

1 MTH 5.53 - 5.61

3 MTHS 5.86 - 5.94

6 MTHS 5.82 - 5.90

12 MTHS 5.70 - 5.80

Yesterday lunchtime

TOM/NEXT 5.20 - 5.25

7 DAY 5.20 - 5.28

1 MTH 5.58 - 5.66

3 MTHS 5.87 - 5.95

6 MTHS 5.84 - 5.92

12 MTHS 5.70 - 5.80

LONDON (Dow Jones)--Mr Darling has called on the G7 to devise a plan to calm credit markets.

He is not alone in calling for government intervention to bring an end to market turmoil. Mr Strauss-Kahn, managing director of the IMF, is also pressing for action at an official level to sort out the problems in the financial system.

Central bankers have been trying for more than eight months now to come up with measures that would alleviate the situation. Their efforts have helped contain the fall-out from the turbulence in financial markets but they have yet to restore orderly conditions.

It might be thought presumptuous of G7 finance ministers to suppose they could find a remedy for current ills when the central banks, with their deeper understanding of the workings of the markets, have so far failed.

However, finance ministers have an advantage over central bankers. They have control of taxpayers' money. What the clamour for G7 governmental intervention boils down to is a demand that funds from the public purse should oil the wheels of the credit mechanism.

The suggestion that the taxpayer should bear the cost of the market meltdown is bound to raise hackles. It will offend those purists who believe that bailing out the banking system by such means would introduce an unacceptable degree of 'moral hazard'. Nowadays, though, arguments based on 'moral hazard' get short shrift from bankers and politicians who fear the consequences if the pre-August 2007 status quo is not restored quickly. A much stronger practical objection, for governments at least, is that voters take a highly negative view of their tax monies being diverted to support the financial sector.

The electorate, by and large, does not see the linkages between the infusion of public money, the smooth functioning of the credit system and general economic well-being.

They are very likely to look askance at a process in which their hard-earned cash goes in at one end and remuneration for financial company managers, at a high multiple of the average, comes out at the other end.

The proposal that there should be a public subsidy so that senior bankers can go on living in the style to which they have become accustomed lacks widespread electoral appeal. The Northern Rock rescue presents a salutary example.

As soon as UK taxpayers realised that public money would probably be at risk, one way or another, in the resolution of the Northern Rock crisis, the ten-point opinion poll lead that Mr Brown's Government had hitherto enjoyed turned into a ten-point deficit.

Despite such headwinds, a strong tide is running in favour of government action. Mr Fisher, president of the Dallas Fed, recognised this when he said yesterday that current conditions in the USA differ from those in Japan in the 1990s. He is one of those policymakers who are sceptical of the benefits of using public money to resolve the crisis.

Throughout the 1990s, US observers urged the Japanese authorities to deploy public funds in freeing up their paralysed banking system. It was only in 2003, after more than a decade of recurrent financial problems and sub-par economic performance, that Japan bit the bullet and injected public funds into the banks. Subsequently, the debt malaise lifted very quickly. Though Japan's economic growth is still less than sparkling, this reflects structural factors, including demographic trends, rather than financial weaknesses.

If the present US situation were truly parallel to Japan's past woes, the case for using public money in resolving banking problems might appear strengthened.

Mr Fisher argued there was no true comparison between the US and Japanese cases. He pointed out that large banks and the state-owned postal system had dominated Japan's financial sector, whereas securitised asset markets were at the heart of US finance.

Though this is an important difference, it is not obviously relevant to the 'public money' argument. More to the point was Mr Fisher's contention, 'these are totally different societies, different economies, different political systems'. The ideological objection to state intervention in the free working of financial markets is likely to be much stronger in the USA than it was in Japan.

The US aversion to government involvement is likely to be especially powerful in an election year. Consequently, it seems unlikely that the G7 will fashion an agreed plan for dealing with the crisis. Pace Mr Fisher, the striking similarity between the US situation now and Japan in the 1990s is that both instances feature capital losses for financial institutions and uncertainty over the value of a wide range of balance-sheet assets. The USA has its own precedent for the use of public funds in supporting financial markets in the Resolution Trust Corp's operation in the early 1990s.

The RTC, however, administered the assets of failed mortgage lenders. There was no question of those mortgage lenders benefiting from its actions and, in the end, there was no net loss to the US taxpayer.

Now, the US authorities wish to keep hard-pressed participants in ABS and related derivative markets in being. They are probably fearful, with good cause, that if they were to take ownership of those institutions' impaired assets, there would be a substantial loss for the taxpayer to absorb.

The lesson from Japan's experience is that any public money used to free up the financial markets should be repayable by market participants. The prospect that a proportion of future profits earned by commercial and investment banks should flow back to the Treasury might dampen the competitive ardour and innovative flair of their management teams for a while to come.

But, on an objective view, that might be no bad thing.

FRANKFURT (Dow Jones)--The European Central Bank is widely expected to keep the key policy rate steady at 4.0% this week as euro-zone inflation remains at record highs.

Despite continued tension in the interbank money market, all 51 private-sector banks polled by Dow Jones Newswires expect the ECB to stay on hold Thursday. But most also forecast that the ECB to lower interest rates later in the year as economic activity wanes.

"With the spike in headline inflation and the German public sector wage deal, some of the worst ECB fears about second-round effects are on the verge of being realized," said Holger Schmieding, chief European economist at Bank of America.

Consumer prices in the euro zone rose at their fastest-ever rate and much more than expected in March, up 3.5% on the year. The ECB has aimed to steady inflation at just below 2.0% over the medium term.

A recent agreement granting German public-sector workers a nearly 8% wage hike over two years has been "clearly higher than we expected", ECB governing council member Axel Weber warned on Saturday.

"At a minimum, the ECB hawks will want to see clear evidence that this German wage deal remains an outlier, or whether it spreads to other sectors and countries. This makes a rate cut before the summer holiday unlikely," Schmieding said.

But weaker global demand, coupled with a stronger euro and tighter credit conditions, will eventually put a damper on euro-zone activity. Private-sector economists expect the annual growth rate to drop to about 1.6% this year from 2.6% in 2007.

The interbank euro money market, in which banks borrow funds from each other, also remains disrupted as banks continue to hoard cash despite a series of unprecedented liquidity provisions from the ECB.

"The ECB remains convinced that a way out to the crisis may be found by keeping rates on hold, and continuing to pump massively liquidity in the market to smooth out money market dislocations," Aurelio Maccario, co-head of European economics at UniCredit, said in a note to clients.

Since the onset of the financial crisis last August, the ECB has supported European banks through special liquidity tenders. It has also routinely allocated more liquidity than banks need to conduct their daily operations, and significantly lengthened the maturity profile of its refinancing operations.

Yet the Euro Interbank Offered Rate remains crisis levels. The closely watched three-month Euribor fixed unchanged at 4.742% Tuesday, the highest level since late December.

"As time goes by, the risk that the crisis will take its toll on the real economy significantly increases. Eventually, a rate cut should not be seen as a tool to solve the financial crisis, rather as a means to help the real cycle, which has just settled below-trend," Maccario said.

Seventeen of the 51 economists polled by Dow Jones Newswires expect the ECB to cut rates by at least one 25-basis point cut by the end of the second quarter, while the vast majority of economists said that rates will drop before year-end.


Below are the results of the poll of expected movements in interest rates:

===

2008 2008 2008 2009
Apr.10 2Q 4Q 1Q

MODE 4.00% 4.00% 3.50% 3.50%

High 4.00% 4.00% 4.00% 4.00%
Low 4.00% 3.50% 3.00% 3.00%

AIB Global 4.00% 4.00% 3.50% 3.50%
Banca Intesa 4.00% 4.00% 3.50% 3.25%
Banco Santander 4.00% 4.00% 3.50% 3.25%
Bankh. Lampe 4.00% 4.00% 4.00% 4.00%
Bank of America 4.00% 4.00% 3.75% 3.75%
Bank of Ireland 4.00% 3.75% 3.50% 3.50%
Barclays Capital 4.00% 4.00% 3.50% 3.50%
BayernLB 4.00% 4.00% 3.50% 3.50%
BBVA 4.00% 3.75% 3.50% 3.50%
BHF-Bank 4.00% 3.50% 3.00% 3.00%
BNP Paribas 4.00% 3.75% 3.25% 3.00%
Bremer LB 4.00% 4.00% 3.50% 3.50%
CECA 4.00% 4.00% 3.75% 3.50%
Citigroup 4.00% 3.75% 3.25% 3.00%
Commerzbank 4.00% 4.00% 3.75% 3.50%
Credit Agricole 4.00% 4.00% 3.50% 3.50%
DekaBank 4.00% 4.00% 3.75% 3.50%
Deutsche Bank 4.00% 4.00% 3.50% 3.25%
Dexia Bank 4.00% 4.00% 3.50% 3.50%
DKIB 4.00% 4.00% 3.50% 3.25%
Dresdner Bank 4.00% 4.00% 3.50% 3.50%
Erste Bank 4.00% 3.75% 3.50% 3.75%
Fortis Bank 4.00% 4.00% 4.00% 4.00%
Goldman Sachs 4.00% 4.00% 4.00% 4.00%
Helaba 4.00% 4.00% 4.00% 4.00%
HSBC Trinkaus 4.00% 3.75% 3.25% 3.00%
HWWI 4.00% 4.00% 4.00% 4.00%
ING 4.00% 4.00% 3.50% 3.50%
Invesco 4.00% 4.00% 3.75% 3.75%
JP Morgan 4.00% 3.75% 3.50% 3.50%
Julius Baer 4.00% 4.00% 3.25% 3.25%
KBC Asset Man. 4.00% 3.75% 3.25% 3.25%
La Caixa 4.00% 4.00% 3.75% 3.75%
LBB 4.00% 3.50% 3.50% 3.50%
LBBW 4.00% 4.00% 3.50% 3.50%
Lehman Bros. 4.00% 3.75% 3.50% 3.50%
Merrill Lynch 4.00% 4.00% 4.00% 4.00%
M.M. Warburg 4.00% 4.00% 3.50% 3.25%
Morgan Stanley 4.00% 4.00% ---- ----
Natixis 4.00% 4.00% 3.50% 3.25%
Nordea 4.00% 4.00% 4.00% 4.00%
NordLB 4.00% 4.00% 3.50% 3.50%
Postbank 4.00% 4.00% 4.00% 4.00%
RZB 4.00% 3.75% 3.50% 3.50%
SEB 4.00% 3.75% 3.25% 3.00%
Societe Generale 4.00% 3.75% 3.25% 3.25%
Standard Chartered 4.00% 4.00% 3.50% 3.50%
UBS 4.00% 3.75% 3.00% 3.00%
UniCredit 4.00% 3.75% 3.25% 3.00%
Voeb 4.00% 3.75% 3.75% 4.00%
WestLB 4.00% 4.00% 4.00% 4.00%

( TF ) 04/08 15:52
OUTLOOK European, US data due Wednesday, April 9


- LONDON (Thomson Financial) -

EURO ZONE

-The final reading for GDP growth in the fourth quarter is expected to be left unrevised at 0.4 percent quarter-on-quarter, and at 2.2 percent from the previous year.


GERMANY

-The trade balance is forecast to decline to a surplus of 15.2 billion euros in February, from 17.1 billion in the previous month.


UK

- Economists expect growth in UK manufacturing output to slow to 0.1 percent in February from 0.4 percent in January, though base effects mean the annual rate is forecast to rise to 1.5 percent from 0.6 percent.

The wider measure of industrial output should rebound to show 0.2 percent growth from a 0.1 percent decline.

Neville Hill, economist at Credit Suisse, said manufacturing output is unlikely to change markedly but noted there are several positive factors underpinning the sector.

'Business surveys (in January) remained at levels consistent with output rising and the depreciating currency may also have provided some support,' Hill said.


U.S.

- Wholesale inventories are expected to have increased 0.5 percent in February, three tenths of a point less than in the previous month. Meanwhile, wholesale sales are expected to have increased a meagre 0.2 percent in February following a 2.7 percent increase in the previous month.

'While inventory-to-sales ratios in the wholesale sector remain at historical lows, we believe firms will become increasingly cautious in their stock building in the face of a slowing US economy,' said economists from Lehman Brothers.

LONDON (Reuters) - Interest rates can fall because inflation is low, Prime Minister Gordon Brown said on Tuesday, two days before a Bank of England interest rate decision and despite forecasts for higher inflation this year.


Must be me, but I had thought the BOE set interest rate levels! Something to do with independence. JT

JGT

Surely Brown can still pass an opinion?

If inflation is low, then surely interest rates do not have to go up to bring inflation down? Pro-rata, interest rates could come down, since inflation is low.