Morning Forex Fundamental

EUR

'We've seen a bit of profit taking and investors are reluctant to take new positions' - Matthias Jasper, head of equities at Wgz Bank

European stocks slid for a second day on Tuesday

Impact High

European stocks edged lower for a second day after European Central Bank Governing Council member Jens Weidmann said expansion of the European Financial Stability Facility (EFSF) wouldn't help to solve the debt crisis.

The Stoxx Europe 600 Index declined 1.06 per cent to 264.10. Germany's DAX Index lost 1.13 per cent and France's CAC 40 Index fell 1.14 per cent. The U.K.'s FTSE 100 Index retreated 1.03 per cent to 5,808.99.

'We've seen a bit of profit taking and investors are reluctant to take new positions,' said Matthias Jasper, head of equities at Wgz Bank in Dusseldorf, Germany.

'It's not really a game changer, what the politicians say these days. Everybody knows in the financial markets that the crisis hasn't ended yet.'

USD

'The economy is slowly improving, but it is definitely a halting recovery where we're not accelerating to any great degree' - Liam Dalton, president of Axiom Capital Management Inc.

U.S. durable goods orders rise less than forecast

Impact High

New orders for long-lasting U.S. factory goods rose less than forecast in February, a sign the economic recovery is facing hurdles. Durable goods orders increased 2.2 per cent from January, said the

Commerce Department on Wednesday.

'Business spending will remain a key driver of the U.S. economy, not to the same extent as last year, but still a positive force,' said Sal Guatieri, a senior economist at BMO Capital Markets in Toronto

'No doubt corporate-profit growth will slow this year compared with last.'

'The economy is slowly improving, but it is definitely a halting recovery where we're not accelerating to any great degree,' said Liam Dalton, president of Axiom Capital Management Inc. in New York.

GBP

'The slight downward revision to gross domestic product in Q4 is disappointing' - Vicky Redwood, an economist at Capital Economics

U.K. economic growth for Q4 revised down to -0.3%

Impact Medium

U.K. economy contracted more than previously estimated in the fourth quarter of 2012, Office for National Statistics data showed on Wednesday. The U.K. economic growth has been revised down to -0.3 per cent.

'The slight downward revision to gross domestic product in Q4 is disappointing, although of course this is fairly old news now and it looks as though the economy recovered somewhat in the first quarter,' said Vicky Redwood, an economist at Capital Economics.

'The data available so far for the first quarter indicate that the economy is likely to have returned to growth, but only very modestly. The PMI surveys are pointing to a meagre 0.3 per cent expansion, which would merely make up for the lost output in the final quarter of last year,' said Chris Williamson, an economist at Markit.

CHF

'The mood in the background seems to remain good' - Jean-Paul Jeckelmann, chief investment officer at Banque Bonhote & Cie.

Swiss stocks fell for a second day on Thursday

Impact: Medium

Swiss stocks retreated for a second day on Wednesday after a report showed U.S. durable goods orders increased less than expected in February.

The Swiss blue-chip index SMI, a measure of the largest and most actively traded companies, lost 0.30%, or 18.95 points, to 6,250.43. The broader Swiss Performance Index fell 0.40%, or 22.83 points, to 5,726.65.

'We are coming to the end of the quarter and some window dressing is going on,' said Jean-Paul Jeckelmann, chief investment officer at Banque Bonhote & Cie. in Neuchatel, Switzerland.

'The mood in the background seems to remain good and in the last few weeks, corrections have been very short-lived as a lot of cash still remains on the sideline waiting to re-enter the market.'

JPY

'There are concerns the market has risen too much' - Naoteru Teraoka, general manager at Tokyo-based Chuo Mitsui Asset Management Co.

Japanese shares erased Tuesday's gains on Wednesday

Impact: Medium

Japanese stocks fell on Wednesday, after the Nikkei 225 rose the most in half a year on Tuesday.

The Nikkei 225 retreated 0.71%, or 72.58, to 10,182.57. The broader Topix lost 0.92%, or 7.99, to 864.43.

'There are concerns the market has risen too much,' said Naoteru Teraoka, general manager at Tokyo-based Chuo Mitsui Asset Management Co.

'U.S. data overnight were mixed,' said Tim Schroeders, fund manager at Pengana Capital Ltd. in Melbourne. 'We are in a consolidation phase after markets put on some pretty good gains, particularly in Japan.'

Press Review

Europe

Greece pushed through the bond swap offer averting the immediate threat of an uncontrolled default and opening the way for a second rescue package.

Experts claim Spain has never been so close to default and Greece, Ireland and Portugal may need additional financial aid.

UK GDP fell faster than previously estimated in fourth quarter, ONS says

http://www.guardian.co.uk/business/2012/mar/28/uk-fourth-quarter-gdp-estimate-ons

Britain's economy was even weaker than expected at the end of last year, underlining the country's struggle to avoid another recession.

For Portugal, Moment of Truth Nears

http://online.wsj.com/article/SB10001424052702304177104577309491538614560.html?mod=WSJEurope_hpp_LEFTTopStories

Politicians in Lisbon and policy makers in Brussels insist that Portugal isn't like Greece. This spring, the country will have to prove it

USA

Ben Bernanke on February 8 reiterated the Federal Reserve's plan to keep borrowing costs near record lows until at least late 2014, despite rapid decline in unemployment rate to 8.3%.

Upbeat data point to a robust recovery of world's largest economy.

Durable goods orders hint at weak first quarter

http://www.reuters.com/article/2012/03/28/us-usa-economy-idUSBRE82Q0VN20120328

New orders for long-lasting U.S. factory goods increased only modestly in February, supporting the view that economic growth in the first quarter could be lackluster.

Investors Focus on GDP, Claims and End of Quarter

http://www.cnbc.com/id/46886972

The third read on fourth quarter GDP would normally be a ho hum event, but Thursday's report could contain some important insights about first quarter growth.

Asia & Pacific

China is suffering a major economic slowdown, as growth flags in the country's real estate, construction, steel, and other sectors.

Japan has published first annual trade deficit since 1980 putting into question how long the country can rely on exports to serve a huge public debt. Investors were extremely surprised when Japanese economy swung back to a trade surplus in February after a record deficit in January.

China's Stocks Poised to Extend Drop on Profit, Baer Says

http://www.bloomberg.com/news/2012-03-29/china-s-stocks-poised-to-extend-drop-on-profit-says-julius-baer.html

Chinese stocks are poised to extend their slump as the slowing economy hurts earnings, according to Bank Julius Baer & Co., which has about $286 billion in client assets worldwide.

China survey: Hard landing possible but not likely

http://www.marketwatch.com/story/china-survey-hard-landing-possible-but-not-likely-2012-03-28

The possibility that China will suffer an economic shock within the next three years is remote, but the risks are very real and the country may have to navigate several major hazards to avert it, according to fund managers and economists polled by MarketWatch.