Majors Rise On Positive Equity Markets

Overall, the dollar continued to be sold during the European session, extending the moves first seen during the Asian trading hours. The majors where helped by positive European markets and U.S. futures, which indicate that traders are looking for quality rather than safety.

The Euro (Eur/Usd) rose tonight for the first time in the last four days. The pair gained 90 pips during the Asian session, but retraced some parts of the gains during the later hours of the trading session. In the European session, the euro struggled to take out Monday's high, at the 1.33 area.

After rising in February for the first time since June 2008, the Euro-area Flash CPI continued its downward path in March. Until now, the declines in the CPI read were led by the crude oil sub-index, but the Flash estimate does not provide a detailed breakdown of the CPI's components. The number of unemployed persons looking for a job in Germany for the month of February rose by 69K, more than what analysts had expected

The Pound (Gbp/Usd) traded in identical fashion with the euro during the Asian session. The pound rose to TheLFB R1 (1.4335) during the Asian session, but could not push anywhere higher. From there, the pound moved lower, but re-tested the resistance level during the European trading session.

The GfK consumer confidence for the month of March fell to -30 from a -35 reading in February. Consumer confidence in the U.K. has risen to its highest level since May of 2008 but still remains low overall. This may be partially attributed to lower interest rates for many families.

The Aussie (Aud/Usd) gained 100 pips during the Asian session, testing the 0.6900 area. However, at that area the pair encountered resistance and moved lower before gathering additional momentum. The aussie continued to struggle with the same resistance area in the first part of the European session.

Private sector credit in Australia has slowed sharply, falling to 0.0 percent. This is the lowest level the index has reached since 1994 due to crumbling household wealth while consumer and businesses scale back on borrowing.

The Cad (Usd/Cad) retraced almost half of the gains made on Monday, declining 100 pips during the overnight session. Additionally, the pair traded between the 50 and the 100-day simple moving average during the overnight session. Later today, an economic report is expected to show that the Canadian economy contracted 0.6% in January.

The Swissy (Usd/Chf) fell 80 pips, after it tested the area formed by the 20 and the 100-day simple moving averages during the Asian session. This comes, after the swissy formed a doji-star yesterday, denoting market indecision.

The Swiss Consumption Indicator continued to decline in February. The indicator declined to 0.89, showing the prospects are becoming increasingly gloomy. Due to the economic downturn, unemployment is set to rise in the coming months, which will have a negative effect on consumer spending

The Yen (Usd/Yen) advanced aggressively during the Asian session, but traded sideways during the European trading hours. The pair rose more than 100 pips during the first part of the trading day, but since then has struggled to take out TheLFB R1 (98.50)

Japans unemployment rate, seasonally adjusted, increased to 4.4 percent in January. The loss of jobs and high unemployment rate is at the highest levels in more than 30 years. Global sales have declined at record pace which has forced corporations in the exporting industry in Japan to cut hours and workers. The Japanese manufacturing PMI came in slightly higher than the previous reading of 31.6 to an actual 33.8 in February. Meanwhile the manufacturing output rose to 25.9 from a 22.7

Overnight Markets Trade Back In The Green Territory

Current Futures: Dow +58.00, S&P +6.30, NASDAQ +12.00

European Trade: European equity markets rose, as did the U.S. futures during the overnight session. Asian equity markets closed the trading session lower, even though the major indexes had posted strong gains by the middle of the session.

Only three companies declined in the U.K.'s Ftse index. Banks and Commodity stocks led the gains, while the retailed Marks & Spencer rose almost 9% after posting better than expected sales. On the German Dax, the car-manufacturers were trading mixed, while banks rose. In particular, Commerzbank rose 13% in the first few minutes of trading, after a similar decline yesterday.

Headlines continue to appear about GM and Chrysler's fate today. In a CNBC interview, GM's CEO Fritz Henderson said that bankruptcy might be the best option for the carmaker. However, Henderson said he would prefer to restructure the company outside of the court, and avoid Chapter 11.

Chrysler might also be very close to bankruptcy, since most analysts say that the deadline to reach an agreement with Fiat, in about a month, is not enough time. Additionally, Chrysler has to agree on new labor costs with the union, and has to renegotiate much of its debt before the deadline expires. This will be very hard to overcome, since, in bankruptcy cases, the debt holders are the first to be re-paid by selling the company's assets. President Obama's task force notes that an “expedited bankruptcy project” might be the only chance Chrysler has.

In Europe, Ireland is the second country that lost its triple-A debt rating since the beginning of January, following Spain. Standard & Poors reduced the country's debt rating to AA+, with a negative outlook as the public finances keep worsening. Both Ireland and Spain were hit very hard by the credit crisis, and now they are facing huge housing bubbles. Ireland's economy contracted a massive 7.5% in Q4, the country's first recession since the early 1980's.

Also in Europe, the Ukraine has ruled that local banks should buy and sell the national currency, hryvnia, at a rate set by the Senate. In addition, the Ukraine has imposed strict capital controls, in order to overcome strong cash outflows, which destabilized the local currency and the economy. Even though the central bank depleted one third of its reserves to stop the hryvnia decline, the currency has plunged almost 40% in the last few months.

Tonight, the Nikkei fell 126.55 points (1.54%) to 8,109.53. The Australian S&P/Asx shed 22.30 points (0.62%) to 3,582.10. The U.K. Ftse rose 90.75 points (2.41%) to 3,853.66, while the German Dax gained 52.23 (1.31%) to 4,041.46

Crude oil advanced in the overnight session, retracing some of the declines seen yesterday. Crude oil for April delivery rose $0.50 to $49.90

Gold rose, helped by positive equity markets. Bullion for immediate delivery gained $5.00 to $922.70.

Written by TheLFB Trade Team, © 2007-2008 LFB Services, LLC. All rights reserved. http://www.TheLFB-Forex.com

TheLFB Risk Disclaimer can be found at http://www.thelfb-forex.com/content.aspx?id=174.

The Copying, Broadcast, Republication or Redistribution of TheLFB Content is Expressly Prohibited Without the Prior Written Consent of LFB Services, LLC.