the Feds had loudly said they will start purchasing $300 billion in long-term treasury securities along with boosting their purchases of agency debt and MBS, those purchases should be able to prop up sales in the housing market once again.

The US dollar sank against majors, where it fell against the Japanese Yen to trade currently at 95.55 levels, heading toward the lowest since 8 weeks against the Euro where it trading at 1.3434 levels, but it managed to gain back some of the losses seen yesterday against the British pound as its currently trading at 1.4211 levels.

That’s a clear announcement that the prolonged recession in the world’s leading economy had hammered there growth badly and irritated the levels of unemployment; leading it to bleed more. The surging unemployment rates to 8.1% will surely continue to weigh on economic growth, where according to the feds Chairman, the contraction will continue this year with some expectations that a recovery would start in the upcoming year.

The Fed added that they would extended their balance sheets by purchasing $750 billion of agency mortgage-backed securities taking their balance up to $1.25 trillion, this attempt would pump credit into markets.

Market participants are mixed up, they don’t really know how to interpret this data, whether to look at it positively or negatively. If we want to look at it in an optimistic point of view we say that the feds are not standing still and interventions are taking place in order to bolster markets, but on the other hand this emergency aid is increasing analysts’ fears of deflation, where the United States now face this tremendous demon.

The Fed and other central banks seem to have found the solution in quantitative easing which came after zero interest rates proved to be ineffective and probably other central banks will follow the lead of the Feds, the BoE and the BOJ in aggressive easing monetary policy in addition to quantitative easing, which constitutes the most unorthodox measures undertaken so far ever since the credit crunch started back in 2007.

The weekly initial jobless claims should continue to signal the ongoing severe weakness in the U.S. labor market, as expectations signal that 655,000 applications were handed last week, while the continuing claims are expected to rise to 5.323 million from the prior estimate of 5.317 million.

Also the leading indicators will be released for the month of February, as after the surprising rise reported back in January of 0.4 percent, the leading indicators are expected to decline by 0.6 percent in February, as tightened credit conditions and rising unemployment continued to weigh down on economic growth.

Meanwhile the Philadelphia Fed index is expected to continue showing declining activity, as the index is expected to drop to -39.0 from the prior estimate of -41.3, activity in all sectors of the world’s largest economy continue to be subdued, as worst financial crisis since the Great Depression continues to weigh down on economic growth all around the globe.

Moving on to Europe, as some fundamentals will be released today from the U.K., as public finances are expected to rise 4.5 billion pounds from the prior drop of 25.1 billion pounds, while public sector net borrowing is expected to rise 8.3 billion pounds following the prior reported drop of 3.3 billion pounds back in January. Also M4 money supply is expected to have risen by 1.4 percent down from the prior estimate of 2.5 percent, while annualized M4 money supply will be also released today.

The U.K. will also release their CBI industrial trends for the month of March, the index is expected to come at -55 which would be a slight improvement from the prior estimate reported back in February of -56.

Meanwhile Switzerland will release their ZEW survey for the month of March, as the expectations index will be released today, Switzerland released today their trade balance for the month of February, the trade surplus dropped to 0.73 billion CHF from the prior revised estimate of 1.99 billion CHF.

Canada will release today their consumer price index for the month of February; CPI is expected to rise by an annualized 1.0 percent following the prior rise of 1.1%, while CPI is expected to have risen by 0.3% on the month following the prior drop of 0.3%. Core CPI is expected to have risen by 0.1% following the prior drop of 0.4%, and annual core CPI is expected to have risen by 1.5% only down from the prior estimate of 1.9%.