on the other hand the Fedâ€™s Chairman Ben Bernanke reassured investors that they will not let any financial institution fail, which ignited confidence among investors as stocks indices rallied more than 5 percent.
Investors are now optimistic that financial institutions can put the worst of the credit crisis behind their backs now after more than $1 trillion of losses and write-downs among the global financial sector, yet itâ€™s rather too soon to judge since other sectors are now feeling the heat from the worst financial crisis since the Great Depression.
As for todayâ€™s fundamentals, Germany which represents the euro zone largest economy released today their producer prices for the month of January, prices dropped 1.2 percent following a revised drop of 0.8 percent back in December and the estimate was well below median estimates of a 0.1% drop only. Meanwhile producer prices rose 2.0 percent compared with a year earlier down from the prior 4.0 percent rise and also well below median estimates of 3.4%.
Germany will also release their factory orders for the month of January; orders are expected to have dropped by 2.0 percent in January following the prior drop of 6.9 percent, while compared with a year earlier factory orders are expected to have fallen by 28.3% following the previous 25.1% drop.
The estimates speak for themselves as falling domestic and global demand amid the ongoing recession and the worst financial crisis since the Great Depression continues to weigh down on economic growth in Europeâ€™s largest economy, the German economy continues to fall deeper in recession inline with other major economies within the euro zone and around the globe as well.
Moving on to Europeâ€™s second largest economy, the U.K. economy is also experiencing recession amid the ongoing financial crisis, as further tightening in credit conditions, rising unemployment, and falling home values continue to suppress economic growth in the U.K.
The U.K. will release their trade balance for the month of January, the visible trade deficit is expected to have widened in January to 7.50 billion pounds from the prior deficit of 7.367 billion pounds, while the trade deficit with Non-EU countries is expected to have widened to 4.40 billion pounds from the prior deficit of 4.214 billion pounds, and the total trade deficit is expected to have widened to 3.70 billion pounds from the prior deficit of 3.611 billion pounds.
The U.K. trade deficit continues to widen despite the huge drop in the Poundâ€™s value, as falling global demand diminished the benefits of the falling value of the currency and accordingly the U.K. exporting sector continues to be hampered inline with the global exporting sector.
The U.S. will be releasing their weekly MBA mortgage applications which dropped by 12.6 percent in the prior estimate, as the ongoing drop in home values and rising foreclosures continue to suppress activity in the housing sector, which is undergoing the worst slump since the Great Depression.
The U.S will also release their monthly budget deficit for February, the budget is still expected to remain inflated over the course of this year, as the government continues to support the economy through increased spending in order to spare economic growth in the worldâ€™s largest economy which continues to fall deeper in recession.
Also the Reserve Bank of New Zealand will announce today their interest rate decision, and the RBNZ is expected to cut its benchmark interest rates down by 75 basis to 2.75 percent, as the New Zealand economy continues to suffer the aftermath of the worst financial crisis since the Great Depression.
Also Japan will release later today their final estimate for GDP during the fourth quarter of 2008, where the economy is expected to have contracted by 3.5 percent following the prior estimate of a 3.3 percent contraction, while the economy is expected to have contracted by an annualized 13.4 percent following the prior estimate of a 12.7% contraction.