Oscars 2012 Red Carpet: Who Was the Best Dressed Actress? Take Our Poll [PHOTOS, POLL]

Oscars 2012 Red Carpet

Priced to go bust?

A glance at 100 global mining stocks that have lost 90% and more of their market value, plus a glance at patterns and lessons.

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USD Falling Sharply ahead of the FOMC. What will Bernanke and Co Have to Say?

Risk appetite still a key USD driver it seems, regardless of FOMC outcome today.

Headlines

* US Weekly ABC Consumer Confidence out at -47 vs. -48 expected and -48 the previous week

* Japan BoJ left Target Rate at 0.10% as expected

* Switzerland Jan. Retail Sales rose 1.2% YoY vs. 3.6% in Dec.

* UK Feb. Jobless Claims Change was +138.4K vs. 84.8k expected

* Canada Jan. Wholesale Sales fell -4.2% vs. -2.7% expected and -3.1% in Dec.

* US Feb. CPI rose 0.4% MoM vs. 0.3% expected and ex Food and Energy rose 0.2% vs. 0.0% expected

* US Q4 Current Account Balance out at -$132.8B vs. -$137.1B expected

THEMES TO WATCH - UPCOMING SESSION

* US Weekly Crude oil and Product Inventories (1430)

* US FOMC Rate Decision and Monetary Policy Statement Release (1815)

* Australia RBA's Edey to Speak (2050)

* Australia Q1 Westpac-ACCI survey of industrial trends (0000)

* Australia Q4 Dwelling Starts (0030)

* Japan BoJ Monthly Report (0500)

* Japan Feb. Department Store Sales (0530)

The Jobless claims number in the UK rocketed to a record 138.4k, by far the worst tally since record keeping for claims began in 1971. The prior month's data was also revised upward by almost 20k, so it puts the total tally of lost jobs at about 158k, about equivalent to a US nonfarm payrolls drop of 800k, if we adjust for the UK population size. This terrible number comes as German interest rates have risen sharply in recent days, a combination that is putting enormous pressure on the pound, where the market will look for the BOE to step up its unconventional monetary policy efforts while yields look more attractive elsewhere. The latest move saw EURGBP pulling above 0.9300 again, to the highest levels since a run to 0.9500 in late January. The BOE minutes also show an aggressively dovish posture by the BOE, with a willingness to step up gilt purchases if the first round was not having the desired effect.

In other economic news, the Bank of Japan left its 0.10% rate untouched overnight, but announced a stepping up of government bond purchases from banks and a new infusion of capital into the private sector in the form of ¥1 trillion in subordinated loans to banks. The US CPI number was out higher than expected and makes the deflation argument a bit tough at the moment, especially as oil has moved back toward the 50 dollars a barrel level and with US PPI core prices still at elevated levels. The US Q4 current account deficit was the smallest in five years as the world continues to unwind global imbalances.

Besides the sharp move in the pound, the market was treading water earlier today. But then just after the US inflation data, EURUSD spilled above the 1.3100 area resistance on possible stop running before the main event: the FOMC monetary policy announcement. The uncertainty surrounding this event is pronounced and adding to the potential for volatility, as almost any outcome represents a surprise with no strong consensus on what the Fed will have to say. There is a menu of options available for the Fed to choose from in the quantitative easing category and we are likely to see some kind of policy statement adjustment showing the Fed is doing all it can to further ease credit pressures and support the economy. Most, including us, consider it unlikely for the Fed to move to all out debt monetization via treasury buying at this time and instead look for increases of existing efforts and possibly the signaling of moves like those made by the Bank of Japan recently, which has moved to outright purchases of corporate debt. If the Fed decides to leave well enough along today (i.e., staying the course and underlining hopes for current programs and the TALF launch), this is supportive of the dollar, all else being equal (see below paragraph for what all else entails....). If the Fed announces new QE measures short of treasury buying and/or if treasury buying is mentioned in such a way that suggests the Fed is raising the odds for a move in that direction, this is the more USD bearish outcome.

Overall, however, it still seems that the weaker USD is a reflection of elevated risk appetite. Emerging market currencies are storming back, bund yields are higher, the VIX is down touching its 200-day moving average for the first time since the weeks before the demise of Lehman Brothers. And gold continues to tumble to new multi-day lows despite the falling dollar of the last week. Our conviction is that eventually, strong risk appetite is misplaced, but the timing of a return to risk aversion is the big question as we are so close to big intermarket pivot levels. A spillover higher in US 10-year notes on a less dovish than expected Fed, for example, and continued rally in equities in the short term, and we could have EURUSD testing that 200-week moving average toward 1.3375 rather quickly. As long as USD weakness is associated with risk appetite, however, the potential for a comeback further out remains high.

EUR/JPY - Euro Yen, American Session - 18/03/09

Oscars 2012 Red Carpet

GBP/USD: Cable returns above 1.3960 on recovery after U.S. data

FXstreet.com (Barcelona) - The Pound has recovered partially after having posted a fresh intra-week low at 1.3845, and, after better than expected U.S. current account and CPI data, Sterling has posted a 100 pips rally to trade above yesterday's low at 1.3960.

On the upside 1.4027 and 1.40 70 are the closest resistance lines, and above here 1.4138, Mar 17 high. Below 1.3960, the Pound could drop to 1.3875, and if that support is broken, selling pressure could increase driving the pair down towards 1.3800.

On the longer perspective, the Pound is trading on a downward trending resistance line off Mar 16 high at 1.4235. The Pound should have to consolidate above 1.4025 and then grow past 1.4070 in order to establish a bottom at 1.3843.

CAD Wholesale Sales Declined In January As Global Economy Weakened

Release Explanation: Measures the total value of sales at the wholesale level. A rising trend has a positive effect on the nation's currency because increased sales at the wholesale level are a good indication that there is high consumer demand at the retail level. Trade Desk Thoughts: According to Statistics Canada, wholesale sales declined 4.2% to $41.1 billion in current dollars in January. Lower activity in the automotive products sector was a major factor behind the decrease. Excluding the automotive products sector, wholesale sales fell 0.9%. In terms of the volume of sales, wholesale sales also fell 4.2%. The decline in sales reflected both lower export demand for Canadian goods, a significant part of which flows through wholesale markets, and weaker sales in Canada. In January, four out of seven sectors, which accounted for about two-thirds of total wholesale sales, posted declines. The largest decrease came from the automotive products sector, which fell 22.9% to $5.0 billion in January and accounted for approximately 80% of the total decline. Sales of motor vehicles fell 30.0% to $3.4 billion, its lowest level since August 1996. Weakness in consumer demand in both Canada and the United States were the main contributors to the decline. Other sectors that declined included the building materials sector (-6.2%) and the machinery and electronic equipment sector (-2.8%). The largest increase in January occurred in the other products sector, which includes a wide range of wholesaling activity ranging from recycled metal, recycled paper and paperboard, stationery and office supplies, and other paper and disposable plastic products wholesalers, to agricultural feed and seed wholesalers and agricultural chemical and other farm supplies, chemical (except agricultural) and allied products, and all other wholesalers. Sales in this sector increased 5.1% in January, following an 8.4% drop in December. The main contributors were increases by agricultural chemical and other farm supplies and seed wholesalers. This was the first increase in this sector since August 2008. Forex Technical Reaction: The cad (USD/CAD) was just off its lowest level of the session as crude futures declined by 91 cents on the day.

Current Account Deficit Declined More Than Expected In Q4 2008

Release Explanation: This is a nation’s total exports of Goods, Services, and Transfers, deducted from its total imports of them. (Not to be confused with the Trade Balance that looks solely at imported and exported Goods). Current Account Balance calculations exclude transactions in financial assets and liabilities. It is a comprehensive accounting review of a nation’s Global trade that includes the Trade Balance in its figures. An increase or decrease in the Current Account may reflect an economy’s strength or weakness, but only over a long period of time as a trend builds. There are many components of this report that can cause fluctuations, including commodity costs, currency valuations and the cost of war. This is a culmination of the reports that have preceded it. A currency will be impacted by this report mainly as a knee-jerk reaction of Institutions re-aligning existing positions. The longer term trend will normally take time to reverse and therefore take time to impact currency valuations. Trade Desk Thoughts: The current account deficit decreased to $132.8 billion during Q4 2008, from an upwardly revised $181.3 billion the previous quarter, the Commerce Department said today. The third-quarter deficit was originally reported as $174.1 billion. That was smaller than economists' expectations for a shortfall of $137.1 billion for the period, and the lowest deficit since Q4 2003 For all of 2008, the deficit totaled $673.3 billion, down 7.9% from the $731.2 billion deficit in 2007. Fourth-quarter imports plunged to $464.6 billion from $562.5 billion, pushed down by declines in nearly all major commodity categories. Exports also dropped, as the U.S. recession spreads abroad and hurts sales of American goods overseas. Fourth-quarter sales fell to $290.5 billion from $346.3 billion. While U.S. trade of goods was at a deficit, services trade remained in surplus. But the surplus fell to $33.7 billion from $35.4 billion in the third quarter. Offsetting the overall current-account deficit was a $36.5 billion surplus of income, up from a $29.6 billion surplus in the third quarter. That occurred as foreign investors rushed into the safety of U.S. debt as stock markets around the world plunged in the wake of what's been called the worst financial crisis since the Great Depression. The trade report showed that foreigners bought a net $89.5 billion of U.S. Treasury securities during the quarter, up from $89.1 billion of purchases in the prior three months. Foreigners sold $3.7 billion worth of U.S. corporate bonds during the quarter, after net sales of $35.5 billion the previous quarter. They sold $21.4 billion of agency bonds, down from $58.8 billion in third-quarter sales. Meanwhile, foreigners sold a net $3.6 billion of U.S. stocks, after buying $2.9 billion in the third quarter. Foreign direct investment in the U.S. increased $80.6 billion, after rising $57.3 billion in the third quarter. Forex Technical Reaction: S&P futures were trading lower by 0.8% on the session, but the euro was reaching its best level of the session against the dollar.

AIG CEO defends bonuses as public fury mounts

The head of AIG said on Wednesday the cold realities of competition compelled the insurer to pay $165 million in bonuses, and acknowledged that bailout-weary Americans' patience was running thin.

American International Group Inc has come under intense fire from the public, politicians and President Barack Obama for accepting up to $180 billion in government aid and then handing out multimillion-dollar bonuses, but Edward Liddy said the best hope for recouping taxpayer money was to keep running AIG as a business.

No one knows better than I that AIG has been the recipient of generous amounts of government financial aid, he said in remarks prepared for delivery to a congressional committee.

We have been the beneficiary of the American people's forbearance and patience. And we are acutely aware not only that we must be good stewards of the public funds we have received, but that the patience of America's taxpayers is wearing thin, he said.

Fury over the bonuses threatens to undermine Obama's efforts to solve the credit crisis and pull the economy out of a deep recession. Many voters view the financial rescues as free handouts to wealthy executives who made bad decisions, and the fat bonuses -- although relatively small compared to the government's $700 billion bailout fund -- have fueled that anger.

The situation has put Obama in a tight spot as he tries to strike the right balance between sharing the public's outrage and keeping his focus on the bigger issue of repairing the economy. Some economists have warned that the bonuses could become a distraction that delays recovery efforts.

AIG has argued that the payouts were necessary to retain top employees with the specialized knowledge to dispose of $2.7 trillion in complex securities that ended up dragging the company to the brink of collapse last year.

Liddy, who took over as chairman and chief executive six months ago when the government first stepped in to try to stabilize AIG, said the company had made mistakes on a scale few could have ever imagined possible.

That stark admission did little to dull the anger directed toward him on Wednesday. Senate Republican leader Mitch McConnell called the bonus situation an offense to the taxpayers, and we're going to get to the bottom of it, even if the Department of the Treasury hasn't.

U.S. Treasury Secretary Timothy Geithner said late on Tuesday that AIG would have to promise to compensate taxpayers for the bonuses as a condition for receiving a planned $30 billion expansion of its bailout.

But Geithner said anger toward Liddy was unjustified because he had joined AIG at the government's behest and the problems there predated him.

(Additional reporting by Corbett Daly and Jeremy Pelofsky; Writing by Emily Kaiser)