Rate Decision Day

Daily Forex Fundamentals | Written by Crown Forex | Nov 06 08 08:35 GMT |

Major Market Movers: Rate Decision Day Two Central Banks Rate decision are today's main highlight, the European Central Bank along with the Bank of England are considering slashing rates for the second time in a month. The prolonged Credit Crisis had managed to cripple the overall growth in those two major economies which obligated policy makers to continue slashing rates. Since the beginning of the turmoil Trichet the ECB chairman was stubborn enough to resist cutting rates even when most indicators clearly indicated that growth will head south, the upside risks to price stability was the main reason behind it. But now we all saw how those upside risks were dragged down by the falling growth levels. No more reasons for not cutting rates, inflationary pressures are easing the CPI flash estimate for October inched lower to 3.2% from the previous 3.6% heading down to the ECB comfort Zone. So based on that we expect to see a 50 basis cut taking the fifteen economies rates down to 3.00%. All fifteen economies are suffering, growth are crippled heavily, Spain the fourth European leading economy is facing the worst recession after the housing boom had shifted into a doom, banks fear bankruptcy as borrowers are no longer in shape of paying back their debt. The issue diffused to other sectors of the economy as now most the manufacturing sector is tumbling along with others; due to this malfunction in Spain's flow the unemployment surged to the highest in years threatening to diffuse in the overall zones growth. Also the Bank of England will take the same steps; markets foresee fifty basis points cut later today, taking their benchmark rates to 4.00%. They need this cut; UK almost fell in the same trap like the United States, destruction took place in their housing sector where prices reached to the lowest in 1991. Confidence deteriorated, manufacturing sector stalled, the normal activity in the Royal lands is crippled, it's an agony to all policy makers, Mervin King is under spotlight he has to move in a faster pace in order to mitigate the endless turbulence in his economy, slashing rates along with intervention that's only that would hold up parts together. All this fear prevented the European indices yesterday from tracing the United States and the Asian stocks markets, as this fall was diffused to today's trading; Dow Jones euro Stoxx 50 fell since the early morning with more than 3.0% and the French CAC 40 index also lost more than 3.0% and the finally the German DAX index fell 2.91%. On the other hand we have got some data to be released from the United States as we are getting ready to the Non-farm payroll reading which will be out tomorrow. According to estimates the Non-farm productivity will plunge to 0.7% from the previous 4.3%, also the initial jobless claims might be rising to higher than expectations along with the continuing claim. Dear reader lets just wait to see what would those two Central Banks decision will turn out later today, hopefully to would turn out to be a good step in mitigating their destructed economies. Crown Forex disclaimer:The above may contain information for investors/traders and is not a recommendation to buy or sell currencies, gold, silver & energies, nor an offer to buy or sell currencies, gold, silver & energies. The information provided is obtained from sources deemed reliable but is not guaranteed as to accuracy or completeness. I am not liable for any losses or damages, monetary or otherwise that result. I recommend that anyone trading currencies, gold, silver & energies should do so with caution and consult with a broker before doing so. Prior performance may not be indicative of future performance. Currencies, gold, silver &energies presented should be considered speculative with a high degree of volatility and risk.