Forex Fundamental Analysis

Surveys of business confidence provide an insight into future trends concerning purchasing, employment and investment since businesses will not make new commitments unless they believe that likely future profitability warrants it.

Last week’s trading was a mixed affair for the world’s major markets.

The Nikkei has risen to heights not seen since May as traders draw confidence from comments made by the Bank of Japan (BOJ) which indicate that their asset purchase programme will remain in place for the time being.

One thing has always been certain; the quantitative easing measures employed by certain central banks have always been a temporary measure that must be withdrawn at some stage.

The Organisation for Economic Cooperation and Development was established in 1961 and can trace its origins back to the administration of the Marshall plan which was put in place to rebuild Europe after World War II.

The world’s third largest economy has posted growth of 0.5% (annualised rate 1.9%) in Q3, but this shows that expansion in the economy has eased since the Q2 reading came in at 0.9% (annualised rate 3.8%).

Last week’s trading saw all of the the world’s major markets gain with the one exception of the FTSE.

The Bank of England’s target figure for inflation is 2% and if inflation comes in above the 3% level, the Governor of the Bank of England is required to write to the Prime Minister to explain why it has happened.

The very closely watched US jobs data was released on Friday and came in above analysts’ expectations.

The European Central Bank took many analysts by surprise last week when it announced that interest rates would be halved from 0.5% to a new record low level of 0.25%.

When President Hollande was campaigning for the presidency against incumbent Nicolas Sarkozy, a central platform of his manifesto was that there should be no further austerity cuts, essentially arguing that by raising taxes on the wealthiest and targeted government spending, France could lift itself out of the economic doldrums.

Last week’s trading was another mixed affair on the world’s major markets.

Evidence that the US recovery is gaining pace came in the shape of the annualised Q3 growth figure which came in at 2.8%. The value is a preliminary measure and will be adjusted, if necessary, when more data becomes available.

Greece triggered the European sovereign debt crisis by fudging the convergence data when it successfully sought to join the Euro in the first wave of members.

Notwithstanding yesterday’s piece about burgeoning factory orders (and remember that everything is relative), the European Commission has sounded a note of cautious optimism that the worst is behind us.