PKey Newsbr•nbsp;European policymakers must not tear up the rule book when launching emergency economic rescue packages, ECB President Jean-Claude Trichet said. (Reuters) /P
PEURUSD Daily: Euro continues to be the big winner against the dollar lately.nbsp; Next key Fib retracement resistance daily comes in near 13600-level.brbr(Chart unavailable.)brnbsp;br•nbsp;Japan reported its sharpest crash in business sentiment in three decades on Monday and industrial output in China grew at its slowest pace since 1999. (Reuters)/P
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PUSDCNY (Chinese yuan) Daily: Despite continued bad news on growth flowing from China, the currency has managed to gain against the buck lately, possibly alleviating concerns the Chinese may weaken the currency to help exports.nbsp; But would a weak currency matter when no one out there seems to be buying?brbr(Chart unavailable.)brbrnbsp;br•nbsp;Turkey’s economy continued to feel the impact of the global financial crisis as official figures released Monday showed gross domestic product growth slowing and unemployment rising. (AP)/P
PUSDTRY (Turkish lira) Weekly: Stabilized after a test of the high?nbsp; Or is it the calm before nbsp; the storm?brbr(Chart unavailable.)brnbsp;br•nbsp;Crude oil rose after OPEC’s Secretary-General Abdalla El-Badri said the group needs to make a “sizeable” production cut at this week’s meeting in Algeria. (Bloomberg)/P
PCrude Oil Daily: Crushed!nbsp; A bounce would be no surprise.nbsp;brbr(Chart unavailable.)brnbsp;/P
PKey Reports (WSJ):br8:30 a.m. Dec NY Fed Manufacturing Index: Expected: -26.5. Previous: -25.4. br9:00 a.m. Oct Treasury International Capital Flows: Previous: $57.2B. br9:00 a.m. Nov Industrial Production: Expected: -0.6%. Previous: +1.3%. br9:15 a.m. Nov Capacity Utilization: Expected: 75.8. Previous: 76.4. br1:00 p.m. Dec NAHB Housing Market Index: Previous: 9. /P
PbrQuotable br“People who look for easy money invariable pay for the privilege of proving conclusively that it cannot be found on this earth. /P
P Jesse Livermore/P
PFX Trading – Euro as new safe haven currency?brWe don’t think so—at least over the longer term.nbsp; But no matter what we think near- or long-term, the market likes euro compared to the other players.nbsp; The euro has bounced strongly against the US dollar.nbsp; Also, you can see euro’s relative strength in the Euro – British pound cross (at an all-time high) and the Euro – Swiss franc cross (wasn’t Swiss supposed to be the safe haven)?nbsp; /P
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PEURGBP Weekly:brnbsp;(chart unavailable.)/P
PEURCHF Weekly:brnbsp;(Chart unavailable.)/P
PNo doubt, of the central banks, the European Central Bank at the moment is acting most “central bank-like.”nbsp; What we mean is that Mr. Trichet, President of the ECB, seems most publicly concerned about stuff like fiscal responsibility and running out of bullets by cutting too aggressively.nbsp; Adding to that, an ECB talker was trying to put on a good face about 2009, suggesting the Eurozone would be emerging from all this mess by the second half of the year.nbsp; So he is doing come cheerleading too.nbsp; /P
PBut, we are concerned about the euro safe haven argument for a couple of reasons:/P
PFirst, despite our general agreement with Mr. Trichet about his monetary and fiscal views, we wonder if his reluctance to ease further and faster may not add to the weight of the problems in Europe.nbsp; Consider that member countries are busting their budgets in an effort to drive demand, and ECB stinginess on rates, or lack of monetary stimulus, may only exacerbate the fiscal strains Mr. Trichet is concerned about—and widen already widening member country bond spreads.nbsp; Plus, we think the emerging markets of Europe could be the Achilles heel for the euro; they’re starving for liquidity even more than the larger euro members.nbsp; /P
POur second concern is Germany.nbsp; Europe’s real engine of growth is still seen as being in relatively decent shape.nbsp; But, we don’t think that will last too much longer.nbsp; Germany after all is an export powerhouse. We believe the exact same dynamic hitting China—no buyers—will hammer German growth.nbsp; /P
PHowever, all that said, we remain open.nbsp; Price action is always the final arbiter no matter how we spin our macro story. /P
PJackamp;JR/P

Last 5 posts by Jack Crooks

• Only Gold Is Winning the Ugly Contest - February 26th, 2009
• Stocks AND Dollar to Rally in the First Half? Keep Hope Alive - January 6th, 2009
• We’re Bullish on the US Dollar Today ... and Tomorrow! - January 5th, 2009
• Can we rest? Gold may lead the way. - December 22nd, 2008
• A super deal on the U.S. dollar - December 20th, 2008