Archived IMT (2011.02.03)

BERNANKE CAN BE DOVISH BUT While JC Trichet will continue to acknowledge creeping inflationary pressures without hinting at any rate hike, Ben Bernankes speech (19:30 GMT) shall insist on reiterating the need to preserve QE2 until June. Reporters will likely ask Bernanke over whether QE2 will be completed despite improved economic data. Bernanke will not budge and the US dollar will probably reverse some of the advances posted after London trade. While I mentioned in the previous IMT that fresh pullback in GE-UK 2 year spreads remained a long term negative for EURGBP, WATCH TODAY how GERMAN-US TWO year yield spreads have lost 18 bps 0.65%. AUDUSD refusing to join EURUSD and GBPUSD downside after better than expected trade data as well as current bounce in gold and silver. STAY ALERT for TOMORROWs US jobs report. The unemp rate fell by 0.4 pts to 9.4% in Dec while payrolls rose to 103K from 71K. Will the slowdown in ADP to 187K from 247K predict a weak NFP between 90 and 110K? More importantly , will it prevent S&P500 from closing above 1307? Note how USD pushed higher during US trade despite stocks having finished higher.