The good mood wasn’t distorted by another nightmarish payrolls, as investors awaited presidential plans to be approved in the Congress. This is going to be a major event this week. First, crucial votes are expected to take place in a Senate. Secondly, after a fiscal plan is passed, Treasury chief will outline administration’s ideas on the new TARP program (probably creation of so called bad bank to purchase toxic assets). The speech is awaited on Tuesday. On the macroeconomic front one should focus on the US retail sales data due on Thursday and secondly on the US trade balance and consumer confidence out on Wednesday and Friday respectively. At the end of the week a release of advance GDP in the euro zone will be published and the expectations are grim – markets await a contraction of 1,3% from the third quarter. However, if the Congress passes the plan smoothly there is a chance of a rebound to continue. This could have implications for the USDJPY which is on the rise and highest in a month and also EURUSD which is clearly undecided. The first one faces resistance levels of 92,40 and 94,62 and the latter one of 1,30 and 1,3330. Supports are on 90,75 and 1,27 respectively. Copper is also worth mentioning – good news from the Congress and new 2-month highs may be enough to warrant some more price increases.

Przemyslaw Kwiecien Chief Economist