Yesterday’s surprise speech by Treasury Secretary Timothy Geithner spooked the markets as it was completely unscheduled and his remarks about the long term future of the US dollar as the world’s currency reserve sent the currency into a spin.  This was seen as a 100 pip spike in a 10 minute trading session in the euro to dollar pair.  Clearly, Mr Geithner needs to learn how to choose his words more carefully and think twice about ambushing the markets in this way.

Today’s (scheduled!!) fundamental news on the economic calendar began in europe earlier with the GFK consumer sentiment index being released which came in slightly below at 2.4 versus a forecast of 2.5.  The index is based on a survey of around 2000 consumers who are asked to rate the current economic climate based on their personal views of the current financial situation.

The main news out later is in the US with the release of the unemployment claims followed by final GDP figures along with the GDP price index.  The first of these is expected to come in at around 650k and is the number of people filing for unemployment insurance on the week.  Although generally considered a lagging indicator it is, nevertheless, an important indicator of economic health.   Week on week figures suggest little change.  The final GDP figures are the least important of GDP results with the Advance being the most important.  Those released today are simply a confirmation of what the market already knows and therefore tend to have less of an impact.  The forecast is for -6.6% against a previous of -6.2%.  The GDP Price Index is also released at the same time and represents the change in price of all goods and services which are included in the GDP data.  Forecast is as for the last quarter at 0.5%.

At 14.00 GMT we have an appearance by Mr Geithner before the House Financial Services Committee where he is due to testify on “Financial Market Regulation” (ha ha) – the words horses, stables and doors spring immediately to mind.  Quite what market reaction will be is anyone’s guess given his less than stellar performances to date – Mr Geithner is rapidly turning into Henry Paulson Mark II.  Later in the afternoon we have yet more speeches, this time from Jeffrey Lacker, an FOMC member who is speaking at a Chamber of Commerce conference in Charleston.

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