Snippets of the day - 18 Feb 09

Here are some events to consider before you make your trading decisions:

- Japan's Fin Min Nakagawa has finally caved in to pressure on his drunken debacle in the G7 news conference and resigned yesterday. He is known to be against printing more money as a form of monetary boost. With him now gone, and PM Aso's credibility being very weak (opinion polls of him came in 2nd lowest ever for a PM) the government now or the next might lean towards the populist route of printing more money to boost the economy. USDJPY surged higher a tad on the news.

- The BOE meeting minutes released today revealed that the board has officially decided to go the way of quantitative easing, the first in the developed world. The policy makers will submit a request to the government for it to purchase gilts (UK govt bonds) outright and pump money directly into the economy. The committee noted that cutting interest rates is a limited measure and hence is willing to take unconventional steps to boost liquidity.

The GBPUSD dropped markedly upon the news and traded just under 1.41 for a while before rebounding back up to trade at 1.4237 now (Spore time 9:39pm). I think the market may like that idea and is rewarding the move.

- GM and Chrysler asked for additional aid of up to USD 21.1 bn to tide it over until Mar 31 where they have to prove they can re-structure enough to become viable companies or face possible bankruptcy. Yes a White House spokesman said he does not rule that out, but added GM and Chrysler are 'tremendously important' to the manufacturing industry. UAW has agreed to some concessions... let's see what other positive developments might take place - successful asset sales maybe?

- Today Pres Obama will announce more details about his plan to stem foreclosures. A USD 50 bn package had been ear-marked for that. But the market should not expect too much tonight as Summers had said Obama will not go into the 'mortgage principles' of the package - whatever that means.