United States President Barack Obama proposed overhauling the tax code to make it simpler for working-class Americans and limit tax breaks for the wealthiest. He proposed ending tax subsidies for housing, health-care, retirement and child care for those with yearly incomes exceeding $1 million. In an effort to keep manufacturing jobs in the U.S., He proposed ending tax breaks for companies that move their operations overseas. He said a tax credit should be created for companies that close operations abroad and bring jobs back home. He also called for the nations wealthy to pay more in taxes as part of a bargain to restore fairness to the nations. Economy and rein in the deficit, the law should make sure million dollar earners pay at least 30% in taxes and for development of domestic natural gas reserves and alternative energy sources, and providing American workers with better training.
S&P could assign Greece a selective default rating by the fall, Greece may eventually return to the private market for financing if the government can succeed in reforming its economy and balancing its budget. While UK won’t pull at the underlying elemental fundamental strings of the global financial markets like the FOMC has the potential to, it can nevertheless significantly alter the strength and bearing of the sterling, the two different aspects of the pound’s health are growth and financial support. The growth figures are the easiest to interpret. The consensus is for a 0.1 percent contraction in the economy through the final months of 2011 which confirms the fears of various policy makers and economist that the UK is tipping into recession while the taint of financial crisis is spreading from the Euro Zone. In Germany officials said the country’s economic upswing has only come to a temporary halt, while growth may stagnate in the first three months of the year, economic dynamism should return in the course of the year. The International Monetary Fund (IMF) yesterday forecast growth of 0.3 percent in 2012. While that’s lower than its previous estimate, it compares with contraction of 0.5 percent predicted for the euro region. Even though policy makers are still grappling with fixing the region’s debt crisis and the risk of a credit crunch is not yet banished, Germany’s biggest export partner unexpectedly rose this month. European Central Bank officials said that 2012 will be a much better year for the Bloc.
In Asia the biggest move through Yesterdays session was the tumble form the Japanese yen. It is tempting to saddle this with the easy label of manipulation and move on, but that would put on the wrong path. Bank of Japan lowers its growth forecast and while the Ministry of Finance confirmed its first annual deficit in 31 years. This is a serious issue for a trade economy. For the upcoming session, USD/JPY traders should be watching at the QE3 interest surrounding the Fed decision. If it doesn’t pan out, it could prove a long overdue bullish driver. Even so, with the population declining since 2006, indicating a trend rate of economic growth of 1 percent in coming years, policy makers are under pressure to take steps that avert a crisis of confidence in the nation’s debt. The Officials said yesterday total outstanding borrowing will probably reach 985.4 trillion yen in the year ending March 2012; Money flowing out through trade may erode investor’s confidence that Japan’s creditor status makes it a haven for investment, complicating the government’s efforts to manage the world’s largest public debt. The country is shrinking population means it will need to turn increasingly to foreign investors to buy its bonds.
GOLD
Gold is currently trading at 1669 and it is not gaining strength to rise past strongly above its Resistance at 1680. The outlook is mixed. The support levels are at 1640, 1627 and the resistance levels are at 1684, 1696
EUR/USD
EUR/USD is currently trading at 1.3030. After an early dip through the last European session, the pair was again supported to end the day in positive territory and not losing focus on next resistance area at 1.3085, if the market is unable to overcome last downtrend will remain in place. The buying dips are favored. The Support levels are at 1.3003, 1.2872, 1.2835 and the Resistance levels are at 1.3051, 1.3083, 1.3142.
USD/JPY
USD/JPY is currently trading at 77.94. A cloudy economic growth forecast by the Bank of Japan, While price still has room to run higher until faced with 78.30/40 area, in this case a deeper movement towards the 77.30 area could be expected. The Support levels are at 77.64, 77.32, 77.01 and the Resistance levels are at 78.03, 78.23, 78.52.
