Market Preview

            Expect range trading until Thursday, because so many market moving events take place in one day.  Blame the long weekend, but if we don’t play the news correctly the weekend could be very long indeed.  The major news for Thursday is the ECB’s rate decision; expect the following commentary to be picked apart extensively following the decision.  The hike is almost a given, as it has already been priced in the market.  Trichet will most likely explain that inflation within the EZ is his main concerns.  The ECB is viewed as the world’s hawk, and they are poised to defeat the inflation beast.  Prior to the decision Swiss CPI numbers come out, as well as EZ retail sales.  Expect the CPI to be high and exceed expectations, and expect retail sales to be in line with expectations.  In short the jump in CPI will move the market, because inflationary fears will seep in.  While the retail numbers will not be horrible and not signal a contraction but it will indicate modest growth in tune with expectations. 

              Shortly after US unemployment data comes out which is likely to be larger than expected, the market moving non farm payrolls follows and it may shock.  The growth of the past quarter was almost entirely export driven.  This sector of the economy must compete on a global scale, and because of this they are uber efficient.  An increase in export production does not correlate to a decrease in unemployment.  Expect the non farm payrolls disappointment to indicate a future slow down in the US economy, and has the potential to be very market moving.  The Fed definitely dropped the ball last week because all the data juxtaposed with expectations do not look promising.  In short all the news together may move oil to past the $150 threshold.  Gracias Bernanke & Co.  The economy will recede regardless of the interest rate; however the depth of the recession will reflect the Fed’s future decisions, and reputation.