Issues that still need

Issues that still need to be addressed regarding Korean government's guarantee for Hana Bank's proposed USD bond could cause delay in pricing of debt; under law, only debt issued to non-residents eligible for guarantee; residents also eligible for guarantee as long as they buy bond in secondary amrket. Hana Bank looking to sell as early as next week 3-year government-guaranteed bond that market participants expect to amount to around $500 million. This "new guarantee eligibility wrinkle" has raised doubts over enforcement of same, also flags a possible delay in deal, says Brett Williams, senior credit analyst at BNP Paribas. Any long delay or inability to enforce such guarantee would send negative signal and won't bode well for commercial banks looking to raise funds in overseas bond market, say some market participants

The foundations of a bottom

The foundations of a bottom in the global business cycle appear to be in place, suggesting a turn for the better in economic news of the next 3-6 months, Barclays Capital says in a quarterly research publication, titled, "Global Outlook: Green Shoots Have Arrived." It's recommending investors position more aggressively in select regions and asset classes. "The beginnings of a global economic recovery are evident," said Larry Kantor, head of research. Recovery is underway in emerging Asia, after which the US should be watched as the next region to recover, Barclays says.

Treasury's Geithner promises

Treasury's Geithner promises more transparency in future payments from the Troubled Asset Relief Program. "I completely agree that the American people deserve to see much higher standards for transparency and acountability in the use of these resources," Geithner tells House committee. Tsy will publish precise terms of lending, and will require extensive reporting on how resources are going to be used, what its going to do to lending capacity and what's actually happening to lending. Tsy has also proposed "strong conditions" on compensation and dividends.

The People's Bank of China and Bank Indonesia

The People's Bank of China and Bank Indonesia said Monday they have signed a three-year currency swap agreement for CNY100 billion, or IDR175 trillion.   In a statement on its Web site, the PBOC said the pact aims to "support bilateral trade and direct investments to foster economic growth," and to provide short-term liquidity to stabilize financial markets.   The statement said both sides could extend the currency swap agreement.

Sterling kicks off the week on a high

Sterling kicks off the week on a high, with GBP/USD back above 1.41 for the first time in a week and EUR/GBP some penny and a half off last week's peak. Contributing factors are Rightmove reporting a 0.9% month-month rise in UK house prices, higher stocks, which is helping risk appetite, and oversold readings on the charts. Monday sees the BOE's 2nd two-part QE auction with results around 1300 GMT and 1445 GMT. Chartwise, BNP Paribas says GBP/USD above 1.4075 targets 1.4180 and possibly 1.4310 while EUR/GBP below 0.9170 targets 0.9130 and 0.90785 with resistance at 0.9210. EUR/GBP trades at 0.9160, GBP/USD at 1.4160.

Euro is advancing ahead of the open of U.S. stocks

Euro is advancing ahead of the open of U.S. stocks as futures point to a fourth straight day of gains. This has sent risk appetite higher, leading traders to sell the safe haven dollar. Fri morning in NY, EUR/USD was at 1.2919 from 1.2924 late Thu, and USD/JPY was at 98.36 from 97.63, according to EBS. EUR/JPY was at 127.09 from 126.20. GBP/USD was at 1.4018 from 1.3955, and USD/CHF was at 1.1911 from 1.1844 Thu.

USD/INR rangebound

USD/INR rangebound, sluggish in thin trade as interest ebbs, says state-run bank's dealer; pair at 51.68 vs 51.70 earlier, 51.89 last close. "There is very little participation right now, just some intermittent need-based demand," dealer says, tips pair to edge lower to around 51.55 by session's end as most Asian currencies have held gains.

EUR/GBP came in for a bit of profit taking

EUR/GBP came in for a bit of profit taking overnight after poking its head above 0.93 in Europe Wednesday. However, Commerzbank says as long as the gilt/bund spread is moving fast it would be surprised if EUR/GBP reverses course. The bank says according to their technical analyst the next targets are the 0.9355 area and even January's highs of 0.9520 and 0.9555. The 5-year gilt/bund spread is currently 9 1/2BP in bunds favor. EUR/GBP trades at 0.9254 from the day's low of 0.9212.

SNB may leave interest rates unchanged

SNB may leave interest rates unchanged at 0.5% for 3-month Swiss franc Libor at its quarterly meeting on March 12, and also likely won't announce any market interventions, Commerzbank strategist Antje Praefcke says. "In order for the SNB to intervene, the EUR/CHF would probably have to fall below 1.45," she says. Doesn't rule out a move below that level "also because markets may just want to see whether the SNB will act," she notes. EUR/CHF currently at 1.4785.

The Chinese central bank's efforts to keep the yuan stable

The Chinese central bank's efforts to keep the yuan stable and investor caution before Wednesday's release of trade data helped China's yuan stay flat against the U.S. unit Tuesday.   Dealers said they expect the dollar to continue consolidating in a narrow range of CNY6.8350-CNY6.8420 while investors await China's February imports and exports data.   On the over-the-counter market, the dollar was at CNY6.8401 around 0730 GMT, little changed from Monday's close of CNY6.8400. It traded between CNY6.8301 and CNY6.8410.   The dollar-yuan central parity rate was set at 6.8358, up slightly from 6.8355 Monday.   "The Chinese central bank only fine-tuned the fixing after the dollar rose sharply against the British pound overnight, which shows Beijing's intention to keep the currency stable," said a Shanghai-based dealer at a foreign bank.   The U.K. pound fell to a six-week low of $1.3747 late in New York Monday as the market continues to speculate over whether the quantitative easing announced by the Bank of England last week will be adequate to halt the U.K. economy's slide into recession.   China's foreign exchange market also shrugged off a government report showing the first sign of deflation in the country in over six years.   Official data earlier Tuesday showed China's consumer price index dropped 1.6% in February from a year earlier.   "The February CPI is basically within our expectation, and what we care most about is the imports and exports data," said a Guangzhou-based dealer at a foreign bank, adding he expects a continuing slide in imports and exports from January.   Offshore, one-year dollar-yuan nondeliverable forwards were at 6.9448/6.9498, down slightly from 6.9499/6.9549 late Monday afternoon.

The Chinese central bank's efforts to keep the yuan stable

The Chinese central bank's efforts to keep the yuan stable and investor caution before Wednesday's release of trade data helped China's yuan stay flat against the U.S. unit Tuesday.   Dealers said they expect the dollar to continue consolidating in a narrow range of CNY6.8350-CNY6.8420 while investors await China's February imports and exports data.   On the over-the-counter market, the dollar was at CNY6.8401 around 0730 GMT, little changed from Monday's close of CNY6.8400. It traded between CNY6.8301 and CNY6.8410.   The dollar-yuan central parity rate was set at 6.8358, up slightly from 6.8355 Monday.   "The Chinese central bank only fine-tuned the fixing after the dollar rose sharply against the British pound overnight, which shows Beijing's intention to keep the currency stable," said a Shanghai-based dealer at a foreign bank.   The U.K. pound fell to a six-week low of $1.3747 late in New York Monday as the market continues to speculate over whether the quantitative easing announced by the Bank of England last week will be adequate to halt the U.K. economy's slide into recession.   China's foreign exchange market also shrugged off a government report showing the first sign of deflation in the country in over six years.   Official data earlier Tuesday showed China's consumer price index dropped 1.6% in February from a year earlier.   "The February CPI is basically within our expectation, and what we care most about is the imports and exports data," said a Guangzhou-based dealer at a foreign bank, adding he expects a continuing slide in imports and exports from January.   Offshore, one-year dollar-yuan nondeliverable forwards were at 6.9448/6.9498, down slightly from 6.9499/6.9549 late Monday afternoon.

The Chinese central bank's efforts to keep the yuan stable

The Chinese central bank's efforts to keep the yuan stable and investor caution before Wednesday's release of trade data helped China's yuan stay flat against the U.S. unit Tuesday.   Dealers said they expect the dollar to continue consolidating in a narrow range of CNY6.8350-CNY6.8420 while investors await China's February imports and exports data.   On the over-the-counter market, the dollar was at CNY6.8401 around 0730 GMT, little changed from Monday's close of CNY6.8400. It traded between CNY6.8301 and CNY6.8410.   The dollar-yuan central parity rate was set at 6.8358, up slightly from 6.8355 Monday.   "The Chinese central bank only fine-tuned the fixing after the dollar rose sharply against the British pound overnight, which shows Beijing's intention to keep the currency stable," said a Shanghai-based dealer at a foreign bank.   The U.K. pound fell to a six-week low of $1.3747 late in New York Monday as the market continues to speculate over whether the quantitative easing announced by the Bank of England last week will be adequate to halt the U.K. economy's slide into recession.   China's foreign exchange market also shrugged off a government report showing the first sign of deflation in the country in over six years.   Official data earlier Tuesday showed China's consumer price index dropped 1.6% in February from a year earlier.   "The February CPI is basically within our expectation, and what we care most about is the imports and exports data," said a Guangzhou-based dealer at a foreign bank, adding he expects a continuing slide in imports and exports from January.   Offshore, one-year dollar-yuan nondeliverable forwards were at 6.9448/6.9498, down slightly from 6.9499/6.9549 late Monday afternoon.

GBP/USD falls

GBP/USD falls to a fresh 1-month low of 1.3940 after stops are triggered below support and recent low of 1.3960. Commerzbank analyst Steven Merrigan says next target is 1.3850, that being a 76.4% retracement of the 1.35-1.4975 rally.

data releases in Canada

Both U.S. Treasurys and the Canadian government bond market retreated Friday morning after U.S. nonfarm payrolls data for February came in roughly consistent with expectations but were not as bad as many market participants feared.   Canadian bonds generally outperformed U.S. Treasurys Friday, though the long bond ended the session lagging its U.S. equivalent. Longer-dated issues were in positive territory for much of the session, but gains had been squeezed out of the market by late afternoon trading.   "The payroll [data] were the highlight of the day," said Edward Jong,  senior vice president for fixed income at MAK Allen & Day Capital Partners and portfolio manager for the FrontierALT Opportunistic bond fund.   The jobs report showed the U.S. continued to lose jobs, shedding 651,000 nonfarm jobs last month, while the jobless rate hit a 25-year high of 8.1%.   The U.S. economy has shed 4.4 million jobs since the recession began in December 2007, with almost half of those losses occurring in the last three months.   The data were something of a "nonevent" as they merely confirmed the continuing pattern of consistent monthly job losses in the U.S., Jong said.   "The reality is that this is one of many. We're in '09 now, and all of '08 was negative and all of '09 will be negative," he said.   Also hurting U.S. bonds were comments Friday from Federal Reserve Bank of New York President William Dudley, who votes on monetary policy. Dudley suggested buying long-term Treasurys isn't the best option for the Fed as the purchases now won't help the Fed's goal to bolster credit markets and the economy.   Overall, supply remains a critical issue for U.S. Treasurys and therefore for the Canadian market.   "The crosscurrents over last the few days have been fear of supply and fear of who's going to buy the debt issued by the Treasury," Jong said.   With continued volatility in stocks and corporate bonds, the environment remains generally favorable for government bonds, he said.   There were no significant data releases in Canada Friday.   The data calendar is light early next week, with February housing starts on Monday and the new-house-price index for January on Wednesday.