However, economic data on Friday was, in a way, not surprisingly disappointing. Non-farm payrolls for October fell by 240k, which was worse than market expectations for a 200k decline and was the largest monthly loss recorded since Nov 2001. Moreover, non-farm payrolls for September were revised lower to -284k down from -159k, as you recall in Pro Traders Club, I suggested the potential for 250K decline in NFP.

The extent of the deterioration in the global economy is evident in China's enormous fiscal stimulus package announced over the weekend. China has announced a fiscal stimulus package worth CNY4 tn, or around 12% of GDP, that will be implemented over 2009 and 2010. This development has helped support commodity currencies this morning with AUDUSD currently trading just over 0.6900.

This week investors will be tuning in to President-elect Obama's decisions during the transition period. Reports suggest internal criticism within the Democrat party over two of the favourites - Tim Geithner, who is the current NY Fed Gov and Larry Summers, who was treasury secretary in the Clinton administration.

On the economy front, retail sales for October are due on Friday and will provide an important update on consumer spending in what was a crisis month. Also on Friday, Fed Chairman Bernanke and ECB President Trichet feature in a panel discussion on monetary policy at the ECB conference on Friday. As a little homework, keep an eye on these focal points throughout the week and observe the price aciton in response to the report and what it means to the overall economy. We will do this in the Pro Traders Club, members are those who have attended a workshop. We willl soon be releasing www.protradersclub.com where anyone willing to pay can join to access the video market reviews regularly. We sometimes offer trade recommendations that appear to have a strong history of paying. You can gain access to PTC if you attend a workshop, like the one next weekend in Charlotte http://chrislori.com/workshops-Chris-Lori.html or in Vancouver in December.

The broader dollar long term outlook remains unchanged. The US dollar has been benefiting primarily from risk aversion flows into liquid and safe US securities as redemptions from hedge funds and asset managers and margin calls for wealthy private investors continue. The US dollar can also look to benefit from expanded inflows into its expanding Treasury market and also on the back of improving yield differentials as inflation-targeting central banks such as the ECB and the BoE have greater scope to cut interest rates. This is a topic we will cover in detail at my Workhsop in Charlotte, NC Nov 21-23, you may register for the workshop at http://www.chrislori.com/Charlotte-workshop.html. For full workshop details, you can click the video link on the page.

The latest Fed balance sheet showed another increase in Treasury custody holdings. As always, question marks over long-term valuations for the dollar remain given the US remains ground zero of the international crisis and given the potential for foreign reserve managers to accelerate diversification out of the dollar. The EUR/USD appears to be in a technical correction, please refer to the Gartley HS on the 60min chart explained in the recent Pro Traders Club video. We are likely to see a rally in risk through November and December as markets will often give back movements from Sept/Oct timeframe. How do I know this... join PTC or attend a workshop and find out :) **

http://chrislori.com/workshops-Chris-Lori.html

AUD, NZD: National Party wins government in NZ

The quarterly RBA Statement of Monetary Policy was released this morning. Not surprisingly, the RBA has revised down GDP growth but lifted core inflation forecasts slightly. The RBA warned that the rate cuts and the weaker dollar will not fully compensate for the impact of the credit crunch and the global slowdown, which possibly hints at further rate cuts to come. Meanwhile, in NZ election over the weekend, the National Party led by former investment banker John Key has swept to power. The National Party won 59 seats, just short of a 65 majority, and will form government with the help of the minor parties ACT and United Future. The National Party are ideologically in favour of small government and have promised tax cuts, which should help the NZD.

Ref: UBS, Bloomberg


** Due to the amount of information provided at our workshops, attendees always comment on how I should be charging $3000 - $5000 but for the final U.S. workshop of the year, we are offering a special discount price of $ 1295 plus bonuses including free access to the Pro Traders Club market review. Presently, due to my busy schedule and commitments, I have no workshops scheduled for 2009. Recently, a Sydney workshop attendee said that the course paid for itself in the first two hrs. and was kind enough to send the following unsolicited testimonial;

Sydney Workshop Testimonial:

Dear Chris,

I just wanted to thank you for a tremendous workshop in Sydney last weekend.. Your enthusiasm, knowledge of the market and ability to engage the class have no equal in my opinion, and the depth and breadth of topics covered are outstanding. You deliver key insights into how the market operates and display a self-less willingness to share the foundations for a trading education covering all key areas from the importance of fundamentals, to the advanced application of technical analysis, to psychology, equity management and risk control which is just fantastic. And guess what, you make it enjoyable as well !
I highly recommend your workshops and courses to all traders looking for the best and most serious of trading educations.

Panos
Sydney, Australia

Good luck with your trading, be careful out there and I hope to see you at an upcoming workshop.

Chris Lori

Tags: Financial Crisis