In some positive news, if we can call it that, the U.S. deficit for the 2012 budget year is $207 billion smaller than it was in 2011. This improvement is due to increased tax revenue, which rose by 6.4% from 2011 to $2.4 trillion. Unfortunately, spending far exceded revunue, totaling $3.5 trillion, with the deficit of $1.1 trillion. This marks the fourth consecutive year with a shortfall over the one trillion threshold.
On the positive note, the deficit has been in a slow decline since 2009, when it posted a record of $1.41 trillion. Clearly, there is no real prospect for a “balanced budget” any time soon, in spite of pledges by our politicians. Interestingly, though, the general public, or even market participants do not care. Financial markets took the news in stride, while the consumer sentiment (Reuters/Michigan Index) showed improvement. The preliminary number came in at 83.1, sharply beating the forecast of 78.0, suggesting that consumers are expecting some upside….
As mentioned in the last post, on Friday I was looking for short-term breakout from ranges at the start of the London session. The two best currency pairs were the EUR-USD and the USD-CHF. By the “best”, I mean clearly defined and tight ranges. In case of the USD-CHF, the price finally moved down, triggering the sell order at 0.9334. My objective was small, only 20 pips, but even then the price missed it (at first) by one lousy pip, so I got out with a smaller profit. The sell order in the NZD-JPY remains valid and perhaps will be filled next week. Have a great weekend!
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