Ahead of the G20 meeting beginning today where currency rates will be the front and center discussion, the $ index is flattish. While Geithner is seeking some sort of trade criteria relative to one’s GDP as a benchmark for FX moves, the entire weekend’s discussion on currencies will lead to nothing concrete as it’s the US Federal Reserve that is driving the global distortion with their extraordinary policy and debasement of the global reserve currency and Mr. Bernanke will not be attending. Following Bullard’s comments yesterday on his desired path for QE2, the 5yr5yr inflation expectations breakeven rate is rising to the highest level since May at 2.88%. Germany’s export dependent economy continues to show little angst over the rising Euro as their Oct IFO business confidence figure rose to the highest since May ’07 and was 1.1 pts above expectations.
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