High yield spreads remain stubbornly high despite dramatic interventions from UK and US central banks. Banks are hording cash due to mistrust and fear over who will make the next big write down. Nationwide, the UK’s largest building society, put up the rates on some mortgages despite there being a reasonable probability of a rate cut on the 10th of April.

Tuesday brings a raft of manufacturing data, with UK manufacturing PMI in the morning, and US ISM manufacturing index in the afternoon. Midday on Wednesday will be a turbulent time for European traders, with the release of US ADP Non-farm Employment Change, and Fed Chairman Ben Bernanke speaking. Friday tops the bill with the release of Non-farm payroll change and US employment rates.

“A long, ugly, deep recession.” was how Chrysler’s chief financial officer Jerry York described his outlook for America’s economy at a recent gathering of fellow finance executives. A recent poll of financial officers indicates that this isn’t an isolated viewpoint. In America, economists with a pessimistic outlook outnumber the positive by a 9-1 margin, while in Europe the margin is 6-1. (via invivoanalytics.com)

After the Easter correction it seems the Dollar collapse is back on track, and March’s high of 1.5904 in the EUR/ USD exchange rate could well be breached again this week. A ‘one touch’ trade predicting that the EUR/ USD will touch 1.5855 at any time during the next 16 days could yield 12%.

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