The news in general was still favorable, but the focus is on what's next. People aren't only looking at the progress in the war in Iraq, they're starting to think about what's going to come after.
We saw some support at 120.70 yen, with the higher dollar/yen trend still in place and any kind of pullback should be relatively shallow.
At the start of the year, the investment community was very bullish on Asia, ... The currencies' performance is clearly surprising.
This might be a slight dollar negative. The key was the core which was bang on expectations at 0.2 percent. So there's not much inflation there.
The key thing is that, while this doesn't take away inflation concerns, it mitigates some of them and makes the 'measured' approach ... an even more likely response from the Federal Reserve.
Interest-rate support for the Australian dollar will lessen quite substantially as the year progresses. We see a steady outlook from the Reserve Bank of Australia and a higher Fed rate.
Yields were very important in 2005; we think they'll be important again over the early part of 2006. Over the first half of the year we think the dollar will do a little better on interest rates.
Inflation concerns were not really new news and not prevalent in the market.
We would hope that [the ISM] is sending the correct signal, and the details suggest it is; but it's wise, given the fact that businesses are being cautious about investing, to wait until this result is validated [by other data].
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