WHY FEAR

Jose Mourinho has hit back at claims from his title rivals that Chelsea's proposed sale of Juan Mata to Manchester United was 'unfair'.

Mata's ﾣ37million transfer inched closer on Friday night as United agreed the deal subject to a medical and Chelsea closed in on his replacement Mohamed Salah after agreeing an ﾣ11m fee with Basle.

Unhappy: Arsene Wenger hinted that Chelsea sold Juan Mata to Man United in a bid to scupper title rivals+4
Unhappy: Arsene Wenger hinted that Chelsea sold Juan Mata to Man United in a bid to scupper title rivals

The delay did not stop Mourinho lashing out at Arsene Wenger and Manuel Pellegrini - and said they could have signed Mata for the same price if they wanted him.

'Wenger complaining is normal because he always does,' said Mourinho. 'It's in his nature. If it was Arsenal or City or Liverpool and Juan desired to go, we would do the same.

'A team can only play with 11 players, not 12.

Big move: Man United have agreed a club record fee for Juan Mata+4
Big move: Man United have agreed a club record fee for Juan Mata

Upbeat: Manager Mourinho defended Chelsea's decision to sell Mata to Man United+4
Upbeat: Manager Mourinho defended Chelsea's decision to sell Mata to Man United

'City, Arsenal and United are full of top players, so if Juan plays for them  it means somebody else is not playing. So why not? Wenger is a very intelligent man who always has an opinion and likes to share it. We have to accept the way he is. But when he says this is not fair, I think what is not fair is that his team always has the best day to play. Always, always.'

This was a reference to Arsenal's FA Cup tie against Coventry last night. Chelsea play Stoke on Sunday before a full midweek list of Barclays Premier League fixtures.

'In the Capital One Cup we had to play 24 hours after, they had 72 hours. That's not fair. This week, who plays Friday? Who plays Sunday? It's never fair because they always get to rest.'

Middle man: Mourinho also took a swipe at Manuel Pellegrini, who was busy helping launch Man City women's side on Friday+4
Middle man: Mourinho also took a swipe at Manuel Pellegrini, who was busy helping launch Man City women's side on Friday

Wenger hinted that Chelsea were keen to sell Mata because they have played United twice with Arsenal, City, Liverpool and Everton to play again.

Uncharacteristically, Pellegrini chipped into the verbal skirmish, saying: 'Maybe Arsene Wenger had a correct reason, but my argument is more general. I feel that if a player has made more than five or six appearances for his club, he cannot join another one in the same league at this stage.'

Mourinho shrugged it off, saying: 'If Wenger sells Mesut Ozil to Man United, I will be happy because he's selling a very important player. He should be happy that Chelsea sold a player like Juan Mata.'


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DON’T EXPECT FX VOLATILITY TO SUBSIDE NEXT WEEK

January 24th, 2014

Don’t Expect FX Volatility to Subside Next Week
GBP: Hit By Dovish Comments from BoE Carney
EUR: Supported by Optimism from ECB Draghi
USD/CAD Retraces, Ignoring Drop in CPI
AUD: RBA Policymaker wants A$ at 80 Cents
NZD: Gold and Oil Unchanged
JPY: Hit Hard by Risk Aversion

Don’t Expect FX Volatility to Subside Next Week

At the beginning of the week, we warned our readers not to become complacent because of the lack of U.S. economic data. The abundance of key economic reports from other parts of the world along with the earnings season meant there could still be big moves in currencies. While data from China, Canada, Europe and Australia played a role in this week’s breakout in FX, today’s volatility was triggered by something we did not expect to occur this week – which was the massive liquidation out of emerging market assets. If investors continue to dump emerging market currencies in the coming week, the majors could be vulnerable to steeper losses. In addition to the moves in emerging markets, there’s also a heavy economic calendar to keep forex traders busy. The most important event risk of the week is the Federal Reserve’s monetary policy announcement. Ben Bernanke will have to decide at the final FOMC meeting of his career whether or not asset purchases should be cut by another $10 billion. He expected to do so back in December but that was before the shockingly weak non-farm payrolls report and mixed consumer spending numbers. We will spend a lot more time talking about what to expect from the FOMC next week but right now what is important for forex traders to realize is that the Fed policy uncertainty means continued volatility for currencies. With a RBNZ meeting on the calendar along with fourth quarter GDP numbers from U.S. and U.K., the IFO report, unemployment numbers and retail sales figures expected from Germany, it should be an active and exciting week in currencies. This means that we will be watching the key levels in EUR/USD, GBP/USD, USD/JPY and NZD/USD closely for breakouts.

We’ve got a major crisis of confidence in emerging market currencies and when that happens, the liquidation can last longer than most expect. There’s a reasonable possibility for another 5% move lower in EM currencies before everything stabilizes. In our 2014 outlook, we talked about how this will be the year of DM (developed markets) versus EM because slower growth in China will encourage investors to move money out of emerging market assets, particularly money that is parked in countries heavily reliant on Chinese growth like Brazil and South Africa who supply raw materials to China. Countries with massive current account deficits like Turkey are particularly vulnerable. With Chinese growth expected to slow for the next 5 years, emerging market currencies could underperform for some time to come. For the major currencies, an additional sell-off in global markets would lead to more risk aversion, which means a deeper sell-off in pairs such as USD/JPY, AUD/USD and GBP/USD ahead of next Wednesday’s FOMC rate decision. If the U.S. central bank decides to provide a bit more support to the U.S. and the global economy by keeping asset purchases unchanged this month, we could see a relief rally in EM and DM currencies but the chance is slim.     KATHY LIEN