Greek Respite
Tue, 31 Jan 12 10:52 am
Yesterday’s EU summit proved to be eventful with 25 out of 27 EU states agreeing to the “fiscal compact”. Additionally, reports suggesting progress on Greek debt-swap talks have also aided the “risk on” trading sentiment in currency markets today. However, an announcement is unlikely to be made until negotiations on a new loan package are finalised and will keep markets fixated to headlines emerging from Greece. At home, data released earlier today indicates an improvement in consumer confidence for January, hinting towards a continuation of the festive mood after Christmas.
All eyes on Brussels
Mon, 30 Jan 12 10:54 am
Worries surrounding the Eurozone debt crisis have failed to abate after Fitch cut its credit rating of five Eurozone nations, including Italy and Spain. This unprecedented move
Markets Nervously Eye Greek Talks
Fri, 27 Jan 12 10:54 am
As we near the end an action-packed week market participants appear to be on edge as negotiations on a Greek debt-swap deal extend to a second day. With markets still digesting the outcome of the FOMC meeting held earlier in the week, today’s focus will switch to crucial US GDP data which is expected to indicate accelerated growth for the fourth quarter of 2011. At home there are further signs of stress in the economy with the CBI retail sales balance yesterday indicating the lowest reading since March 2009.
The Double Dip Dilemma
Thu, 26 Jan 12 11:56 am
Yesterday’s FOMC meeting drew most of the market attention with the high yield currencies gaining after the Federal Reserve indicated that it will maintain exceptionally low interest rates until at least late 2014. This announcement overshadowed the lower-than-expected UK GDP data released yesterday. With little on offer in terms of economic releases in Europe today, markets will focus on the outcome of Italian bond auctions. Market participants will also keep an eye on news flow from Greece where the debt swap negotiations are scheduled to resume today.
Recession threat returns
Wed, 25 Jan 12 10:56 am
In the UK, data just released has indicated that the nation’s GDP contracted a higher-than-expected 0.2% sequentially in the fourth quarter of 2011, raising concerns over the health of the economy. The BoE minutes of the last policy meeting indicated that policy makers had voted unanimously to keep the target for bond purchases unchanged. Market concerns over a possible recession in the Eurozone ebbed slightly yesterday following strong Eurozone and German manufacturing PMI data. Across the Atlantic traders await today’s conclusion of the two-day interest rate meeting.
Greece on thin ice
Tue, 24 Jan 12 10:53 am
Debt issues in Greece seem to have intensified after Eurozone finance ministers rejected the offer from private bond holders to help restructure Greek debt. Meanwhile, data just released has indicated an improvement in Eurozone and German manufacturing activity. On the domestic front, new statistics reveal that public sector net borrowing fell more than expected for December. Sterling’s future course is likely to be heavily influenced by tomorrow’s fourth quarter GDP numbers and the BoE minutes of the last rate setting meeting.
Greek Debt: Back in the Limelight
Mon, 23 Jan 12 10:56 am
European Union finance ministers are scheduled to meet in Brussels today to discuss the draft of their new fiscal pact and the proposed Greek debt swap. Also on the agenda are the terms of the second financing package for Greece and further fine tuning of the European Stability Mechanism (ESM). Meanwhile, private holders of Greek debt have indicated that they have made the 'maximum offer' on losses that they are agreeable to bear. Successful bond auctions in several Eurozone nations last week had set a positive tone for the Euro. Today market participants are eyeing the German and French bond auctions for more of the same.
Markets on edge
Fri, 20 Jan 12 12:14 pm
This week has fared well for the European bond auctions and has eased market concern over the European sovereign debt crisis. However, market seems to be on the edge today as Greece heads into the third day of talks with private creditors on the debt-swap plan. With little on tap in terms of economic releases today, markets focus will be on US existing home sales and news flows from the Eurozone. On the domestic front, data just released has revealed that retail sales climbed for December.
Action-packed day ahead
Thu, 19 Jan 12 10:43 am
Markets were positively surprised yesterday following reports that the IMF was seeking an expansion of its lending resources to protect the global economy. Moving into today there are a number of events set to keep the market on its toes, including French and Spanish bond auctions, debt negotiations in Greece and the meeting between Merkel, Sarkozy and Monti. Across the Atlantic there is a heavy economic calendar slated for today, including consumer price inflation, housing starts and jobless claims data. At home, data released this morning has indicated that consumer confidence deteriorated for December
All eyes on Athens
Wed, 18 Jan 12 11:31 am
Yesterday’s well received Spanish and Greek bond auctions, coupled with a significant improvement in German economic sentiment index, have buoyed sentiment towards the Euro. Additionally, reports suggesting that Greece is nearing a deal on its debt with private bondholders have further improved trading sentiment in high yield currencies. In this session, market participants are eyeing German and Portuguese bond auctions and news bytes from talks between Greek officials and private bondholders. On the domestic front, data just released has indicated a rise in the unemployment rate for November, while the claimant count rose less than expected.
Euro rallies on Eastern Promise
Tue, 17 Jan 12 10:44 am
Today’s better-than-expected Chinese GDP, industrial production and retail sales data, along with yesterday’s successful French bond auctions, have set the ball rolling for high yield currencies. French bond auctions fared well yesterday despite the mass downgrading of nine Eurozone countries on Friday. Meanwhile, following yesterday’s S&P downgrade of the EFSF, all eyes are focused on bond auctions by the EFSF, along with Spain and Greece, slated for later today. At home, data just released has indicated that consumer price inflation eased for December, while the retail price index climbed.
Mass Downgrade Stuns Eurozone
Mon, 16 Jan 12 11:14 am
Europe received an unwelcomed weekend surprise after S&P stripped France of its coveted “AAA” credit rating late on Friday, while also downgrading eight other Eurozone nations. Markets await the results of French bill auctions today,worth €8.7 billion, to gauge the impact of S&P’s ratings cut. At home, the housing market continues to face a challenging scenario with Righmove’s house price index indicating a decline for January. With US markets closed today and a light economic calendar globally, trading sentiment will be driven by news bytes from the Eurozone
Optimism on Europe
Fri, 13 Jan 12 11:04 am
As we approach the end of the week there seems to be increasing optimism towards developments in the European debt market, seemingly owing to successful bond auctions in Spain and Italy. Although the ECB kept its monetary policy unchanged yesterday, encouraging comments from the ECB President, Mario Draghi, helped to turn the tide in favour of high yield currencies. At home, data just released has indicated that producer price inflation eased for December. This follows yesterday’s “status-quo” monetary stance from the BoE and downbeat industrial production numbers.
Draghi/King in the Spotlight
Thu, 12 Jan 12 11:15 am
Europe’s debt woes face a litmus test today in the form of Spanish and Italian debt auctions which are likely to be crucial for their respective credit ratings. With the ECB policy meeting likely to offer little in terms of major policy changes, markets are expected to focus on the post-meeting joint conference by Mario Draghi and Mervyn King regarding comments on the European Financial Stability Facility (EFSF). At home, the BoE rate setting meeting, scheduled for today, is also expected to maintain an unchanged monetary policy stance. Data just released revealed that industrial production dropped for November.
Rating Agencies Strikes Again
Wed, 11 Jan 12 10:55 am
Trading sentiment in high yield currencies has ebbed a little owing to the looming threat of rating downgrades in the Eurozone. Fitch yesterday warned that Italy faces a “significant chance” of a rating cut this month. This has turned market focus onto the Merkel-Monti meeting today and Italian and Spanish bond auctions starting tomorrow. Additionally, German GDP growth numbers, released this morning, matched market estimates and so are likely to favour the German bond sales scheduled for later today. At home, shop price inflation for December slipped to its lowest level in 16 months and the total trade deficit widened for November.
UK optimism
Tue, 10 Jan 12 10:58 am
After last week’s strong PMI numbers there seems to be more buoyancy in the UK economy, as is evidenced by a rise in the like-for-like retail sales figures for December. Additionally, a marginal improvement in the RICS house price balance index has given rise to expectations of a broad-based recovery. Meanwhile, market optimism ahead of today’s meeting between Angela Merkel and Christine Lagarde has improved trading sentiment towards high yield currencies. Yesterday’s much awaited German-Franco talks ended with no major news bytes. The leaders, as on previous occasions, merely reiterated their commitment towards the measures agreed at the last summit.
Markets await Merkozy Magic !
Mon, 09 Jan 12 10:57 am
The US Dollar is trading lower against the majors this morning as traders await the outcome of the French President and the German Chancellor’s meeting in Berlin later today. Losses in the US Dollar were limited amid expectations of improving economic fundamentals in the US and persistent concerns over the European debt crisis.
Cautious Market
Fri, 06 Jan 12 10:38 am
Worries over the European debt crisis have abated somewhat this morning. This follows yesterday’s market concern over higher than expected borrowing costs at the French bond auction. Markets now await the release of crucial consumer confidence, retail sales and unemployment data from the Eurozone later today. Across the Atlantic, monthly non-farm payrolls data today is expected to confirm the uptrend in the economy. At home, with a quiet day in terms of economic releases, Sterling is expected to take direction from releases in the Eurozone and the US.
Greece's Imminent Default
Thu, 05 Jan 12 10:41 am
A series of disconcerting events across Europe have significantly affected trading sentiment in Sterling and the Euro today. The Greek Prime Minister’s warning of his nation’s potential “disorderly default” in March, poses many potential issues for the entire global economy. After yesterday’s subdued German bond sales, market participants are keenly eyeing French bond auctions scheduled for later today. In the UK, data just released indicates an improvement in the services PMI. This follows upbeat manufacturing and construction activity figures released earlier in the week.
Pivotal bond auctions ahead…
Wed, 04 Jan 12 10:51 am
Yesterday’s resurgent demand for high yield currencies appears to have faded a little as traders turn cautious ahead of the debt auctions in Germany and Portugal today. At home data has been positive with a rise in mortgage approvals for November and an unexpected improvement in construction activity for December. The direction of the currency markets in the next few trading sessions will be largely driven by the outcome of debt auctions in key Eurozone countries.
New Year Positivity
Tue, 03 Jan 12 10:46 am
The first trading week of 2012 has begun with a largely positive risk appetite among traders. This follows upbeat manufacturing data from Germany, China, Australia and India. At home news has been mixed with the manufacturing PMI rising to a higher-than-expected reading of 49.6 for December, whileconversely the Lloyds business barometer dropped to its lowest level in three years. Across the Atlantic, data scheduled for release later today is expected to provide additional positive impetus to high yield currencies, with US manufacturing for December expected to show the fastest pace of growth in six months.
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