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(JP) Follow-up: LDP-New Komeito formal coalition said to win 325 seats in 480-seat lower house of Diet – Nikkei News Above 320-seat threshold for super-majority to supersede legislation of the upper house. Voter turnout in  the House election is estimated at 59.52% (record); prior record low was 59.65% in the 1996 election. (JP) PM-elect Abe said to be looking to draw up a supplementary budget of up to ¥10T for FY12/13; Japan to issue new debt to secure funds for budget – Nikkei News- Also intends to seek other parties’ cooperation in the upper house instead of using the super-majority. ...


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FOMC Statement Highlight And Analysis

FOMC Statement Highlight And Analysis

by Henry Liu on December 13, 2012

December 12, 2012 FOMC Statement Analysis Federal Open Market Committee surprised the market today by dropping the 2015 low rates pledge by changing to a target based policy.  Specifically, the FOMC pledges to keep rates low until unemployment rate is below 6.5% and Inflation is above the 2.5% target… This basically provided no set timeline for the Feds to keep rates at the current level, and will add to the USD selling trend…  Here’s the complete FOMC Statement compared to the previous (October) statement. Information received since the Federal Open Market Committee met in October suggests that economic activity and ...


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Greece Bailout Tranche will be released on December 13 in the amount of €34.4B. (GR) EU’s Juncker: Formally announces Eurogroup had reached deal on Greece aid disbursement Reiterates view that Greece government had demonstrated firm commitment to program. Greece bilateral loan rates to be lowered by 100bps. Euro zone agrees to defer interest payments on EFSF loans to Greece by 10 years Extend maturities on all Greek loans by 15 years Central banks to forgo bond profits on Greek bonds Package includes central bank profits on Greek bonds paid into a separate Greek account Also to include a  debt buy back ...


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The Most Anticipated Eurogroup Meeting For The Year…

IMFEU

by Henry Liu on November 19, 2012

The Most Anticipated Eurogroup Meeting For The Year… (GR) Germany, France, Italy and Spain to meet on Greece today, will look to reach a joint stance ahead of scheduled Eurogroup meeting on Tuesday Nov 20th (tomorrow) Germany wants an enhanced EFSF supervision. Will not release next aid tranche before Nov 26th- Extended Greek bailout target to 2022 is not a done deal. (GR) EU/IMF/ECB Troika to report to the Eurogroup and provide an update on Tuesday, Nov 20th - Need to find an agreement on Greece tomorrow. (GR) EU President Juncker: Progress is being made to find an agreement between IMF ...


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Greece Bailout Woes Continue To Fuel Risk Aversion

Greece Bailout Woes Continue To Fuel Risk Aversion

by Henry Liu on November 13, 2012

Greece Bailout Continues… The ECOFIN meeting today ended with no visible agreement to release the €32B tranche of bailout payment, crushing the hopes of Greek politicians who are utterly aware of the €5B redemption deadline this Friday. Furthermore, ECB added fuel to the fire by denying that it would broaden collateral for Greece ELA, a move that shocked the market as traders were counting on the ECB to step in and save the day, just as before in an eerily similar fashion.  Euro faced more selling pressure as European officials denied earlier reports that there would be another Greece-specific meeting later this week, although Greece ...


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Before EU could even discuss the approval and give the go ahead for the next Greece Bailout Tranche disbursement, Greece must first negotiate with Troika on new budget and austerity plans, then pass said plans through its own parliament.  Of course, EU must also review the official report from Troika (EU/IMF/ECB), but usually if Troika recommends disbursement, then most likely EU will foot the bill. So far Greece has successfully passed both austerity (153 out of 300) and new budget (167 out of 300), with the latter just at the beginning of the week, paving the way for EU to release the next tranche of payments ...


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When Will Spain Request Bailout?

October 31, 2012
When Will Spain Request Bailout?

The question that’s constantly on the minds of currency traders: When will Spain request bailout? Although there is no definitive answer, here are some interesting observations that I like to point out.  Rajoy  said today (10.31) that: “Getting through current crisis will depend on both domestic and European policy…” Which in essence, if you read between the lines, is calling for the EU to step in, or more specifically, the ECB to use its OMT program.  This point was further confirmed when Rajoy added that “EU needs to help Spain to meet budget goals…”, which undeniably is asking the EU (or ECB) ...

October FOMC Statement Analysis

October 24, 2012
Bernan Style

We just received the official October FOMC Statement and here is a quick look at the changes from the September release… Information received since the Federal Open Market Committee met in September suggests that economic activity has continued to expand at a moderate pace in recent months. Growth in employment has been slow, and the unemployment rate remains elevated. Household spending has advanced a bit more quickly, but growth in business fixed investment has slowed [PREV: "Household spending has continued to advance, but growth in business fixed investment appears to have slowed"]. The housing sector has shown some further signs of ...

More Easing Expected From Bank Of Japan (BOJ)

October 23, 2012
Bank of Japan easing

Numerous rumors have been floating around for the past few weeks on further easing by the Bank of Japan in the upcoming rate meeting, October 30.  As a matter of fact, today’s Japanese Press report stated that: (JP) BOJ planning to conduct more easing and increasing asset purchases at the next meeting on Oct 30 in the tune of $250 Billion Dollars… …which helped the USDJPY pair breach the 80.00 level briefly, although the denial from the newly appointed Minister of Finance Jojima drove the pair down immediately, as he said: No truth to reports that Government is requesting BoJ to ...

Credit Rating Agency Moody's Issues A

Credit Rating Agency Moody’s Issues A “Stay Of Execution” For Spain…

October 17, 2012

Credit Rating Agency Moody’s shocked the market yesterday by keeping Spain’s sovereign credit rating at BAA3, the lowest investment grade, instead of junk status as so many analysts have been predicting.  This is not only another “too big too fail” scenario in my opinion, but really brings Moody’s integrity into question as over 100% of their ratings actions following an Outlook Negative since 2010 have been downgrades, except of course in this case when a ratings downgrade would trigger a financial tsunami such as with Spain today… Here are the details to Moody’s action: (ES) MOODY’S AFFIRMS SPAIN SOVEREIGN RATING AT BAA3 (lowest ...