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Euro Crisis To End In November?

October 15, 2012
Euro Crisis To End In November?

Risk appetite kicked off the week as press reports on potential extension for Greek austerity implementation and Spanish bailout request hit the wire during the European trading session: (EU) EU’s Rehn: Reiterates aim to complete talks with Greece by mid-Nov; Considering giving Greece more time for fiscal reforms Hope to reach pact with Greece on fiscal goals and structural reforms this week ESM can activate leverage function whenever needed. Spain govt is open to considering a bailout request. (GR) EU/IMF/ECB Troika inspectors have concluded that Greece needs two more years to complete its fiscal reform. IMF seeking about €50B in debt ...

IMF Downgrades World Economic Outlook

October 9, 2012
World Economic

IMF released its world economic outlook report on Monday, downgrading the 2012 outlook to 1.3% for advanced economies, and 3.3% for global economies.  The projection by region is as follows (Source img.org): In the United States, growth will average 2.2 percent this year. Real GDP is projected to expand by about 1½ percent during the second half of 2012, rising to 2¾ percent later in 2013. Weak household balance sheets and confidence, relatively tight financial conditions, and continued fiscal consolidation stand in the way of stronger growth. In the euro area, real GDP is projected to decline by 0.4 percent in ...

U.S. Nonfarm Payroll (NFP) Could Suprise To The Upside…

October 3, 2012
NFP Bernanke

US BLS (Bureau Of Labor Statistics) will release its Nonfarm Payroll Employment Report on Friday, and it is probably the single most important NFP release for the new quarter as traders look for signs of improvement after the sobering statement from the Feds two weeks ago that prompted the launch QE3: The Committee is concerned that, without further policy accommodation, economic growth might not be strong enough to generate sustained improvement in labor market conditions… This release will, of course, justify QE3 if we get a below 100K release, and in the process drive USD weaker as more Fed stimulus is ...

EURUSD Forecast: Sunny With A Chance Of Upward Breakout…

October 1, 2012
EURUSD Forecast

Market released a slew of data out of Europe today for the new week, month, and quarter, and needless to say, the sentiment has been positive.  Here’s why: (EU) EURO ZONE SEPT FINAL PMI MANUFACTURING: 46.1 V 46.0E (EU) EURO ZONE AUG UNEMPLOYMENT RATE: 11.4% V 11.5%E (fresh record high) (DE) GERMANY SEPT FINAL PMI MANUFACTURING: 47.4 V 47.3E (FR) FRANCE SEPT FINAL PMI MANUFACTURING: 42.7 V 42.6E (41 month low) (IT) ITALY SEPT PMI MANUFACTURING: 45.7 V 44.0E (ES) SPAIN SEPT MANUFACTURING PMI: 44.6 V 44.2E (highest since Feb 2012) (GR) GREECE SEPT MANUFACTURING PMI: 42.2 V 42.1 PRIOR ...

Spanish Budget Paves The Way For Future Bailout…

September 28, 2012
Spanish Budget Paves The Way For Future Bailout...

Spanish Budget for 2013, announced today, will have a ceiling of €126.762 billion 58% of the forecast adjustment in the accounts will be made up of costs (budget cuts), while 42% will come from income (tax).  The Government are to freeze the wages of Civil Servants for the third year, but public employees will see a return to the extra Christmas payment. The Government is putting up pensions by 1%, using 3.6 billion € from the Reserve Fund to do so. The money available for the dependency help program destined for the regional communities will see a 200 million reduction ...

Greece And Spain Uncertainties Weigh On The Euro…

September 25, 2012
Greece And Spain Uncertainties

(ES) Spain Deputy PM Saenz commented that Catalonia is adding a new crisis for Spain. Spain rules out giving Catalonia control of tax revenue. Spain will activate regional liquidity fund this weekend. PM needs to know how much ECB would spend on debt. (GR) Greece Fin Min Stournaras: Greece Fiscal gap to meet 2013 and 2014 budget targets currently stands at €13.5B – Note: Prior reports have suggested that Greece and the Troika were negotiating €11.5-13.5B in austerity measures. (GR) There are concerns that Greece will need additional aid in order to finance its budget from 2015 – German Press ...

Is EURUSD Consolidation Temporary?

September 21, 2012
Is EURUSD Consolidation Temporary?

(EU) Euro was spurred higher after FT Deutschland speculated Spain was drawing near to a formal rescue plan that may be unveiled as early as next week. Press report also indicated Spanish govt has formulated a specific economic reform program that was being discussed behind the scenes among EC and Spanish govt officials. (EU) During the session some Euro weakness being attributed to the SNB selling EUR/AUD (this is part of diversification from maintaining the EUR/CHF peg); AUD/USD for its part was up +0.8% above $1.05. (EU) There was also a report that a Hedge fund was taking off a ...

Bank Of Japan’s Response To QE3 – ¥10T In Asset Purchases…

September 19, 2012
boj-response-to-QE3

(JP) BANK OF JAPAN (BOJ) LEAVES TARGET RATE UNCHANGED AT 0.0-0.1%; EXPANDS ASSET PURCHASE PROGRAM BY ¥10.0T TO ¥80T; CUTS ECONOMIC ASSESSMENT Raising total size of the program through purchases of assets from ¥45T to ¥55T, with ¥5T in additional JGB purchases and ¥5T in additional T-bill purchases; Keeping fixed rate fund supplying operation at ¥25T. Total size is ¥55T + ¥25T = ¥80T To extend asset purchase deadline to end Dec 2013. To purchase treasury bills by end June 2013. To remove minimum bidding yield for JGBs, corporate bond buying. New economic assessment: Pick-up in economic activity has come ...

Fed QE3 To Increase To $85B By Year End – Chicago Fed Evans

September 18, 2012
Fed QE3 increase

(US) Fed’s Evans (FOMC alternate, dove): This was the right time to act, the Fed QE3 is making modest, safe policy moves. Timid policy moves would only prolong economic problems. Without Fed stimulus, the economy would be worse. Fears of Fed-fueled inflation are consistently wrong. US economy faces significant risk the global economy will weaken, plus risks from the crisis in Europe and the fiscal cliff. The economy faces a demand problem, not a structural problem. (US) Fed’s Evans: Fed is moving as quickly as it can on the economy; it is a positive that the asset purchases time frame is ...

September FOMC Statement Analysis And Forecast

September 13, 2012
FOMC meeting infinity

The FOMC just released its September Statement with several surprising changes, here is a quick view of what was changed and what was not: Information received since the Federal Open Market Committee met in August suggests that economic activity has continued to expand at a moderate pace in recent months [previous "economic activity decelerated somewhat over the first half of this year"]. Growth in employment has been slow, and the unemployment rate remains elevated. Household spending has continued to advance, but growth in business fixed investment appears to have slowed [previous "Business fixed investment has continued to advance. Household spending has ...