Archive for November, 2011

Markets started off on a predominantly soft tone this morning after the overnight downgrades of global banks by Standard and Poor’s, but central bank intervention on a co-ordinated scale saw the tide turn in a significantly positive fashion. This started with the Chinese central bank cutting its bank reserve requirement ratios by 50bps to 21%,...
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A choppy session saw the FTSE 100 swing between gains and losses of around 0.6% on the day. Traders gauged a rather uneventful Chancellors Autumn Statement, another Italian bond auction that saw yields rise sharply beyond the 7% level but was well supported and a meeting of Eurozone finance ministers in Brussels to agree...
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Last week saw risk aversion increase significantly as stock markets dropped dramatically however this week looks a little firmer. Articles in the Italian media have suggested that the International Monetary Fund (IMF) is preparing a €600 billion deal for Italy in the event of deterioration in the debt crisis and this could provide spread...
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The US dollar hasn’t done as well as the class-leading Japanese yen in the last seven days, but it has followed close behind. Disarray in Euroland continues to fuel demand for the two main safe-haven currencies. America’s economy has also helped the dollar’s case, delivering statistics that suggest improving conditions and increasing activity. Perversely, the...
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Stock markets recovered overnight despite a huge drop in the Dow Jones, but markets remain nervous and the rebound in risk assets could be brief. A disappointing bond auction yesterday in Germany was a reminder to everyone of the seriousness of contagion across the Eurozone. The reason for concern is if the core is...
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Compare and contrast: the interest rate on the three month note issues by the Spanish yesterday was 5.11%, the interest rate on the US equivalent was 0.01%. Spanish borrowing costs jumped from last month’s auction partly because we are in-between governments and the incoming party is still unsure if it will be able to...
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The Greenback continues to benefit from a growing ‘risk off’ attitude developing in the markets. Furthermore, the recent improvement in US data, including October’s existing home sales yesterday reduced pressure on the Fed for additional QE, which in turn supported the Dollar. We have an opportunity to see the Fed’s latest view on this...
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The accelerating flow of game-changing news from Euroland has stunned online spread trading investors into inactivity. In the space of little more than a fortnight, there has been a summit agreement on an all-embracing rescue plan, a call for a referendum in Greece, the resignation of the Greek premier, a boycott of Italian sovereign...
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In retrospect it was rash to speculate a week ago that the world was “no longer quite so worried about the euro”. The Greek prime minister’s call for a referendum last Monday evening set alarm bells ringing again and culminated in Mr Papandreou’s resignation at the weekend. The new great white hope in Greece...
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The NZD, the euro and the Canadian dollar were in step with each other last week. All three rose by 0.5% against the pound, lagging behind the Australian dollar and the rand but leaving the US dollar and the yen to eat their dust. As is often the case, the NZD spreads’ relative success or...
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