5y Cds Spread

Forex News and Events: In Asia session, liquidity was thin and flow were light as locals celebrated the second day of the Chinese New Year. BoJ unanimously keeps rate unchanged at 0-0.1% and asset-purchase fund left at JPY20 trn as was universally expected. In addition, monthly JGB purchases were held at JPY1.8 trn. EURUSD took a hit, falling to 1.2988 on a WSJ article and comment from Juncker ran on the wire. The WSJ article suggested that Portugal would need a second restructuring bailout. While Junkers’ commented that he believes that Greek adjustment program was off-track and new action had to be taken. But by later session market shad shrugged off the warning and went back trading on the blind optimisms that had gotten them to 1.3000. Yesterday the IMF publicly warned that the ...

FUNDAMENTAL OUTLOOK at 0800 GMT (EDT +0400) USD The euro settled above 1.30 during the US session as investors remain hopeful of a settlement on the Greek PSI. However, reports remain conflicting – a finance ministry source noted that there will be a final offer on the bond swap by February 13th, and the Eurogroup said that current talks on the debt deal were ‘constructive’, but other sources warned that there is currently no intention by either the Eurozone or the IMF to give more money to Greece. However, there is more talk of a larger firewall for the Eurozone, especially via combining the ESM and EFSF if IMF funding is harder to come by. As a lot of the upside in EUR has come on the back of expectations of a positive outcome, swift unwinding could occur if reports suggest the result ...

Forex News and Events: Another day where the lack of news suggesting any progress in the European sovereign crisis, translated into further pullback for risk correlated FX trades. There are clear signs Eurozone fears have increased and contagion spreads unchecked. While Italy and Greece seemed to have successfully instituted new technocratic governments, and Greece and Spanish short term auctions went off without any major glitches, it seem like investors are just not taking any chances. European yields continued to climb, while CDS prices suggest a high level of contagion is spreading. Spanish, French and Italian CD prices in 5yr vehicles hit new record highs. Italy's 10 yr yields are now safely back above 7.00%, with the ECB nowhere in sight. There is additional fears that the ...

Forex News and Events: The plethora of risk events scheduled this week have generated a full-fledged flight to safety. Yesterday, weak PMIs and news flow from the EU put the spotlight on EU debt concerns and fears of a global economic slowdown. It seems that risk is everywhere and safe haven trades are extremely crowded (making for their own risk events). Welcome to September. Gold looks comfortable above $1900 while US-Ts and JGBs yield curves continue to flatten as investors rush into anything deemed “risk free”. Asian regional indices dropped again following yesterday’s weak European session as the Nikkei dropped -2.20% and Hang Seng -1.40%. In FX price action, all the making of a risk off event with growth currencies such as AUD, NZD, NOK and EUR is getting sold off and active ...

Forex News and Events: With European sovereign debt concerns re-emerging, risk aversion has been the dominate theme as the Forex market opens this week. Asian regional equity indices were marginally lower as the USD gained across the board (S&P 500 managed to climb +0.56% close on Friday). An FT article stated that the ECB’s Trichet had inched back on this view that in some cases EU bonds in default could be consider as collateral. The ECB’s semi firm commitment to accept bonds in default had previously offset some of the credit agencies downgrades. Trichet stated “the ECB could not accept defaulted bonds as collateral” and that “other EU governments would have to come up with ways to keep Greek banks in business if they continued pushing for a bail-out plan that would lead to bond ...

USD continued to gain ground at the start of the trading week as EU sovereign debt concerns have once again returned to the forefront of investor’s minds. It seems the disappointing payrolls report on Friday and the market’s brief focus on the US’s less-than-stellar economic recovery was short lived. Expect flows into safe haven currencies to be the dominant FX theme this week. EURUSD slipped through the critical 1.2965 support as USDJPY traded between 82.90 and 83.30 right on top of daily cloud cover. An article by Reuters quoted an unnamed EU inside source this morning suggesting that the German and French (along with other EU nations) are pressuring Portugal to take an EU / IMF bailout similar to those given to Greece and Ireland. The unidentified source stated "France and Germany ...

In general, the markets were relativity quiet during the Asian session so the USD took advantage and continued to grind higher. Clearly traders are now positioned for strong payrolls and given the number of strong arguments for expectations outstripping reality, there is plenty of room of disappointment this afternoon. Well respected US & UK banks are calling for private payrolls to come in between 100k and 450k (from specific strategy model) respectively, general consensus around 175k, illustrating the divergence of thinking. But before we get into today’s highlight, markets will be focused on EU CDS prices and yield spreads. After the last few days of pressure on peripherals, traders will be watching for follow through. Yesterday’s EU Consultation Paper gave Eurozone sovereign (and ...

(Reuters) - Moody's Investors Service on Monday downgraded Hungary's credit rating two steps to Baa3, one notch above junk, citing long-term fiscal concerns and external vulnerabilities, and said more downgrades may follow. Following is a sampling of analysts' comments. MARKET REACTION: The forint traded at 280.35 at 1127 GMT from an opening quote at 278.40. Bond yields rose 5 to 10 basis points to reach 8.1 percent on the 10-year segment, 8.03 percent on the 5-year and 7.95 percent on the 3-year paper. CDS spreads rose by 20 basis points to 385. MOODY'S COMMENT: DIETMAR HORNUNG, SENIOR CREDIT OFFICER "We assess that the Baa3 rating is the right rating and reflects Hungary's credit worthiness appropriately. That's why we went for a two-notch downgrade -- based on our concerns ...

FX Strategy Weekly Market Outlook => Dovish FOMC puts more downward pressure on the USD The FOMC's hint that more QE may be coming in November sent the USD into a renewed decline against all the traditionally more risky currencies, with the EUR, AUD and Scandis leading the way. It is hard to oppose this trend short term even though the USD is reaching very cheap levels. The USD made a new historic low against the CHF this week, but it seems likely that more risk positive currencies will perform better next week as a more positive risk tone emerged at the end of the week. The AUD is in focus as parity approaches, but there is better value in the NOK and SEK. GBP should also be a strong performer as EU related payments are expected to push EUR/GBP lower. The US ISM on Friday will be the ...