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Action To Respond To The EuroTitle:
Oil little changed as stocks retreat, dollar rises
Oil prices hovered around $106 a barrel on Wednesday as an initial boost to sentiment from a European Central Bank offer of cheap, three-year loans to banks subsequently faded on diminishing hopes the move would ease Europe's liquidity crisis.
The ECB's supply of limit-free and ultra-cheap cash initially boosted sentiment across financial markets after banks took up a greater-than-expected 489 billion euros, but the impact subsided as investors weighed the pressure facing European banks.
"The major impact today was the ECB three-year funding, which first caused some cheer but quite fast changed into a sell-off as the major lending to banks underpins that the banks will not lend out to each other," said Thorbjoern Bak Jensen, an analyst at Global Risk Management.
Brent crude was down 54 ...
Title:
BoJ leaves policy unchanged
FUNDAMENTAL OUTLOOK at 0800 GMT (EDT +0400)
USD
The Bank of Japan left policy entirely unchanged at its meeting overnight, as widely expected. Market focus is now fixed squarely onEuropeagain as the ECB gears up for the first of two three-year LTROs. By all accounts, the take up is expected to be strong and, if so, markets would likely interpret this as a positive development. Asian equities and the AUD in particular were stronger overnight, partly in anticipation of what the liquidity injection will mean for risk appetite. Not only will some of the funding be recycled back into government debt, but the release of abundant liquidity would also secure bank financing over the coming year. We still believe it is difficult to reconcile a government desire for banks to continue buying debt ...
Title:
Dukascopy Morning Forex Overview : 19/12/2011
Fundamental Analysis
EUR
"The losses are enormous"
- Jacques-Pascal Porta, fund manager at Ofi Gestion Privee
Credit Agricole SA, France’s second largest bank by assets, will make losses in 2011, write of 2.5 billion euros worth of assets and cut approximately 2,350 jobs as European debt crisis looms. Fitch and Moody’s downgraded the company’s credit rating this month.
USD
"Inflation will crest around here. This will give the Fed more comfort in terms of implementing further monetary policy"
- Jacob Oubina, a senior U.S. economist at RBC Capital Markets LLC
U.S. month on month consumer prices stagnated in November after declining 0.1 per cent in October, said the Bureau of Labor Statistics on Friday. Prices were little changed as gasoline and food prices dropped, supporting the ...
Title:
SunBirdFX Daily Market Analysis : 12/19/2011
www.sunbirdfx.com
Another negative week has ended in Wall Street as indices shed 3%. In spite of encouraging data on the US economy and reports about a progress in the European bailout plan, the investors remain pessimistic regarding the financial situation. More and more analysts are talking about that 2012 is going to be a bearish year, the stock markets around the world are responding to that.
On the technical aspect, we mentioned in the previous weekly analysis that the US indices reached the resistance of the downtrend line and they made the expected bearish-reversal. We also mentioned that there were large gaps that were opened during the recent rally. The gaps tend to pull the markets towards them, and one of the gaps was closed during last week. There is still another one ...
Title:
Stocks fall, dollar up after death of Kim Jong-il
(Reuters) - Asian equities and U.S. stock index futures fell, with South Korean shares tumbling as much as 5 percent, while the dollar gained on safe-haven appeal after news of the death of North Korea leader Kim Jong-il raised fears of regional instability.
The Korean won fell 1.8 percent on the news, announced at 0300 GMT, which financial markets fear could mean instability in northeast Asia because of the unpredictability of a leadership transition in the impoverished, secretive North.
Commodities also fell broadly, as investors reacted by shedding riskier assets in favour of the safe-haven dollar.
"The risk or fear that the death of Kim Jong-il will lead to provocation by North Korea is pressuring selling," said Hiroyuki Fukunaga, CEO of Investrust, in Tokyo. "Right now, there's ...
Title:
EUR Finally Caves; Downside Remains in Focus
The Week Ahead
Highlights
EUR finally caves; downside remains in focus
Ratings agencies on the move
Commodities may be set for a break lower
EUR finally caves; downside remains in focus
Last week I wrote about the puzzling market reaction to the disappointing EU Summit, but the delayed response finally came at the start of this past week's trading. EUR/USD collapsed below recent range lows in the 1.3220/50 area, forcing a flood of option-related selling on the break down, before bottoming around 1.2950 and finishing the week just above the 1.3000 level. Reasonably successful bond auctions from Spain and Italy later in the week calmed markets' worst fears, but Italian government 10 year yields remain elevated at 6.55%, and the TED spread (a measure of inter-bank lending ...
Title:
Euro falls as ECB disappoints, summit eyed
The euro fell the most against the dollar in almost two weeks on Thursday after the European Central Bank chief threw cold water on hopes of bold actions to contain the euro zone debt crisis.
Investors, however, refrained from selling the single currency more aggressively ahead of a key European Union summit on Friday.
In a press conference following the ECB's decision to cut interest rates by 25 basis points, President Mario Draghi discouraged expectations the bank would massively step up buying of government bonds.
He also said the euro zone's rescue fund should remain the main tool to fight bond market contagion, despite its clear limits, and that it was illegal for the ECB or national central banks to lend money to the IMF to buy euro zone bonds, appearing to veto one firefighting ...
Title:
Euro tumbles as ECB fails to take bolder action
The euro slumped on Thursday as the ECB dampened hopes about escalated bond purchases that could put a cap on yields in debt-ridden countries, as well as lending to the IMF to help prevent the crisis from spreading to the region's healthier economies.
Investors overall were disappointed that the European Central Bank did not take bolder action to tackle the two-year old debt crisis.
The ECB did cut interest rates by 25 basis points to 1.0 percent, but ECB President Mario Draghi said the bank did not consider cutting rates further and the decision to ease was not unanimous.
"People thought there would be action by the ECB, which there was, but clearly he has dampened expectations for some extraordinary ECB response," said John McCarthy, director of foreign exchange at ING Capital Markets ...
Title:
Dukascopy Afternoon Forex Overview : 08/12/2011
Fundamental Analysis
USD
On Wednesday S&P 500 gave up 0.2% or 2.54 points up at 1,261.01. On the upside were financials: Morgan Stanley gained 4.58%, Goldman Sachs Group added 3.92% and Bank of America Corp. ascended 1.90%. Nevertheless, U.S. benchmark index opened lower on Thursday. At the moment of writing S&P 500 is trading at 1,252.80 or 0.65% down as ECB president Mario Draghi rejected the idea that ECB could increase purchases of debt-troubled euro-nations.
GBP
The Bank of England announced it left the key interest rate unchanged at 0.50% for the 33rd month in line. The decision was expected by analysts. The asset purchasing programme's budget stayed at the same level of GBP275 billion. After announcement the pound advanced against the USD with GBP/USD pair currently trading at 1. ...
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