Archive - March, 2013

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Cypriot capital controls are weighing on markets this morning. The draconian measures have been put in place, to slow the pending bank run, as investors attempt to pull assets from the crippled Cypriot financial system. Individual accounts with balances below €100,000 will be “unaffected” by the haircut, however with large balances expected to receive significant haircuts, funds are expected to exit the country. The mood is reported to be hostile in Cyprus, as residents feel…

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Please be aware that we have had numerous enquiries from clients enquiring about connectivity issues with the trading platforms. These issues with connectivity are associated with a fibre optic cable being cut under Arabian Sea near Karachi. The disruption with trading is isolated to this region and has been attributed to the loss of connection. Here are some regional articles covering the news story: The International News The Express Tribune We apologise for a…

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Cypriot capital controls will be in place for 7 days, starting Thursday and apply to all accounts irrespective of currency or if the bank is part of the bailout agreements: Suspension of cashing cheques, allow check deposits All card transactions are capped at €5,000 per person, per month A ban has been imposed on leaving the country with more than €3,000 per person Interestingly an exception is for student tuition payments, though these are payments which h…

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Dijsselbloem, the Chair of the Eurogroup set the markets into free-fall, after stating that the Cypriot bailout was a “template for other Euro-area bailouts.” This comment of the Cypriot agreement being a precedent for future bailouts sent European bank shares crashing. However over the last 48 hours, hindsight has led to considerable backtracking by EU officials that in fact the Cypriot programme isn’t a template (Bloomberg). The losses the haircut on deposits could…

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The chair of the Eurogroup meetings, Jeroen Dijsselbloem, spooked markets with comments that the last-minute bailout of Cyprus set a precedent for any future interventions. The so-called bail-in of individual savers has been met my disbelief of many, after the move that was supposed to help Cyprus, send shockwaves through Europe. The unprecedented move led many to quickly draw parallels between Cyprus and other EU countries (PIGS), though EU official’s continuously stated that Cyprus w…

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Abshire-Smith is pleased to announce a white label promotion from the developers of the award winning VertexFX 10. From the 20th Match - 19th April regulated brokers (FSA UK, CySEC etc) can white label VertexFX 10 with zero setup fee. This is an exceptional offer, with minimal lead time from application to packaging, providing your clients with an extra trading platform. Abshire-Smith is an announced liquidity provider for the trading platform, and provides aggregated liquidity…

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The Chancellor of the Exchequer George Osborne is to announce the UK’s budget to Parliament at 12:30 GMT. This is a key date for the markets as rating agencies have identified its importance for the credit rating and outlook for the UK. Sterling has been under considerable pressure since the start of the year with credit rating agency Moody’s downgrading the UK for the first time since 1978 from the top level of AAA to Aa1. Osborne had continually cited the importance of th…

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The Bank of England’s Monetary Policy Committee (MPC) minutes were released this morning and showed that its members voted 6 to 3 against increasing quantitative easing (QE). The current level of the Asset Purchase Facility (AFP) setup in January 2009, is £375bn, with Governor King and two other voting for an increase of £25bn to a total of £400bn of QE. Following the release of the minutes, Sterling rallied as no other members had voted for an increase of QE from its…

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Bank of England Minutes of the Monetary Policy Committee Meeting 6 and 7 March 2013 (Link) http://www.bankofengland.co.uk/publications/minutes/Documents/mpc/pdf/2013/mpc1303.pdf The above link is to an external website and Abshire-Smith are unable to accept responsibility for its contents.…

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The situation continues to develop as comments from EU officials and Cypriot politicians fuel market speculation. Sources for many rumours are unclear leading to speculation and confusion as to what the current situation is. The banks remain closed in Cyprus and the final terms (not yet known) are still required to be ratified by a Cypriot government. The Cypriot coalition has only recently taken office and the required majority for a vote might not be met. Market chatter has beg…

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Today’s trading has been fuelled by speculation, rumour with only brief new detaisl. It is clear that the initial announcement on Saturday caught many investors off-guard, however little clarity has emerged since then. As currently stands Cypriot banks will be closed tomorrow (Tuesday) and potentially remain closed on Wednesday and Thursday. The parliamentary vote to ratify the bank deposit haircut has been postponed, to give politician’s time to renegotiate the EU Deal.…

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To the surprise of analysts it was announced over the weekend that as part of the bailout agreement, Cypriot bank deposits would be imposed with a levy, or a so-called tax. The bailout terms are harsh in comparison to many, with the unprecedented terms effecting individual investors directly. The situation is fluid, and the initial terms of the “tax” are rumoured to have changed, with government officials in discussion on how to move forward. Today and tomorrow are now bank holid…

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During the early part of the US session yesterday Sterling was bid in FX space, reversing recent declines. Mervyn King current Governor of the Bank of England had a pre-recorded, exclusive interview with ITV News (British News Channel) however the price action indicates that this could have been leaked. King said that the recovery is finally “in sight,” only a short time after he changed his stance and voted for further quantitative easing. In the interview he said that if you re…

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Bank of England chews over negative interest rate plan - CityAM Sterling has steady following its recent rapid decline, though the cable is currently unable to break the psychological 1.50 level The unemployment rate has remained steady at 5.4 per cent in February as the Australian economy added 71,500 jobs, the biggest monthly gain in 12 years -SMH Bank of England's Bailey warns that UK banks need more capital, this idea is controversial as some believe higher capital…

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