Euro

Following the Christmas trading break and prior to the New Year, liquidity is thin as many are away from their desk. In the FX market, the limited participant’s leads to reduced liquidity, movement in the majors can be more sporadic than usual. Spreads are slightly wider in the institutional market to reflect the fewer traders at their desk and limited risk appetite. (This doesn’t affect Abshire-Smith trading accounts with fixed spreads). In the FX market USD has been on th…

Continue Reading →

The euro has retraced some of the move upwards against the dollar from last week, when Bernanke surprised markets and didn’t taper the Feds bond-buying programme. Tuesdays IFO Business climate index data from the powerhouse of Europe (Germany) was the highest since March 2012, but was below analysts’ expectations. Technical Outlook The pair is currently testing the 14.6% Fib with the RSI pointing higher, which could see the euro push back up towards the 8-month high r…

Continue Reading →

Technical Outlook Level of resistance 1.3888 (23.6% Fib retracement line) Major support at 1.3104 (50.0% Fib) supporting Thursday trading RSI is mid-range, currently point down, but could support a retest high Macro Outlook The euro has traded upto a week high against the greenback during the Asian session, coming off during the European trading. Trading has been focused around the potential military strikes from a US/French coalition following the alleged use o…

Continue Reading →

The first trading day of September and the final quarter of 2013 begin. The 5 year anniversary of collapse of investment bank Lehman Brothers is a few days away, which was one of the major casualties of the credit crunch, which has driven major economies into recession and the Eurozone to the brink of collapse. The week begins with a raft of countries releasing their manufacturing data. It began with China, as a major consumer and producer; the slowdown has been a significant concern t…

Continue Reading →

*In the US it is a national holiday today, Independence day. This will affect the trading hours of certain markets with us remaining closed for the session, please see your client emails for further details* The markets seem relatively subdued this morning ahead of BoE and ECB announcements, with the US closed for Independence Day volumes are likely to be lower. Bank of England Mark Carney began his term as the first foreign national to become the Governor at the Bank of En…

Continue Reading →

European Central Bank Meeting Thursday 2nd May 2013 The European Central Bank (ECB) as expected has cut interest rates by 25bps to 0.50%. -44 of the 70 economists surveyed expected the ECB to cut by 25bps -1 economist predicted a 50bps cut -Standard Chartered, CitiGroup, Credit Suisse, Commerzbank, JPMorgan, Goldman Sachs, Barclays and Deutsche all expected the ECB to cut rates by 25bps The macro data coming from the Eurozone has been mixed, with a two tiered No…

Continue Reading →

The US Federal Reserve hinted that it may accelerate their current quantitative easing programme. The FOMC said that they were “prepared to increase or reduce the pace of its purchases to maintain appropriate policy accommodation as the outlook for the labour market or inflation changes.” The disappointing data from the US and stubbornly high unemployment is a concern to the Fed, citing the fiscal policy from Congress responsible for restraining economic growth. Facebook re…

Continue Reading →

PBOC's Gang Yi: Likely to widen RMB trading band in the near future -MNI More than two-thirds of the Japanese public now believe domestic prices will rise in the coming year, a government survey showed Wednesday, reflecting how the aggressive anti-deflation policies of Prime Minister Shinzo Abe's government have started to take root in the minds of the people -WSJ China’s property rebound gathered pace in March as new home prices in the southern city of Guangzhou ju…

Continue Reading →

Uncertainty is something that investors will attempt to avoid at all costs. Political instability, verging on a nuclear war could cause a major shift of assets into safe havens. If the current words escalate, there is a real threat of something far more worrying to occur. North Korea has increased tensions, by threatening the US with a nuclear strike. The US realises that this the state poses potential danger and has deployed a missile launcher in Guam - Guardian More than half of all…

Continue Reading →

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…

Continue Reading →

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…

Continue Reading →

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…

Continue Reading →

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…

Continue Reading →