Central banks’ games

By GG Analyst in Reviews 0 Comment

EUR/USD

Concluding from the recent speech of Janet Yellen, the new chairman of the Fed promises to be even milder than Bernanke. In the comments, prepared for today’s report to the Senate Committee, she says that yet the Fed has got lots of various means to support the economy and the labour market, which are now far from the potential rates. Upon the whole she believes that now it is necessary to provide as many incentives for growth as possible in order to return to the normal mode of the monetary policy. In this case we see a striking difference between the more…

Does Greece take a back seat, giving way to Spain?

By GG Analyst in Reviews 0 Comment

EUR/USD

The single currency didn’t continue last week’s downturn yesterday. It was good news, but at the same time the currency didn’t grow on the subsiding fears around Greece. And this is already the signal to give a closer look to the issues currently disturbing the markets. As always there are two directions: Europe and the USA. However, while concerns about America seem to be the whims of a spoilt child, European issues look like life-and-death ones. Tonight we’ll see the Fed’s decision on the monetary policy. No factual action is expected: everybody looks forward to learning the committee’s evaluation of the more…

Is EUR becoming the carry-trade funding currency?

By GG Analyst in Reviews 0 Comment

EUR/USD

The data on the ECB’s direct loans proved adverse for the common currency and eventually generated demand for the dollar. It is quite an interesting result as the figures turned out to be close to the middle of the predicted values. Three-year loans totaled 530 billion euro. However, the euro failed to make any gains on the news. On the other hand, the peripheral bond yields began to decline straight away, thus indicating that the fears for the fate of these countries subsided. Judging by the influence such loans produce on the currency, they can be definitely attributed to quantitative easing, more…

European Banks Borrow from ECB to Deposit to ECB

By GG Analyst in Reviews 0 Comment

EUR/USD

Last week the demand for three-year loans issued by the ECB at a fixed rate was twice as high as expected and amounted to 489 billion euros. And here is another piece of news: banks’ deposits to the ECB set a record making 412 billion euros. Banks behave like bargain hunters in a sale. They‘re grabbing everything that is cheap without thinking whether they really need all this stuff. In addition, the increase in the ECB deposit facility reflects the deplorable state of affairs in the sphere of interbank lending. It is not very good. Banks are waiting to see what more…

That’s all, Folks!

By GG Analyst in Reviews 0 Comment

EUR/USD

On Monday the euro fell below 1.32 due to the investors’ disappointment in the EU summit. Problems haven’t been solved; all we have now are just pledges to consider a closer fiscal union in half a year – an eternity for a debt crisis! EURUSD is now at 1.3170. It was at 1.3370 at the beginning of Monday’s trading. Moreover, the received comments have once again proved that Germany is not very willing to accept current terms. The fact is that Bundesbank can issue a loan to the IMF only when given the consent of legislators. As follows from the previous more…