A flicker of hope in the depths of despair

By GG Analyst in Reviews 0 Comment

EUR/USD

Many traders know very well that May is not the best month for buying stocks, and this year was not an exception. Yet the most interesting thing is that the crisis peaked in May not only because of the economic slowdown, but also as a result of political uncertainty. The biggest mystery surrounded Greek elections and their outcome. Given their preference to the parties supporting the EU membership and bailout Greeks have made it clear that they don’t want to be Europe’s outcasts.  Many commentators still keep estimating how favourable the EU disintegration could be in the current situation, but it more…

Hawkish central bankers?

By GG Analyst in Reviews 0 Comment

EUR/USD

Two-three months ago we took the absence of news as good news. At that time the incoming statistics often proved to be either worse than expected (on US, Australian and Chinese economies) or utterly poor (on the sovereign crisis of the euro-zone). Then in the periods of lull there still were some buyers of cheapened assets, and the situation was gradually changing from ‘positive’ into ‘moderately positive’ and eventually slipped into what we see now. The recent employment data turned out to be so poor that immediately awakened anticipations of further QE across the market. The confidence in this run of more…

Between Fed’s QE3 and ECB’s LTRO

By GG Analyst in Reviews 0 Comment

EUR/USD

Mariano Rajoy, Prime Minister of Spain, keeps upsetting the markets with his unexpected remarks. Yesterday he kicked the euro from 1.2520 down to 1.2410, pointing out that the country’s banking system is “in an extremely difficult situation”. He also mentioned that joint euro bonds could ease the pressure currently imposed on the Spanish banks. Nevertheless, the aforementioned drop was soon followed by another attempt to go up to 1.25, where the pair found itself earlier today. Yesterday afternoon the markets were full of hope that after the phone conference the G7 finance ministers and leaders of the local CBs would take more…

American stocks up, EUR down

By GG Analyst in Reviews 0 Comment

EUR/USD

The ongoing concerns around Spain impede an upward bounce in the euro. Yesterday EUR/USD hit a 2yr low, breaking through 1.25 and reaching the level of 1.2457 at some point. Portugal and Spain are still suffering the capital outflow. The yield spread between these countries’ 10yr bonds and German Bunds exceeds 1000bp for Portugal and 500bp for Spain. The German stocks cost more than their American counterparts (i.e. their yield is lower). This current state of affairs should hardly be attributed to investors’ confidence in the higher growth in Germany against the USA, but can be rather explained by the fact more…

Markets are sick and tired of falling and make feeble attempts of correction

By GG Analyst in Reviews 0 Comment

EUR/USD

Yesterday the markets rewrote their local lows on growing concerns around Greece. EUR/USD sank as low as 1.2680, but by now has slightly bounced up to 1.2745. We cannot say that the situation has changed much for the better, so the current movement should be regarded as nothing more than a mere correction after a rather large anti-rally. Since the beginning of May the pair has dropped by 6 points from the 1.3260 level. As has already been mentioned, this year’s movement resembles those of the previous two years, however this time the decline is half as strong as before. The more…