Republicans won’t give in without a struggle

By GG Analyst in Reviews 0 Comment

EUR/USD

Doctor House was right – everybody lies. This time those, who believed that it would be easy to agree on the fiscal cliff issue, proved to be mistaken. The good beginning of trades in stock exchanges on China’s agitation was ruined by poor news from the USA. The republicans refuse to support tax increases. They stick to the idea of further active economic stimulation, while Obama advocates spending cuts. We still believe that the middle way here consists in tax increases for the rich and preservation of some tax benefits. Yet republicans want deeper spending cuts on health care than Obama more…

Another rise in the hope of the deal

By GG Analyst in Reviews 0 Comment

EUR/USD

The markets were quite brisk yesterday. Behind that again were Obama’s comments on the fiscal cliff issue. The president urges to complete the deal before Christmas. And now it seems quite possible as one of the republican congressmen expressed his support for raising taxes for the rich, but on condition that the tax benefits for those who earn less than $250K a year will be preserved. Such news stopped selling of risky assets. In particular EURUSD dropped as low as 1.2880 and by the end of the trading day had grown already to 1.2960. Now the market is trading in a more…

The markets go on the defensive under the “cliff” threat

By GG Analyst in Reviews 0 Comment

EUR/USD

As expected, it wasn’t easy to break through 1.30. The active European session resulted in selling the euro, partly because investors don’t believe that the EU debt crisis will be resolved now and partly because there’s no progress in the fiscal cliff issue. Difficulties on this path aren’t surprising and we spoke about this in our previous reviews. Obama seeks the support of small business to preserve tax benefits for the middle class. However, everyone understands that such benefits put a heavier burden on the rich. Republicans are against this. Probably, in the short term the markets would favour the victory more…

EU lenders promise to write off the Greek debt

By GG Analyst in Reviews 0 Comment

EUR/USD

EU lenders have agreed to ease off on Greece. To reach this agreement the IMF needed three hours-long meetings over the last three weeks (for example, the last meeting took 12 hours).  It’s been decided that €40bln of the debt will be written off to reduce the debt/GDP ratio down to 124% by 2020. The agreement presupposes that write-offs will start in the year, when Greece achieves the budget surplus.  Now it is expected to happen by 2016. But we all know that there is a high risk that this term won’t be observed. Yet, such perspectives hardly upset the market, more…

Still cherish hopes for the politicians?

By GG Analyst in Reviews 0 Comment

EUR/USD

The day which had promised to be quiet turned into a big rally for the stock exchanges and risk-sensitive currencies.  The rally was spurred by Obama’s assurances that the fiscal cliff issue would be settled in the near future. As a result, S&P closed six sessions in a row with significant gains, though on Wednesday and Thursday it looked as if the growth impulse petered out. As expected, the struggle for 1.29 in EURUSD was rather fierce. Eventually, at the height of the EU session the bears gave in, thus allowing the pair to grow further. The euro had almost managed more…