ISDA report helps the banking sector, but renders no support to risk demand

By GG Analyst in Reviews 0 Comment

EUR/USD

Yesterday’s market events can be well packed into two stories. The first one concerns the ISDA’s (International Swaps and Derivatives Association) conclusion that the swap for private Greek debt holders is not a credit event and therefore will not trigger CDS. This news has supported equity markets, especially the banking sector, which feels somewhat mystically feared at the word “default”. The other story is about rather unimpressive data on the economy. That’s all in relation to expectations, of course. If earlier the U.S. unemployment claims totaling 351 thousand gave rise to the most optimistic sentiments in the markets, now these figures 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…

Markets see the positive everywhere

By GG Analyst in Reviews 0 Comment

EUR/USD

The US dollar continues the retreat started on Tuesday. The currency is declining while the markets generally remain optimistic, thus generating demand for risky assets. Yesterday’s data on investor sentiment supported the markets.  Conference Board’s Index of Consumer Confidence has exceeded everyone’s expectations, having risen to 70.8 in February, the highest level in a year. The data on Durable Goods Orders and the S&P/Case-Shiller Home Price Index proved to be a bit disappointing. However, the orders largely increased over the previous months (4.2% in November, 3.2% in December), so together with the 4.2% decline in January the figures have restored to more…

Greece’s rating is cut to selective default, but who cares?

By GG Analyst in Reviews 0 Comment

EUR/USD

S&P has downgraded Greece’s credit rating to selective default (SD). This decision hasn’t come as a surprise, as the agency already promised to do it a couple of months ago. For this reason, there haven’t been any sharp euro sales. The agency has also pointed out that if there aren’t enough private investors engaged in debt swap, the country will inevitably face outright default. However, as the technical analysis shows, the euro sales were just held during the day yesterday, not longer. EUR/USD fell to 1.3366 during Monday’s session, but already now trading is again conducted around 1.3440. Demand in stock more…

Euro area rose to two-month highs on triggering of stop orders

By GG Analyst in Reviews 0 Comment

EUR/USD

The single currency has moved up on triggering stop orders and reached 1.3360. This level is the highest since mid-December. The rising optimism in stock markets and subsiding fears around Greece lead to partial liquidation of short positions in the euro. As has already been mentioned, the market is heavily tilted against the euro, yet its exchange rate has remained relatively stable so far. Thus, the upward movement of EUR/ USD has good chances to go on. This rally is supported by strengthening of stock markets on good reports and rise in prices of raw materials. Until recently the inverse correlation more…