The Year Is New, but Trends Are Old – the EUR Keeps Going Down

By GG Analyst in Reviews 0 Comment

EUR/USD

So far the single currency has been keeping that very trend which emerged back in November. The corridor of a bit wider than 400 points is still in power despite several attempts of the pair to break it up. The bulls’ attacks were repulsed on December 28 and on January 4. Assuming that the corridor will be still here in January, the pair is likely to be trading between 1.19-1.23 by the end of the month. It would be a natural outcome considering the business slowdown in Europe which is marked by several indicators. Let’s consider one of them – PMI: more…

Markets are Getting Ready to Difficult 2012

By GG Analyst in Reviews 0 Comment

EUR/USD

Yesterday the single currency continued its decline on the increasing bids that the ECB would keep tempering their monetary policy. So, market participants have focused on the amount of the ECB’s reserves. The latter have already made 2.73 trln euros. But the right way to compare the ECB’s reserves with those of other CBs is to consider them in relation to GDP. And at this point they make impressive 29% against approximately 20% of the Federal Reserve and the Bank of England. It’s worth mentioning that the ECB’s balance has doubled over the past six months and is very likely to more…

ECB’s Support of Debt Markets Triggers the Euro Selloff

By GG Analyst in Reviews 0 Comment

EUR/USD

The single currency got a back-blow in yesterday’s U.S. session. Its movement from 1.3070 to 1.29 just in a couple of hours was mainly connected with the fact that the yield of the two-year German securities fell below the U.S. yields of the kind. Yesterday the German two-year bond yield made 0.17% against 0.24% a week earlier. The American bond yields haven’t decreased much over the week, going down from 0.28% to 0.27%. In general, this means that the market is expecting further rate cuts by the ECB. Theoretically, it is reasonable, but the situation has formed not in one day 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…

The Santa Claus Rally Has Reached a Crucial Point: either Up or Down

By GG Analyst in Reviews 0 Comment

EUR/USD

American stocks made a considerable breakout on Friday. The U.S. broad market index S&P 500 closed the pre-Christmas trading session above the 200-day moving average, but, what is more important, went positive at year-end. This surplus is minimum – just 0.6%, but it is still attracting a great deal of attention. Generally speaking, breaking of the 200-day moving average is a strong bullish signal for the stock exchanges. But now skeptics stronger than ever claim that it’s nothing more than the Santa Claus rally and wants confirmation. These talks have already caused a slump of the Asian exchanges. On Tuesday morning more…