Fewer and Fewer doubts: QE will kick off in September

By GG Analyst in Reviews 0 Comment

EUR/USD

How capricious the markets are! On Friday Bernanke expressed his grave concern about the current state of affairs in the labour market. In fact, formally this sphere is hardly the most troubled one in the USA. So it is just a political trick, a kind of attempt to inject another portion of adrenalin in the economy before the elections. It is meant to assure electors that the present government has done enough to stimulate the economy and is now busy with other, more understandable for the electorate, issues instead of rescuing the banks or housing market, which makes less than 10% more…

Autumn seems to sneak in a bit earlier

By GG Analyst in Reviews 0 Comment

EUR/USD

In one of our reviews last week we said that the markets could grow till the beginning of autumn. Yet now there is a feeling that autumn is right on the threshold. The optimism of stock market players, which has been growing after the recent release of FOMC’s minutes, reached its zenith yesterday. It’s surprising that the markets supposed to deal with a chain of favourable economic reports and didn’t take into account that the Fed could revise its plans for easing the policy in September. Beige Book published yesterday once again proved that things are getting better in the USA. more…

Good that Draghi won’t attend Jackson Hole symposium

By GG Analyst in Reviews 0 Comment

EUR/USD

It’s amazing that the news about the absence of Draghi and other members of the governing board at the symposium in Jackson Hole should give so much help to the single currency. Anyway, there is a core of sense. Draghi is said to be busy drawing up a plan of Europe’s bailout. But being honest, most of the time is of course spent on searching for the compromise and arguments in favour of further expanding of the ECB’s balance sheet. It is very likely that Draghi and his followers are trying to persuade that it’s not the best variant to reply more…

ECB’s bazooka should be more powerful than Fed’s one

By GG Analyst in Reviews 0 Comment

EUR/USD

Though neither the Fed nor the ECB have decided on whether to expand their balance sheets or not, the markets already see it as a settled thing for both the CBs. Yet, Europe needs asset purchases much more than the USA. Provided the ECB and the Fed followed the same rules to help their economies (or are ruled by same people), we would see a much bigger decline in the euro. For comparison, the EU economy has shrunk by 0.4% against the level of the previous year, while the US economy demonstrates a 2.2% growth. The unemployment rate in the euro more…

Rise till fall comes

By GG Analyst in Reviews 0 Comment

EUR/USD

The minutes of FOMC’s meeting on July 31 – August 1 had more specifics about them than usual. As has been noted, the Fed is prepared to launch the programme of economic incentives if the figures remain that poor. Such news certainly filled the markets, especially currency ones, with enthusiasm. The risk-sensitive EUR/USD grew from 1.2470 to 1.2530 within just 3 hours. It’s worth mentioning that already before the release, during the day, the euro had been in good demand, cementing its positions above the previous highs. At the moment the single currency is trading close to the seven-week highs, near more…