Trying to ride the tide

By GG Analyst in Reviews 0 Comment

EUR/USD

Yesterday the single currency dropped below 1.25 for the first time in two weeks. Formally, the worsening of market sentiments was caused by the audacity of the Greek coalition. Many expected that the “pro-european” winning parties would support the austerity policy, imposed by the EU, but instead the Greeks decided to ride the wave. This wave was heaved by France’s new President Hollande and soon was supported by the Prime Ministers of Italy and Spain. We are talking about concentration on the growth instead of the austerity. Yesterday the Greek parliament eagerly discussed the postponement of the budget consolidation for 2 more…

USD again gains strength on bad news from the USA

By GG Analyst in Reviews 0 Comment

EUR/USD

The negative sentiments in regard to the USA can cause both decrease and increase in the dollar. It depends just on how much bad news is released. If there isn’t much negative, the CB and the government are expected to handle this by making monetary or fiscal policy less tough. However, if the market believes that the slowdown will spread to other economies and require more money infusions (meaning that it will lead to the increase in the deficit budget), the negative news from the USA can be of benefit to the dollar. The market simply considers that in other countries more…

Back to 2009?

By GG Analyst in Reviews 0 Comment

EUR/USD

The miracle that was awaited by many hasn’t happen. The utterly poor EU Prelim PMI figures that came in yesterday morning deeply upset the market participants. Yet unfortunately it was not the only bad news of the day.  According to the Markit PMI data for Germany, the affairs of the local manufacturers are now at their worst since summer 2009. The preliminary PMI figure for June dropped down to just 44.7. France and Euro-Zone in general feel a bit better then forecasted. But we believe that they won’t be able to show better dynamics than Germany for any significant space of more…

Small Twist

By GG Analyst in Reviews 0 Comment

EUR/USD

The Fed managed to surpass the market expectations. Yesterday the FOMC announced that it would purchase the Treasury securities with remaining maturities of 6 years to 30 years and sell or redeem an equal par value of Treasury securities with remaining maturities of approximately 3 years or less. There is about $267bln of such bonds on the Fed’s balance. The first round of the programme consists in the redemption of 400bln and was to be finished by July. Yesterday’s decision is accounted for by a rather weak economic dynamics over the last few months: job growth has slowed down, spending has more…

QE, Twist or nothing?

By GG Analyst in Reviews 0 Comment

EUR/USD

Those, who ventured to stake on risk yesterday morning, must have been generously rewarded in the evening. Though at the end of Monday’s trading the single currency sank to 1.2550, already yesterday evening it found enough strength to test the 1.27 level. Today’s quotes remain close to this mark. The Fed’s meeting is ahead. In the last few days it has been widely rumoured that the FOMC will react to the weak market data with another round of Operation Twist. The major advantage of such steps over the additional purchases consists in the absence of any inflationary aftereffects. The fact that more…