Rising stakes for the summit: S&P is threatening to cut the ratings of almost all EU countries

By GG Analyst in Reviews 0 Comment

EUR/USD

S&P is threatening to lower the ratings of almost all EU countries and many banks of the region in case ratings of the Euro-Zone countries go down. Stakes on this summit are very high. But now there are some doubts about its successful outcome. Newspapers with reference to some governmental sources say that Germany will oppose an early launching of the additional bailout funds that we spoke about yesterday. Germany assigns primary importance to the fiscal discipline and agrees to come to the rescue only if it is observed. Again and again German politicians make the same mistake: trying to gain more…

S&P: handle it or everyone will be in trouble

By GG Analyst in Reviews 0 Comment

EUR/USD

Germany and France took the initiative to make certain alterations to the EU Treaty and introduce automatic penalties for violation of budgetary discipline. The positive effect of this will consist in the earlier supply of the states in need of bailout with money. In his speech Sarkozy tried to convince the public that France and Germany would pay out their debts in full. We heard the same from Greece less than two years ago, but now even the Bank of England estimates the probability of debt restructuring in Greece at 100%. S&P, the most daring rating agency, announced that if there more…

Payrolls turned out to be weaker than expected, but Europe supports the markets

By GG Analyst in Reviews 0 Comment

EUR/USD

As it often happens in our days, Friday’s U.S. labor report contained rather contradictory data. On the one hand, the number of household employees continues to grow under unprecedented rate, having increased by over 278 000. The total number of payrolls almost met the analyst forecasts, reaching 120K against the expected 126K. In addition, data for the previous two months were revised: they went up by over 70K. But there’s no point to be overexcited about falling of the unemployment rate from 9.0% to 8.6% since only one-third of it is due to the employment growth, and two-thirds is caused by more…

Have the central bankers finally saved the world?

By GG Analyst in Reviews 0 Comment

EUR/USD

It’s not a sure thing but the chiefs of the Central Banks and the heads of the governments seem to have come to understanding of each other at last. The former are ready to take more drastic measures, while the latter are looking to more balanced budgets. Of course, they will do one in exchange for another. That vicious spiral (economic downturn – rising budget deficits – tightened credit terms – economic downturn) is very likely to break. On Wednesday we witnessed coordinated actions of the Central Banks. And on Thursday we heatedly discussed Mario Monti’s revelation of the ECB’s intention more…

Kind Uncle Ben pushes up the markets. Bet against the dollar.

By GG Analyst in Reviews 0 Comment

EUR/USD

The unexpected decision of major central banks to ease the interbank lending by means of Libor-OIS swap rate reduction by 50 basis points caused an impressive rally. By the end of trading on Wednesday, shares of financial companies went up by about 6%, S&P 500 grew by over 4%. An hour after the announcement the dollar index fell by 1.3%. This is a serious movement as it poses a significant risk to the technical picture of the dollar growth in November. EURUSD pair which showed the intraday low at 1.3260 after the decision immediately soared up to 1.3530. Lately, the market more…