Unlimited, but yet ineffective QE in Japan

By GG Analyst in Reviews 0 Comment

EUR/USD

On the news that the US markets would be closed on Tuesday, the US stock futures went down.  One day is something that you can put up with, however closing of the exchanges for two days in a row because of the natural disaster hasn’t been seen for more than 100 years.  In theory, if the American dollar is the funding currency for other assets, the demand for capital from the States should cause strengthening of the dollar, as the companies will be repatriating their funds and the government – increasing  borrowings to restore the infrastructure. However, it is a long-term more…

Sandy scared everyone away from the markets

By GG Analyst in Reviews 0 Comment

EUR/USD

Americans are fleeing from Hurricane Sandy, which may prove to be the biggest on record and even reach New-York and Washington. Yet its scale is expected to be much less than that of infamous Katrina.  Anyway, it’s been decided to cancel trades at NYSE on Monday and probably the same order will extend to Tuesday. As a result, trading activity will be very low today, especially in the afternoon. On Friday there was a release of the US GDP data, which showed that the country’s economy managed to demonstrate a better performance than expected. The annualized growth rate made 2.0% q/q. more…

Demand for risk is recovering

By GG Analyst in Reviews 0 Comment

EUR/USD

The euro had a hard time yesterday. For an hour it was attacked by a hailstorm of poor news from Europe. The German and Euro-Zone Manufacturing PMIs came out not only worse than expected, but even worse than the previously reported levels, thus reflecting a higher pace of business slowdown in comparison with the last month. So it’s hard not to start selling the euro, especially taking into account that before that many expected a confident recovery. Moreover, one of the most respected business climate indicators by Ifo dropped down to the level of 100, which is the lowest mark since more…

Santa is Draghi

By GG Analyst in Reviews 0 Comment

EUR/USD

Wanted important news?  Here it is. Yesterday Mario Draghi sparked off the rally on stock markets by the announcement about issuing three-year loans on bonds of troubled countries to banks. Now large hedge funds are placing their stakes on the new kind of carry trade: borrow money at a 1% interest from the ECB and purchase “risky” bonds. As a result the euro has started to grow from 1.30 and is now trading above 1.31. It looks like a significant shift after several sessions of listless trading. On this news yield on three-month Spanish bills has collapsed from 5.11% to 1.74%. more…

The Reports on Kim Jong-il’s death Push Up the Dollar

By GG Analyst in Reviews 0 Comment

EUR/USD

The single currency managed to save its face by closing the previous week above 1.30.  For all that there was no sign of any significant progress in handling the crisis in Europe.  What we see at the moment looks like a technical rebound rather than a movement on expectations of recovery. Thursday and Friday were marked by little growth on the pair, which must have allowed bears to get ready for mounting an attack this pre-Christmas week.  U.S. price data have confirmed the tendencies of recent months. The headline CPI is slowing down on oil and energy disinflation, demonstrating a 3.4% more…