Daily Archives: February 28, 2012
FX Ringside
Germany and Merkel in the limelight This weekend’s G20 statement was very clear. The provision of further IMF funding by member states will depend on the ability of the Eurozone countries and particularly Germany as largest contributor, to increase the size of the currency zone rescue fund.
UBS Morning Adviser America
Greece News Discounted Following S&P’s decision to lower Greek debt to ‘Selective Default’ rating last night, the ECB announced that it has temporarily suspended the Greek debt for use of collateral. This has been fairly well flagged and is a temporary part of the process – the ECB has previously agreed to continue to except […]
Behavioral Finance: Daily Forex Outlook : LTRO2 could also augur well for the euro
EUR USD (1.3445) On the eve of LTRO2, the ECB’s president has reasons to feel some satisfaction. Data published by the Bank on Monday confirms that Italian and Spanish banks increased their respective domestic sovereign bond portfolios by impressive amounts.
Bond Analysis
German government bonds are opening moderately lower Tuesday as focus turns to the ECB’s second 3-year LTRO tomorrow. Estimates for the 3-year LTRO remain mixed. Some banks have raised estimates, given ECB’s extension of eligible collateral in non-marketable asset category, but some banks also have lowered their estimates as the haircuts on the additional collateral […]
Technical Analysis
EURUSD looks set to score one more high before dropping again… Bunds bullishly broke above key refs yesterday and look staged to score fresh cycle highs… US tens trails behind but also look bullish…
GBP/USD Analysis
Closed in NY at $1.5820, off pullback lows of $1.5810 after rate had posted extended highs during Monday’s Asian session of $1.5904. Rate posted an early Asian low of $1.5815 before edging higher through the session to $1.5848, as rate tracked EUR/USD recovery, though move was slightly tempered as EUR/GBP edged up from stg0.8464 to […]
UBS Morning Adviser Europe
ISDA Deliberates On Greece S&P cut Greece’s sovereign rating to ‘selective default’ during the US session, but the FX reaction was minimal for several reasons. First, the move had been signalled months ago and the timing overnight came as no surprise.
Gold Analysis
Spot gold is pushing higher in Asia this morning having eased back on Monday. Crude oil prices and the EUR/USD were pegged back from recent highs following S&P’s downgrade of EFSF’s outlook to negative, and talk that Merkel would have to rely on opposition support to gain Germany’s approval of the bail out.
Currency Weekly: FX and oil: Drilling down to what actually happens
Rather than look at how economics suggests FX “should” behave when oil prices rise, we examine how FX “has” behaved in the past. Oil producers are the winners. However, one might have expected all “risk on” currencies to suffer and safe haven FX to thrive with lower equities.
Crude Oil Analysis
April Nymex WTI crude prices are holding steady in Asia this morning around $108.40 after losing over $2 yesterday as the euro succumbed to pressure from EUR/JPY sales and the Nymex markets saw some profit taking after a failure to breach the $110 level.
AUD/USD Analysis
Opened in Asia at $1.0754 having put in a strong recovery in NY from lows of $1.0650 seen in Europe. The recovery move was largely seen on some heavy selling in EUR/AUD after posting earlier highs of A$1.2619 in Asia yesterday.
USD/JPY Analysis
Opened in Asia at Y80.61 having been skittled lower yesterday following a clear out of EUR/JPY longs and month end flows. The cross fell in Tokyo after failing to take out a Y110.00 barrier (high Y109.96) and ran down through Europe to lows of Y107.19 in early NY trading.