Monthly Archives: February 2012
Another Greek Week, but China hits headlines by easing policy
The surprise over the weekend came not from Greece, for a change, but from China, which announced a 50bp reduction in the Reserve Ratio Requirement for banks. This is expected to add some Yuan 360-400 bln of additional liquidity into the local banking system.
USD/JPY Analysis
Opened with a small gap higher in Asia at Y79.60 having closed last week around Y79.55 in NY. Risk appetite returned with the market now eyeing the Brussels meeting later today which is expected to agree the 2nd Greek bailout package.
UBS Morning Adviser Asia
China Cuts RRR China cut the reserve ratio requirement by 50 bp in a surprise move over the weekend. Previous policy manoeuvres of this kind have generally boosted global risk appetite and we would expect a repeat performance as Asia opens on Monday, especially given the element of surprise.
US FX Market Summary
The EUR strengthened Friday on hopes that the complex negotiations over a new debt relief package for Greece were coming together ahead of a Monday meeting of euro-zone finance ministers. The common currency has rallied 4.2% against the dollar since touching its lowest level in more than 16 months in January.
Bond Analysis
German government bonds trading lower Friday amid optimism that the second Greek bailout package will be approved on Monday. Mar Bunds opened lower as risk-appetite improved with stocks higher after MNI flash China survey.
UBS Morning Adviser America
Risk Stable In Europe Following the flurry of headlines regarding the ECB’s role in the Greek debt swap yesterday, risk appetite was firm overnight, with expectations building for further progress over the weekend. The Financial Times reported that a decision on both the PSI deal and the new Greek bailout is said to be being […]
Behavioral Finance: Daily Forex Outlook: ‘Green shoots’ go unsung this time
EUR USD (1.3125) With early (at the time, unconfirmed) reports that Greek policymakers had been able to plug a €325 million budget hole, and that the ECB intended to swap its ‘old’ Greek bonds for new PSIexempt paper, the stage was set yesterday for a bailout deal on Monday and for a swift completion of […]
JPY Analysis
Opened in early Europe at Y79.14 and Y103.81. Opened in Asia at Y78.93 and has again consolidated previous day’s gains as it pulls well clear of the 200 day MA at Y78.04 broken on Tuesday.
EUR/USD Analysis
Opened in early Europe at $1.3118 Opened at $1.3130 in Asia having bounced strongly from NY lows of $1.2974 on talk that the ECB would swap its Greek bonds holdings for newly issued ones, prompted the start of renewed speculation that the Greek bailout deal would be signed on Monday.
GBP/USD Analysis
Opened in early Europe at $1.5795 and stg0.8304. Opened in Asia at $1.5800 after a strong pull up from lows of $1.5655 as NY opened. The pair launched a strong recovery as risk appetite built with cable lifting throughout the N. American session peaking at $1.5817, later easing to $1.5800 into the close.
Technical Analysis
EUR/USD – spiked in the support zone…EUR/JPY – up-thrust signal failed…USD/JPY – trying it above the 233d ma…EUR/SEK – cautiously watching 8.8520…USD/SEK – rejected from the 55d ma…EUR/NOK – knocking on the trap door.
Bond Analysis
German government bonds are opening lower Friday amid optimism that the second Greek bailout package will be approved on Monday. Risk-on sentiment returned late Thursday session on press speculation that the finishing touches are being made to Greece’s second bailout package and approval from eurozone finance ministers is likely at meeting on Monday.