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Another bad hair day

Yet another bad hair day for risk assets yesterday amidst continuing concerns over a myriad of issues, including the unstable political situation in Greece and ongoing question marks around whether it will remain in the eurozone, the dire state of Spanish banking and sovereign finances, and a sense that the losses registered by the CIO unit at JPMorgan could turn out to be much greater than already disclosed. Read more

15/05/2012 @ 07:12 GMT

Finding the inflexion point

Whilst the single currency has certainly suffered so far this month, by all accounts it’s not yet reached an inflexion point whereby it’s fallen out of bed. Yes, it remains true that EUR/USD has fallen in all but two trading days so far this month, but at the same time it’s the high-beta currencies that have taken more of the pain, the Aussie, Kiwi, scandis and Mexican peso all losing ground against the euro. On this basis it looks to be more a global re-rating of risk, of which the euro crisis is playing its part, but this will more likely than not change in the near future.

14/05/12 @ 12:01 GMT by Simon Smith, Chief Economist

More dark clouds over Spain

The week is ending in a similar fashion to which it began, namely with markets broadly in retreat from risk. There’s little reason to feel that today will be much different. The focus is on Spain and its expected announcement of just how bad the government believes the bad loans situation is for the banking sector there. Meanwhile, Greece is still trying to stitch together a government from the results of the weekend’s election. Read more

11/05/2012 @ 07:11 GMT

How long can the euro defy the inevitable?

As we have been observing recently, it is remarkable that the single currency is not a lot lower. Consider – European leaders are now openly canvassing the possibility that Greece might be forced to leave the single currency; tumbling property prices in Spain represent a massive risk not just to the banking system and the sovereign but also threatens to absorb virtually all of the financial resources that Europe has set aside for such eventualities; and the head of China’s sovereign wealth fund has declared that they are not buying any more European bonds. Read more

10/05/2012 @ 11:12 GMT

Why is the euro not much lower?

It is looking decidedly dreadful for the single currency once again.

09/05/12 @ 08:50 GMT by Michael Derks, Chief Strategist

Greece again

It had almost reached the stage where the markets could go several days without thinking about Greece, which is in marked contrast to a couple of months ago. After the weekend’s election, that seems to be changing as the various parties struggle (so far unsuccessfully) to form a government. This task is currently being undertaken by the second biggest party (Syriza), after the New Democracy group failed to get anywhere. The reason for concern is that the negotiations currently taking place are between parties far more keen on renegotiating current bailout deals. Read more

08/05/2012 @ 12:18 GMT

Caution ahead of payrolls

Markets face up to the US jobs data today in tentative mood, Asian stocks having softened by the greatest degree in nearly two weeks overnight and the past two days having seen high-beta currencies, such as the Aussie and Korean won the weakest performers of the majors. The recent trend in jobless claims, together with the ADP data earlier in the week, have tempered expectations of a strong set of numbers, with the market looking for a 160k gain in headline payrolls following the softer 120k increase seen in March. Read more

04/05/2012 @ 07:16 GMT

The shifting ECB

Even though on the face of it, the market was positioned for no change from the European Central Bank meeting today, there were some residual hopes of a surprise cut given the recent run of disappointing real sector data. There were some subtle changes to the opening statement which suggest that the ECB’s stance could well be softening. It still fears that inflation will remain above 2% this year but removed the reference to near-term upside risks to prices’ stability that was present in last month’s opening statement. Read more

03/05/2012 @ 14:20 GMT

A warning for euro bears

Yesterday’s flood of distressing economic data out of Europe reinforced the observation that what the region desperately needs is a weaker currency.

03/05/12 @ 10:28 GMT by Michael Derks, Chief Strategist

Eurozone credit gets crunchy

The latest M3 data releases by the ECB has further confirmed that we are seeing a fairly steady contraction in lending within the household sector, a trend which is only likely to get worse over the coming months. Overall lending to eurozone households fell to 0.6% YoY (from 1.2%), with much of this decline coming on the back of falling lending for house purchase. It’s no surprise to see this, especially with loan delinquencies increasing, particularly in Spain. Read more

30/04/2012 @ 11:05 GMT

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