News and Reviews European Economic Zone

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News and European Economic Review (Italy)

 

Italy worry about market conditions

Tuesday, August 2, 2011

 

Italian bond yields continue to rise as investors worry about the slow recovery that may inhibit efforts to reduce government debt burden. Yield on the 10-year bond jumped 18 bps to 6.18%, the highest since November 1997. "His condition is alarming," said Harvinder Sian, a strategic Royal Bank of Scotland. "Yield continues to rise, if this condition persists Italy can be a victim of the debt crisis of the next euro-zone."

 

Reuters interviewee said the Italian government will meet today to discuss market turmoil that continues to jack the cost of borrowing. Financial Stability Committee, which consists of representatives of economic ministries, the Bank of Italy, the regulator Consob and ISVAP authority-will discuss the threat of being hinggapi third largest economy of Europe. The meeting will be led by Economy Minister Giulio Tremonti and the Ministry of Finance also attended the leadership of Vittorio Grilli.

 

Although Italy has a debt load that reached 120% of GDP deficit, but the controlled and stable financial system has managed to protect Italy from the threat of a crisis. But the market is now doubted the government could reduce the debt burden and do exciting activities for the sake of economic reform. Investors worried Tremonti will lose his position as Minister of Economy while the market saw Tremonti as an anchor of stability in Italy.

[mynameisandhy]

News and European Economic Review (UK)

 

Rebound Efforts GBP / USD Still At Risk

Tuesday, August 2, 2011

 

GBP / USD had dropped to touch the lowest level since July 21 at 1.6224 after U.S. economic data releases on Tuesday, then turned back up above the 1.6250 area. Pound slips for second consecutive day against the dollar amid the outbreak of the action avoid risks in the market.

Although it managed to cut some decline, Cable is still not able to move higher to 1.6290 level continues to provide resistance for the currency pair. Currently, GBP / USD traded in the range of 1.6260 and still recorded a decrease of about 0.2%.

 

From the technical side, "DMA 21-day in the range of 1.6178 might be strong enough to provide support. Now we must continue to monitor whether a currency pair can continue rebounding from 1.6200-6180 support zone, or otherwise it will sink deeper into the area 1.6100, "according to the consultant team Kshitij.

[mynameisandhy]

News and European Economic Review (UK)

 

Resistant Test GBPUSD 1.6400

Wednesday, August 3, 2011

 

Pound sterling currency managed to rebound from the lows of the day is at the level of 1.6248 to the 1.6390 area, along with the weakening U.S. dollar amid the improving UK services sector.

 

GDP figures show UK economy terkerek rise in the second quarter after 6 months of stagnation and have developed based on the results of this week's exploration of the third quarter growth is still rising modestly.

 

NIESR estimates that growth in 2011 rose only 1.3% while the 2012 forecast at 2.0%. This means below the estimates issued by the government at 1.7% growth this year and 2.5% next year.

 

Technically speaking, a neutral bias with a potential range of intraday trading in the range of 1.6260 to 1.6400. Translucent area above 1.6400 could trigger a new bullish momentum further test the next technical level of 1.6450 & 1.6500. As for the bottom side, closest support level is at 1.6320 & 1.6260 area, fell below the 1.6260 area should be able to transform into a bearish intraday bias targeting 1.6050 area.

[mynameisandhy]

News and European Economic Review (Switzerland)

 

SNB will Difficult Opponent Strengthening Franc

Wednesday, August 3, 2011

 

Swiss National Bank cut interest rates and the threat to implement policies that would limit the strengthening of the franc; nonetheless SNB seems to be difficult opponents appreciation of the franc as the high interest of investors on the franc as a safe-haven assets. Franc weakened against the euro and the dollar above the SNB's decision, but analysts predicted only a temporary weakening of the franc.

 

"Recent policy SNB will not stop the appreciation of the franc," said Neil Mellor, a strategic Bank of New York Mellon. "This will be a battle that will be hard won by the SNB, the central bank might only be able to slow the pace of appreciation." The low debt ratio fanc Swiss made an idol of investors amid a worsening debt crisis, euro zone and worries U.S. downgrades.

 

SNB cuts interest rates to a level "close to zero percent" of the previous 0.25% and will increase the supply of francs in the coming days. SNB does not tolerate the monetary tightening caused by the overvalued franc exchange rate that threatens economic growth and increase the risk of price stability. "SNB continued to examine developments and will take further action against the strengthening of the franc, if necessary," said the Swiss central bank.

[mynameisandhy]

News and European Economic Review (UK)

 

Sterling Gains Against Yen In Intraday Trading.

Wednesday, August 3, 2011

 

Recent data releases Services PMI indicator has just been released by the Markit showed a fairly good indication on the UK economy.

 

The impact of data releases to trade GBP / JPY this afternoon (03-08) which was observed occurred strengthening pound sterling and the forex market responds to this by encouraging the pair GBP / JPY so in the range of 126.09.

 

Services PMI indicator of actual data reported previously menapai value of 55.4 which is expected to be able to drop to 53.3 from 53.9.

 

Analyst Research Vibiz of Vibiz Consulting suggests that the pound is still potential to further strengthen the pergerakn intraday.

[mynameisandhy]

News and European Economic Review (UK)

 

Pound Stable On Post-Decision BoE 1.6300

Thursday, August 4, 2011

 

Pound is almost no reaction to the announcement of the BoE interest rate decision, with only moved up about 20 pips after the central bank decided to maintain its monetary policy.

GBP / USD had fallen to a low-level daily at 1.6285 shortly before the announcement of the BoE policy, though then managed to rebound back above the 1.6300 level after the BoE decision. Cable is currently trading at around 1.6330 or approximately 0.55% below the opening price today.

 

"Technically speaking, the prices continue to hold around 1.6330 then it will probably be the closest support can be found at 1.6300 and 1.6250 area which if successful would potentially trigger impregnable continuing bearish rally towards 1.6100 level," said Valeria Bednarik of FXstreet.com. "On the other hand, the next resistance will be found at 1.6385, followed by a high level that is printed in this and the previous week, in between 1.6440/70. Penetration levels are obviously going to give birth bullish momentum for this currency pair to move towards the zone 1.66 price. "

 

BoE Monetary Policy Committee on Thursday has decided to keep its main interest rate at 0.5% level, policies that have persisted in the last 30 months. The Committee also decided to continue the asset purchase program worth? 200 billion.

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News and Overview of the European Economic Zone

 

Trichet is estimated Being Wait & See

Thursday, August 4, 2011

 

ECB President Jean-Claude Trichet is expected still to be wait & see to the direction of interest rates when he gave a press conference on Thursday, and possibly less able to give too much guidance about the direction of interest rates in line with slowing economic growth and the tension getting stuck.

 

According to most economists President Trichet will be defensive at a press conference later, with expectations of ECB interest rate is maintained at the level of 1.5%, after last month rose 0.25%.

 

Since the last increase in interest rates, economic data began to lose momentum at the same time began to fall in the growth of powerful countries like Germany. Moreover, the rescue package created a European leader for the Greek did not affect much to prevent the spread of sovereign debt krsisi to Italy and Spain.

[mynameisandhy]

News and Overview of the European Economic Zone

 

Buy Bonds ECB Planning Only Portugal and Ireland

Thursday, August 4, 2011

 

European Central Bank is currently buying Irish and Portuguese government bonds in the secondary market but has no plans to buy bonds of other countries, according to Reuters resource.

 

ECB President Jean-Claude Trichet, said the central bank bond purchases still run the program and traders see the ECB's incentive to buy government bonds Ireland and Portugal. "Activities undertaken in the secondary market ECB only applies to Irish and Portuguese bonds, rather than other countries," according to European Union officials are reluctant to publish his name, told Reuters.

 

Trichet declined to comment when asked why the central bank did not also buy Italian bonds are exposed to indiscriminate selling in recent days. Continue weakening euro and the Italian government bond yields continued to rise after Trichet's comments.

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News and European Economic Review (Switzerland)

 

Hildebrand Try to Stop Strengthening Franc

Friday, August 5, 2011

 

Swiss franc weakened against the euro and dollar after the President of the Swiss National Bank, Philipp Hildebrand, said the central bank does not exclude action to curb currency appreciation. "Franc weakened as investors worried about the movement of Swiss SNB will intervene," said Neil Jones, head of hedge funds to Mizuho Corporate Bank. "The market is worried by the possibility of plunging into the central bank foreign exchange market."

'

"Central Bank of Switzerland does not exclude any effective policy to curb the strengthening of the franc," said Hildebrand told the Neue Zuercher Zeitung. "We've communicated that we are willing to take further action if needed," Hildebrand said when asked whether the SNB would prefer to increase liquidity rather than selling the Swiss franc.

[mynameisandhy]

News and Overview of the European Economic Zone

 

Bond Purchase Program ECB Less Successful

Friday, August 5, 2011

 

Programs & Ireland Portugal bond purchases by the ECB on Thursday appears to be less successful in stopping the spread of the crisis, according to ECB council member Luc Coene ECB step program is less helpful to see the market response.

 

According Coene, the ECB is still preparing a rare extra help to add liquidity to the market situation today, but before the state who have problems with debt need to do some convincing of fiscal austerity program first and the ECB could take action.

 

At present the response of market participants are still negative due to most of the promise given EU officials have not been implemented in a concrete, according Coene so the move was executed in concrete should be able to halt the spread of the crisis.

 

He also reiterated the European Commission President Jose Manual Barroso that the European zone leaders need to reconsider all aspects of the deal last July 21 in Brussels, including the amount of funds needed rescue.

[mynameisandhy]

News and European Economic Review (UK)

 

UK Producer Price Inflation Terlambung By Record Price Clothing

Friday, August 5, 2011

 

Inflation UK factory output rose in July at the fastest rate for nearly three years because of record increases in the prices of clothing and textiles, official data showed on Friday ((5 / 8).

 

Office for National Statistics (ONS) said output prices, the fees charged at the factory output rose 5.9% in the year to July - the highest level since October 2008 when that level is 6.6%. Producer prices rose 0.2% this month.

 

However, output prices increased at a rate slightly slower than expectations, with economists polled by Dow Jones Newswires had forecast a 6.0% rise in annual and monthly rise at 0.3%.

 

Data on Friday showed the price of clothing, textiles and leather increased by an annual rate at 5.2% - its highest level since records beginning in January 1997.

 

An official record of the ONS said the increase due to the rising cost of sheep's wool, which moves up the cost of knitted garments and hooks.

 

The increase in producer output prices were observed closely as it entered the consumer price inflation if retailers pass price increases on consumers.

 

The annual inflation rate in Britain fell to 4.2% in June from 4.5% in May, but still more than two fold targets the Bank of England (BOE) at 2%.

 

BOE, on Thursday to let interest rates stay at a low of 0.5%, mengeskpetasi inflation to accelerate further this year in the top 5% because of large increases in household bills benefits, before falling back gradually toward those targets.

[mynameisandhy]

News and European Economic Review (UK)

 

Pound Dragged After Failed ECB Reassure Market

Monday, August 8, 2011

 

Pound Sterling weakened on the stock eventually follow the weakening Euro during the European session after ECB's action failed to calm markets because the move was still below expectations of market participants.

 

Monitored by far the currency pair GBP / USD traded at 1.6372 or weakened -0.08%, whereas in early trading in positive territory could survive post-steps the ECB to buy Spanish & Italian bonds worth? 1 billion.

 

Euphoria of the market participants seem to fade quickly, where the Italian and Spanish stock market that had skyrocketed in the beginning but turned toward trading lower while the euro slumped further against the dollar and Swiss franc.

 

Other factors that cause weakening of the GBP / USD is the report of the German refusal to raise the capacity of EFSF, according to a spokesman for German Chancellor Angela Merkel, it will not change the volume EFSF and maintaining the EU summit decision on 21 July.

 

Based on the study of technical, intraday bias remains neutral in the short term with an estimated range trading in the area 1.6473 - 1.6192, but we get bearish convergence on the Daily chart indicating potential bearish at least target the 1.6340 area, fell under the area can transform into a bearish intraday bias test the 1.6192 area .

 

On the upside, the nearest resistance is located at 1.6473 area, through the above areas should trigger further bullish momentum targeted 1.6545 key resistance area.

[mynameisandhy]

News and European Economic Review (UK)

 

UK Shares Soar As a result of RBS, Lloyds, Barclays Gain Profit On the FTSE 100 Index

Monday, August 8, 2011

 

UK stocks rallied, rebounding from its biggest weekly decline in the FTSE 100 Index in nearly three years, after the European Central Bank said it would buy the bonds Spain and Italy.

 

Royal Bank of Scotland (RBS) and Lloyds Banking Group rallied more than 4%, led gains among banks on the FTSE 100 Index.

 

FTSE 100 up 18.02, or 0.3% to 5,265.01 at 8:32 pm in London, the first gain in seven days. FTSE All-Share Index rose 0.3% to 2,734.77, while Ireland's ISEQ Index rose 1.3% to 2,537.69.

 

FTSE 100 last week posted the biggest weekly loss in almost three years, even after a report showed the U.S. added more jobs than expected last month. Index slumped 9.8%.

[mynameisandhy]

News and Overview of the European Economic Zone

 

The euro sank below 1.4200

Monday, August 8, 2011

 

Euro recovery efforts triggered by the purchase of bonds ECB seems to have been constrained by the 1.4400 area, and then turned sharply lower as waning optimism about the ECB's action. So far EUR / USD has lost over 200 pips, up to hit a new daily low at 1.4150 to enter U.S. trading session on Monday.

In line with these movements, the nearest support level may be found at 1.4150 (daily low, followed by 1.4050 (low-August 4) and 1.4010 (low July 18). Conversely, the level of resistance at 1.4290/00 area (previous low), then 1.4400 (daily high) and 1.4455 (high-August 1).

 

From a technical standpoint, the bias remains bearish euro moved lower with the indicator below the midlines, according to Valeria Bednarik, analyst technical FXstreet.com.

[mynameisandhy]

News and European Economic Review (Switzerland)

 

Investors more incentive to hunt Franc

Tuesday, August 9, 2011

 

Swiss franc again sharpen its strongest record for day-to-3 in a row against the euro and dollar as rising concerns over global economic outlook and the fall in stock markets prompted investors to switch into safe-haven assets.

Action avoid the risk of further spread in the market in recent days after the downgrade the credit rating of the U.S. by Standard & Poor's on Friday last week and the debt crisis prolonged in the Euro zone sparked investor concerns about the global slowdown, as happened after the collapse of Lehman Brothers in 2008 ago .

 

While some analysts expect the franc, which has been recorded so far this year rose 15.3%, could reach the level of parity against the euro, although the Swiss National Bank's action in lowering interest rates and warned of strengthening franc, has raised concerns about possible intervention.

 

"Central banks around the world continued to race for various forms of intervention to control the exchange rate, which seemed only a temporary effect since such action did not include a clear solution to address a more fundamental," said Andrew Wilkinson, senior market analyst at Interactive Brokers Group in Greenwich, Connecticut.

 

SNB itself looks are still reluctant to intervene in the currency market after its efforts to weaken the franc earlier, when the crisis occurred in 2008, it created a huge loss for the central bank.

[mynameisandhy]

News and Overview of the European Economic Zone

 

Euro Still Need Germany Support, Not Only ECB

Tuesday, August 9, 2011

 

Response currency that is quite disappointing after the last ECB move shows that the Euro still need backup from Germany, not too surprising if the euro fell again even though the program has reduced the cost of purchasing bond financing for Italy and Spain and at least reduce the risk of default for a while.

 

This means that politics is still a problem for the single currency Euro, German Chancellor Angela Merkel reiterated that it still refused to increase the size of EFSF capacity in dealing with state debts. Yet market participants are still concerned funds amounting to 440 billion euros at EFSF will not be enough to help countries such as Italy and Spain.

 

Technically speaking, the direction of bias is still neutral in the short term where the price of symmetrical triangle formation on H4 chart indicates the phase of consolidation and consistent penetration is still needed from the triangle area to get a more clear trend.

 

Nearest resistance seems he rea 1.4250, translucent over the area should trigger further bullish pressure test area 1.4300 - 1.4350.

 

On the bottom, turning movements only under 1.4150 area could open up new opportunities to test line lowest price reductions from the triangle in the key 1.4055 support area, fell under the area could trigger further bearish scenario in the short term.

[mynameisandhy]

News and European Economic Review (UK)

 

Ahead of the FOMC, Sterling Still in Trading Range

Tuesday, August 9, 2011

 

The U.S. dollar lost its way in New York trading today and weakened slightly anticipating the prospect of easing monetary expansion at the FOMC meeting tonight. Although the central bank still expected to hold interest rates at 0.25% level however, there are chances of further expansion of balance sheets in order to overcome the slowdown of recovery.

 

Bernanke's comments signaled if the next round of cuts should trigger a quantitative strengthening of the currency pair GBP / USD, but otherwise if there is no indication so the dollar GBP / USD may actually depressed amid expectations of monetary policy normalization.

 

However the BoE quarterly inflation report tomorrow is still a risk of fall in sterling due to prospects of reduced inflation below 2% target. At the same time the threat of a double dip recession also be another factor weighing on the BoE to conduct monetary expansion.

 

Overall, the above factors make intraday bias GBP / USD to be bearish in the short term at least test the 1.6200 area, but technically the price is still in a phase of consolidation with a potential trading range in the area 1.6475 - 1.6200, and the required penetration in one direction to get a more clear trend .

[mynameisandhy]

News and European Economic Review (UK)

 

Bank of England Spruce Growth and Inflation Targets

Wednesday, August 10, 2011

 

Bank of England cut its forecast for growth and inflation on Wednesday, said the pace of growth has slowed and "vulnerability, especially in the euro area" has increased.

 

The projection of central banks in the latest inflation report showed inflation dipped below 2% in late 2012 and held slightly below the target level of 2% in 2013.

 

In the short term, inflation could reach as high as 5%, Governor Mervyn King said at a press conference. Central projection for 2011 growth of about 2%, nearing 2.5% in the inflation report in May. Pound slightly against the dollar extended losses following the report, losing 0.4% to $ 1.6242.

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News and European Economic Review (Germany)

 

German Bonds Rise, Pushing Yield 2 Year Note Lowest

Wednesday, 10 August 2011

 

German bonds rose, pushing the yield on two-year to a record low since September, on speculation slowing global growth will force the European Central Bank (ECB) to delay the rate hike.

 

French industrial production fell more than economists expected in June and the index of the Ifo research institute of the euro area economy fell for the first time in 2 1 / 2 years. Italian records fall as a result of State to sell? 6.5 billion ($ 9.4 billion) bill, the first auction since the ECB started to buy bonds.

 

Two-year yield fell 10 basis points to 0.67% at 1:16 pm in London, at least since 9 September. 1.75% security maturing in June 2013 rose 0.18 to 101.95. 10-year yield fell 10 basis points to 2.27%.

[mynameisandhy]

News and European Economic Review (UK)

 

Continue weakening Sterling, BoE Give Signals Growth Risk

Wednesday, August 10, 2011

 

Sterling slid to a two-week lows versus the euro and depressed against the dollar, and speculation that the Bank of England will cut its forecast for economic growth in the quarterly inflation report on Wednesday.

 

BoE Quarterly Inflation Report published in August at 0930 GMT, which will be followed by a press conference by Governor Mervyn King. BOE will announce the weak outlook for this year and next.

 

Pound had been hit by this week's selloff linked series of weak UK economic data, including data on Tuesday showed an unexpected decline in UK manufacturing output, has led to speculation that growth for the second quarter may be revised downward.

 

This will still create confidence among investors that UK interest rates will remain below the record low of 0.5 percent until well into 2012.

 

Some analysts argue the value of sterling to reflect this possibility, adding that any negative side, an additional effort to sterling may be limited.

 

Sterling slipped 0.3 percent to a session low as $ 1.6241 in early trading in London. On Tuesday, falling as low $ 1.6176, its weakest since July 21.

[mynameisandhy]

News and European Economic Review (Italy)

 

Italy Trying to Reassure Investors

Thursday, August 11, 2011

 

Finance Minister, Giulio Tremonti, Italy will point out the reform of labor laws, sells local service businesses, and raise capital-gains tax to balance the budget and secure the support of the ECB. "Italy must overcome stiffness of the economic system," said Tremonti told Parliament.

 

Berlusconi's government began to consider various ways to balance the budget in 2013 as part of an effort to reassure investors that Italy can avoid the debt crisis and keep the support of the European Central Bank. The ECB began to buy government bonds Italy on 8 August after the Italian government pledged to trim the deficit; successfully reduce the yield on the 10-year-italia of 104 bps in the last four days.

 

ECB President Jean-Claude Trichet, has sent a letter to Berlusconi's government last week to ask the Italian public sector employee wage cuts, liberalization of labor laws, and speeding up plans to balance the budget, and sell government-owned service companies, according to Tremonti. Tremonti reluctant to lay out the contents of the letter further but this letter speeding Berlusconi managed to push the budget adjustment policy.

 

Meanwhile, the euro bounce back in the New York session, was trading near the high levels of daily 1.4250 1.4293

[mynameisandhy]

News and European Economic Review (French)

 

SocGen CEO: France Not U.S.

Thursday, August 11, 2011

 

Societe Generale CEO denies rumors that France's second-largest bank is being experienced difficulties and blame the USA downgraded credit ratings on speculation the French might lose AAA status. "Surprisingly enough, just because one country experienced a ratings downgrade then there must be other countries that will experience the same thing," said Frederic Oudea told CNBC. "It's weird thinking about the economic situation."

 

Oudea uttered rating agencies have confirmed credit ratings of France, and as long as France continues to maintain a balance of economic and government policy of trimming the deficit run then there is no reason to change the rankings.

 

Oudea also reiterate Societe Generale have only a limited risk to the Spanish and Italian banks have enough capital and the corresponding requirements of Basel III. Oudea reluctant to comment on the rumor that SocGen's largest shareholder, Groupama, need fundraising so that could ultimately affect the solvency of banks.

 

Meanwhile, the euro bounce back in session New York, traded away from low-level daily 1.4236 1.4102

[mynameisandhy]

News and European Economic Review (UK)

 

Sterling 200 Day Moving Average Approach

Thursday, August 11, 2011

 

Sterling is still trading far below the moving average 50 days to the U.S. dollar on Thursday, struggled after the BoE cut its UK growth forecast with an increasing risk of British fiscal pruning program.

 

UK economy still risks attached to the debt crisis of the European zone while simultaneously increasing the rate of global growth slows. If the UK economy is still under-performance, automatic deficit reduction targets for government to be threatened sustainability. The dilemma that is the main factor Pound fundamentally depressed.

 

Finance Minister George Osborne will also give testimony in front of the parliament London unrest related concerns that could potentially damage the confidence of investors in the economy in London as one of the world's largest financial centers.

 

Based on the study of technical, intraday bias remains bearish despite price rebounds from 3-week lows but the 1.6200 resistance level can be a good area to short sell with a tight stop loss & target the 1.6080 target, MA200. On the upside, above MA50 translucent so far traded in the 1.6220 area can bring the price into the neutral zone and wait & see mode switch to get a more clear trend.

[mynameisandhy]

News and European Economic Review (UK)

 

UK Construction Output Boost 2Q GDP

Friday, August 12, 2011

 

UK construction output grew faster than previously expected in the second quarter, boosting economic growth rate in that period, the Office for National Statistics (ONS) said on Friday (12 / 8).

 

Britain's official statistics institute said the construction output rose 2.3% between April and June compared with the first three months of this year.

 

That was the fastest of the 0.5% growth in construction sector accounted for the ONS's first estimates of GDP, released in July.

 

Revised, by itself will boost the quarterly economic growth rate of 0.1 percentage points to 0.3% of the initial notes ONS at 0.2%.

 

The agency also revised up its construction rate during the first quarter of 2011, falling 2.8% from 3.4% decline the previous report.

[mynameisandhy]

News and Overview of the European Economic Zone

 

Short-Selling Prohibition Boost European Stock

Friday, August 12, 2011

 

European stocks rose, keep the momentum of recovery after France, Italy, Spain, and Belgium to pass off short-selling ban for financial stocks. UK stock exchange (FTSE) rose 1.2% while the German stock exchange (DAX) and France (CAC) each rose 1.7% and 1.1%.

 

"Something must be done to stop the fall of the stock, the market is now quite emotional and fear. The ban short-selling can make the index a break," said London fund manager interviewed by Reuters. "I do not think the impact can be long term but it could give relief for a while ... as seen, shot-sellers are now beginning to move into the CDS market."

 

Analysts also saw the rise of the action on bargain-hunting as investors began buying stocks that perform well have fallen sharply recently. "Bargain hunters have sprung up, logically enough, especially with low valuations now. Financial statements of the company remains positive," said Henk Potts, Barclays Wealth's strategic.