Forex

February 05 2013 10:13 AM

Monday, global financial markets got beat down on what was effectively a repricing of sovereign and political risk in Europe. Bond yields rose, bank stocks fell, and broadly, risk assets traded weakly. Europe just looked pretty ugly Monday. Beginning in Italy, 10-year government bond yields crept to two-month highs Monday on fears that former Prime Minister Silvio Berlusconi may be gaining in the polls ahead of the upcoming elections.

February 05 2013 9:43 AM

Ben Bernanke was instrumental in creating a bubble in U.S. Treasuries. His actions have served to inflate it to the point that it has now become the greatest bubble in the history of global investment. Not only has the Chairman of the Federal Reserve guaranteed that current bond holders will get destroyed once the sovereign debt bubble bursts, but he has also begun to inflate yet another massive bubble in U.S. equity prices.

February 04 2013 8:46 AM

The euro fell under pressure on Monday morning as political factors weighed on the currency. On Monday morning, the euro traded at 1.3593 as eurozone leaders began a series of meetings this week ahead of the European Union Summit on February 7-8. Spanish Prime Minister Mariano Rajoy unsettled markets when the Spanish newspaper, El Pais, reported that Rajoy and his party were involved in an illegal payment scheme.

February 01 2013 1:50 PM

In Switzerland, it's not just the clocks that are cuckoo. Over the past four years Swiss politicians and central bankers have gone on an unprecedented buying spree of foreign exchange reserves. In 2012, their cache swelled to as much as $420 billion worth of various currencies, primarily the euro. This figure is a seven-fold increase since 2008 and equates to 70% of the country's annual GDP. The sum translates to $200,000 per family of four, enough to keep the Swiss in clocks, chocolates, and fondue for many years to come. The Swiss leadership will claim the money has been "invested" with an eye to the future, but what they've done is impoverished themselves in the present. Although such a decision seems perverse, it makes perfect sense when seen through the lens of today's presiding economic thinking.

February 01 2013 9:21 AM

Friday morning began with the euro pushing past a new 13 month high as the currency's rally picked up again. The common currency traded at 1.3648 on Friday morning. The euro rose steadily as investors waited for news from the European Central Bank, which is planning to announce more loan repayments at 11:00 GMT. The repayment of the ECB's emergency three year loans is viewed by most as a sign that the euro debt crisis is easing.

February 01 2013 5:08 AM

The single currency could continue its ascending way after talking out 1.35 finally versus the greenback this week reaching 1.2645 cheered by better than expected release of EU Manufacturing PMI data of January drove it composite up to 47.9 while the market was waiting for 47.5 as the first reading came before from only 46.1 in December as Dec Italian PMI manufacturing index came at 47.8 from 46.7, the Spanish one came up to 46.1 from 44.6 and the germane rose to 49.8 from 48.8 in the first reading of it and from 46 in December to lead the index to this considerable rising despite the falling of the French one to 42.9 as the first reading came from 44.6.

January 31 2013 9:10 AM

The recent spate of better data on initial jobless claims has caused bond yields to rise, stock prices to rally and gold shares to tumble in the last few days. For the 6th time since 2010, an oasis of improving economic data (that has proven to be ephemeral each time in the past) is once again giving investors the false signal of a robust and sustainable recovery. This has in turn caused investors to once again wonder when the Fed would finally stop buying assets from banks and raise interest rates, which have been at zero percent for over four years.

January 30 2013 9:39 AM

The euro reached a 14 month high on Wednesday morning, pushing above $1.35 for the first time since December of 2011. The currency traded at 1.3513. The euro's rebound is largely attributed to the European Central Bank's efforts to do “whatever it takes” to keep the currency together. After rumors of a Greek exit from the currency and worries that the entire union would collapse, the region has stabilized allowing the currency to grow.

January 29 2013 3:22 PM

Although it was barely noticed by the American press, on January 22nd, EU finance ministers approved a new "Financial Transactions Tax" (FTT) that has implications for market competitiveness around the world. The move was conceived as a Franco-German initiative and was supported by seven other EU nations, including the entire bloc of highly indebted southern tier nations, to reach the minimum nine nations required to press ahead under the EU's so-called, 'enhanced co-operation procedures'. If at least one of the transacting parties involved is an EU resident, the tax will impose a one tenth of one percent tax (on both sides of a financial transaction) on secondary market trades in equities, bonds, securities and REPOS. Derivatives will be taxed at a lower one hundredth percent.