Posts Tagged "eurozone"

Happy New Year

Posted by on Dec 31, 2012 in Commentary, Featured, Market News

Happy New Year

As a trader taking a backwards look at 2012, I can only conclude that it has been a strange kind of year. In the UK, the stock market is already closed for 2012. Anyone who has read some of my previous posts will guess how I am going to summarise 2012 though. A year when much changed and little was achieved. After three years of crisis, Greece and the problems of the Euro are firmly on the back burner as the world watches the USA head ever closer to the so called fiscal cliff. Does that mean the problems of the Eurozone are over? Have they been miraculously fixed? The only judgement call I can make is not yet. 2013 offers many more opportunities for European politicians (and others) to sit on their hands as central banks take centre stage once again, leaving the politicians to play catch up. With elections in the offing in Italy and Germany during 2013, not too much will change. The one thing we learned in 2012 was that central banks and central bank governors are amongst the most powerful political leaders on the planet. Sometimes, more so than heads of state. So for 2013, I would suggest any trader serious about making money and not getting caught out my market movements should pay attention to the central banks and bankers, finding out when they are due to meet, speak and give press conferences. Indeed, following recent elections, the Japanese central bank will be in the spotlight in early 2013. With the negotiations on the fiscal cliff already well into the eleventh hour, there is little prospect of any meaningful agreement. There will be fudges and compromises, but nothing long term anytime soon. So the US economy will be in the hands of the US treasury and the Fed top sort out. Doubtless they will come up with something, and the US economy will continue. But watch for the fall out and eventual fixes. Fun ahead then for 2013 and prosperity for careful traders. I wish you all a prosperous and happy New Year....

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After the Euro summit

Posted by on Jul 5, 2012 in Commentary, Featured, Market News

After the Euro summit

After the Euro Summit How quickly news drops out of the headlines. It was only a week ago that Eurozone leaders met for another in the series of Euro summits to save the Euro. Expectations were low, lower than a snakes belly in fact. Then something miraculous happened, an announcement of progress towards banking union. The markets immediately pushed the value of the Euro higher. Banking union is one of the pillars required to support a currency. One currency, one central bank standing behind it, with the central bank in turn monitoring and regulating the activities of the individual banks in it’s currency area. The outcome will normalise the currency, making it the currency of the “United States of Europe”. The markets have been very muted since the initial response, with the Euro drifting back towards 1.25 against the US Dollar. Yet interest rates in the “troubled” economies of the Euro area dipped. These seem to be contradictory messages and perhaps give an indication of the difficulties ahead. Today, both the ECB and the Bank of England meet to set out their respective responses to the weak economic backdrop. The ECB is expected to drop interest rates to a new all time low of 0.75%. The Bank of England is expected to create another GBP 50 billion of money for the economy. It would not be a massive surprise to me if either of these expectations were exceeded. Tomorrow is Non Farm Payroll in the USA. Once these figures are out of the way, we can get on with trading again. A more detailed examination of the Euro proposals has to follow in line with...

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