Posts Tagged "Mario Draghi"

Spring arrived this week

Posted by on Mar 10, 2014 in Featured, Market News, Uncategorized

Spring arrived this week

You may have heard that the British spend a lot of time talking about the weather. It’s true. But there is another nation that beats us on this score, the USA. In my view, they spend more time discussing the weather in the USA. They even have a dedicated weather channel on TV. Anyone following the US weather will be aware of their big winter freeze this year with exceptionally low temperatures. In her recent testimony to Congress, even Janet Yellen spoke of the impact of the freezing weather on economic activity in the USA. She mentioned that more data is needed as it is difficult to quantify the impact. When spring arrives, our collective mood improves and we feel more positive. The days are getting lighter, the weather is kinder and plants burst into growth. There is an impact on the economy as we head out and spend more. If people have to dig their way through snow drifts and fight off polar bears at the end of the street, they are hardly likely to be out there spending money and driving the economy forwards. Having said all that, the first green shoots of spring arrived this week. And they came from a surprising source – Europe. In his press conference on Thursday afternoon, Mario Draghi referred to the more positive data coming from Europe. Just the mention of growth caused the Euro to leap in value against the US Dollar. With spring arriving in Europe, it was only a short time to wait for the US figures (NFP) on Friday. Evidence from January and February suggested these figures were going to disappoint and the US economy was running out of steam. The dollar sold off again early on Friday giving a further opportunity to profit ahead of the figures. I was watching a trade in the market some 20 minutes ahead of the figures, I detected some buying of the US Dollar, not what I was expecting. As a trader, I am there to act on evidence though. It was this early buying that led me to close my Euro trade for a profit. At that time, I said to a fellow trader that I felt these figures are going to be better than the market expects. Nice when your gut feeling is right. Come the NFP announcement, the figures were better than expected and the previous month’s figures were revised upwards. Buy the dollar. It was an apt reminder that spring always follows winter. After the severe winter in the US, it was inevitable spring would arrive sooner or later. Following in Europe’s footsteps, the US NFP figures announced that spring arrived this...

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August trading review

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

August trading review

It’s been a quiet month, with trading volumes very low. Volumes of UK equities traded daily are about half the levels from earlier in the year. Yet the FTSE index has managed to reach it’s highest levels since early April. The current trend is showing upwards, with the moving averages all in the right direction and the 50EMA providing support yesterday. After a fantastic Olympics and now the amazing paralympics, eyes are not focused on trading just yet. When you look at the narrow trading range of EURUSD this week, and for much of August, you could be forgiven for thinking the market has gone into cardiac arrest. I can conjure up a picture of this now, the market lying moribund on the ground, not a movement. And rushing over with the defibrillator, Ben Bernanke and Mario Draghi. One of them is holding the left paddle, the other the right. Neither is too sure what to do next, but both are looking down at the patient. The patient is wearing a sweater with the words “world economy”. Now what? Both of them are preparing their next moves. For the defibrillator to work effectively, they’ll need to both act in unison. Problem is, they are facing different battles in their own respective continents, with a USA election imminent, a Greek progress report in a few days coupled with a constitutional court decision in Germany. All will be interspersed with a US holiday early next week, followed by non-farm payroll figures next Friday. Will the defibrillator be used? Or will the patient remain lifeless? There’ll be an interesting couple of weeks ahead. Happy...

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British summer and Draghi

Posted by on Aug 3, 2012 in Commentary, Market News, News

British summer and Draghi

A week ago, Mario Draghi, the head of the ECB was in London giving a speech. During that speech, he heaped support on the Euro project and actions in the pipeline to support it. It was not a case of doing something, but whatever was done would result in the end of the Euro crisis and there was no need to short the Euro any more. Wow. A week later, the ECB held its monthly meeting and was widely expected to do something. No-one knew what exactly, but it had to do something. The speech of last week caused a huge rally in the value of the Euro and a significant easing in the interest rates paid by Spain and Italy. Come the hour, it was a case of light the blue touch paper and retire to the sidelines to watch the display. We waited a long time and still nothing except talk. The inevitable damp squib followed. If talk of action moves the market one way, lack of action can just as easily move it the other way. That is precisely what happened next. The Euro fell, interest rates rose, stock markets sold off. It was another example of why the Euro crisis persists. Everyone knows that something needs to be done. But no-one is actually doing it. Yesterday’s conference by the ECB had much in common with the British summer this year. It promised so much, we all had high hopes. The reality is pretty miserable and it never seems to change. At least we can congratulate our Olympians who put in a fantastic performance...

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Waiting for Godot … or trading the Euro

Posted by on Aug 2, 2012 in Commentary, Market News, News

Waiting for Godot … or trading the Euro

Or is it waiting for Mario? The minutes coming from the meeting of the Fed yesterday did not give the markets the stimulus they were hoping for. There was a general acknowledgement that things are slow in the USA and everything is under close scrutiny. This could be loosely translated as jam tomorrow. No stimulus today, but maybe tomorrow. All eyes turn to the ECB now. After Mario Draghi’s comments last week, the market expects to see just what was meant by “everything in our power to save the Euro and it will be enough”. A drop in interest rates won’t qualify, as that is just business as usual. There has to be something of a “shock and awe” content to today’s announcements and the implementation has to be NOW, not sometime in the future once a new treaty is ratified by all member states. If Mario delivers, we can expect a rally in the value of the Euro. Otherwise, it is likely to start heading south again. Until the non-farm payroll figures tomorrow that is. My weekend has started already, I’m an observer on the sidelines through this and will resume trading the Euro once the dust settles...

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