Forex Crunch » ECB

Draghi Opens Door to Greek Aid by the ECB

Yohay — Thu, 09 Feb 2012 14:34:15 +0000

The president of the of the ECB provided a loop hole to contribute to the Greek bailout. He said in the press conference:

“If the ECB distributes profits to governments, that’s not monetary financing” – there might be a way to provide ECB profits from Greek bonds to Greece – an indirect way of helping the debt struck country.

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ECB Press Conference Live Blog

Yohay — Thu, 09 Feb 2012 13:18:05 +0000

ECB president Mario Draghi left the interest rate unchanged for a second month in a row. In the press conference, Draghi will explain the decision, discuss the LTRO and will likely be “grilled” on the ECB’s contribution to the Greek bailout.

Follow all the updates in the live blog, as Greek news continue to flow and a report about a “done deal” by the FT rocks the markets.

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ECB Leaves Rates Unchanged – All Eyes on Draghi as Euro Pressured

Yohay — Thu, 09 Feb 2012 12:45:32 +0000

The European Central Bank left the benchmark interest rate unchanged at 1.00%. This was widely expected.

Update: Follow the live blog of the ECB Press Conference

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EUR/USD Feb. 9 – On Higher Ground After Greek Progress, Before Draghi

Yohay — Thu, 09 Feb 2012 09:49:03 +0000

Euro dollar broke another minor resistance line and reached new 2012 highs as Greek leaders managed to agree almost on everything, in the hide of the night. The focus now moves to the ECB. Mario Draghi is expected to leave rates unchanged and will be requested to provide answers on the contribution of the central bank to the Greek bailout. In addition, we will get a fresh job figure from the US, following the astounding NFP. Busy day.

Here’s an update on technicals, fundamentals and what’s going on in the markets.

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Chinese New Year fuels inflation

Yohay — Thu, 09 Feb 2012 09:21:07 +0000

In a major blow to hopes that Chinese policy officials would sanction a further easing of financial conditions, inflation in January rose to 4.5% YoY, up from 4.1% in the final month of 2011 and well above expectations. In the month of January alone, prices were up by 1.5%, which represents the largest monthly increase since 2008.

Part of the explanation for the higher rate of prices growth is the distortion from the Chinese New Year, which often triggers a surge in spending. Even so, what will most concern policy-makers is that consumer spending is still so strong, despite a determined regime of tightening over the past eighteen months.

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5 Reasons Not To Cut Rates – ECB Preview

Yohay — Thu, 09 Feb 2012 09:11:55 +0000

Those expecting a third rate cut from Draghi might be disappointed. The ECB will likely repeat the “business as usual” stance that worked so well last month.

There are 5 reasons for the ECB to wait and see for another month.

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EUR/USD Feb 8 – Bouncing from High Resistance on Slow Greek Progress

Yohay — Wed, 08 Feb 2012 10:03:18 +0000

Euro dollar bounced off high resistance after the break higher yesterday. Political leaders in Greece made significant steps forward, and also the ECB may be willing to indirectly accept losses on Greek bonds, lowering the debt load on the Hellenic Republic. It seems that Germany counters this concession with a new idea to postpone the lion’s share of the Greek aid to keep the pressure high in Athens. It’s all Greece today as intensive talks in Athens continue.

Here’s an update on technicals, fundamentals and what’s going on in the markets.

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EUR/USD Feb 7- Waiting in Range for more Greek Cuts

Yohay — Tue, 07 Feb 2012 11:38:31 +0000

Euro dollar is steady in the middle of the range, as talks between Greek leaders are close to conclusion regarding the terms of the bailout. Greek politicians have little choice, but they want to improve their position before the elections. In the meantime, Germany and France want to segregate the bailout money in a separate account, while Greece checks out its default options. Ben Bernanke returns to the scene later on.

Here’s an update on technicals, fundamentals and what’s going on in the markets.

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The allure of a safe-haven (Video)

Yohay — Thu, 02 Feb 2012 09:08:11 +0000

One of the more remarkable developments during January was the relatively strong performance of the traditional safe-haven currencies, principally the yen and Swiss franc. We wrote about this during the course of last month, but the Swissie is particularly under the spotlight, given the proximity of EUR/CHF to the 1.20 floor imposed by the SNB last September.

The Swissie only needs to appreciate another 0.5% vs. the euro to reach the 1.20 level, so the market is becoming increasingly nervous of further intervention by the central bank. The remarkable thing is that this has come at a time when the euro has been subject to some fairly severe short-squeezes, a function of the stretched short positions which lie beneath (see comments below). Video:

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The unbearable lightness of being

Yohay — Fri, 27 Jan 2012 09:07:05 +0000

Europe is still stumbling through a sovereign debt crisis, Greece is close to default, Portugal is in dire need of more cash yet, risk appetite so far this year has been a minor revelation. Some major equity markets such as the DAX and the Hang Seng are up more than 10%; BRIC equities are also motoring ahead with both the Sensex and Bovespa recording double-digit percentage gains so far in 2012; the gold price has jumped more than USD 150 and the Aussie is up almost 5%.

A number of explanations can be presented to account for this surge in optimism. Firstly, the US economy thus far is largely unaffected by Europe’s malaise, notwithstanding Bernanke’s suggestion that more QE may well be required. Secondly, Mario Draghi’s bold gamble on providing Europe’s troubled banks with unlimited funds for three years has definitely helped to stabilise the situation. Video:

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