f-man
4Xangels Representative
- Messages
- 744
[FONT=&]Negativesentiment towards the Euro-zone has sent risk soaring lower throughout globalmarkets. Greece failed yet again to form a coalition and the Spanish bankingsector took a hit with the nationalization of Bankia, the nation´s thirdlargest bank. Spanish bank stocks were thrashed lower with the IBEX 35 Indexclosing at a 9-year low; down 2.6% on the day. Spanish 10-year government bondyields broke above 6%, the level viewed as unsustainable with regards toservicing debt. [/FONT]
[FONT=&]Interestingto note that Greece makes up for less than 2% of total Euro-zone output. Onemight ask why such a fuss over such an insignificant nation, relativelyspeaking? The reason being is that Greece´s struggle represents an idealogicalfailure for Europe and any departure by Greece from the Euro will represent amassive loss of political capital from Europe´s leaders. Contagion is also on theforefront of investor´s minds. If Greece goes, where does this leave Spain andItaly? [/FONT]
[FONT=&]Sellersof EUR need to be discussing tactics with their Dealer. We are at 3.5-yearhighs on GBP-EUR opening up a new trading range towards 1.3000. This is nowrealistic and as a business you need to ask how profitable you will be at theselevels. [/FONT]
[FONT=&]GBP-USDis following the risk-off trade and looks vulnerable to further downside moves.It seems we have reached a top and buyers of USD are encouraged to takeadvantage of 1.6000 while they still can. Speak to your Dealer about ourforecasts, bank forecasts, what to make of current economic issues, hedgingstrategies and overall risk management. [/FONT]
[FONT=&]Todayall eyes will be on The BOE rate decision where no change is expected with noadditional QE. With negative growth and shocking BRC Retail Sales, there is achance we could see further stimulus however. Keep an eye on this as this wouldmove GBP significantly lower.[/FONT]
[FONT=&]Interestingto note that Greece makes up for less than 2% of total Euro-zone output. Onemight ask why such a fuss over such an insignificant nation, relativelyspeaking? The reason being is that Greece´s struggle represents an idealogicalfailure for Europe and any departure by Greece from the Euro will represent amassive loss of political capital from Europe´s leaders. Contagion is also on theforefront of investor´s minds. If Greece goes, where does this leave Spain andItaly? [/FONT]
[FONT=&]Sellersof EUR need to be discussing tactics with their Dealer. We are at 3.5-yearhighs on GBP-EUR opening up a new trading range towards 1.3000. This is nowrealistic and as a business you need to ask how profitable you will be at theselevels. [/FONT]
[FONT=&]GBP-USDis following the risk-off trade and looks vulnerable to further downside moves.It seems we have reached a top and buyers of USD are encouraged to takeadvantage of 1.6000 while they still can. Speak to your Dealer about ourforecasts, bank forecasts, what to make of current economic issues, hedgingstrategies and overall risk management. [/FONT]
[FONT=&]Todayall eyes will be on The BOE rate decision where no change is expected with noadditional QE. With negative growth and shocking BRC Retail Sales, there is achance we could see further stimulus however. Keep an eye on this as this wouldmove GBP significantly lower.[/FONT]
