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Market essentials 11.05.2012 - Mixed Bag for the UK and More Negativity for the Euro

Discussion in 'Market Predictions and Reports' started by f-man, May 11, 2012.

  1. f-man

    f-man 4Xangels Representative

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    [FONT=&amp]-UK left interest rates on hold yesterday at 0.5% along with a freezing of their Quantitative Easing at £325bn. With inflation on course to exceed Bank of England forecasts and the economy struggling to recover; the policy makers arefirmly divided on how to solve the dilemma. With the decision to leave rates onhold; it is apparent that growth worries are increasing as the UK continues towrangle with government budget cuts, high unemployment and the looming threatof the Euro-zone debt crisis. [/FONT]
    [FONT=&amp]-The political stale mate is continuing in Greece after elections have raised concerns the country may leave the currency bloc and 50% of investors foreseeing an exit this year according to one poll. It is worth mentioning though that there are other view points out there with a more recent media studyof members of the Greek population that show that given the choice they wouldrather stay in the EURO over a move back to the Drachma. [/FONT]
    [FONT=&amp]-Meanwhile in Spain; with unemployment continuing to spiral ever higher across alldemographics and 10 year bond-yields now fetching over 6%; they are struggling to contain speculation that they too will need a bailout. [/FONT]
    [FONT=&amp]-As far as technical levels are concerned; we are expectant of a short-term pullback on GBP/EUR as some profit taking occurs and the "gap" higherfrom the beginning of the week looks to get closed. EUR/USD appears to befinding strong support at 1.29 with rumours of some current large barriers in the market and whilst GBP/USD appears to moving lower on profit taking from the large move higher it will be interesting to see if we can continue to hold above 1.60 or if we are destined to see this level break lower and see a large move back down toward 1.56. [/FONT]
    [FONT=&amp]-The focus today is on PPI from both the UK and the US being eagerly anticipated. With the close of the week upon us- how much influence will these figures haveupon the market and where they move next? [/FONT]
     

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