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Japanese Stocks Are Up, But Don’t Fall for the Trap By Jeff Uscher, Contributing Writer, Money Morning Japanese stocks hit a new 2012 high today (Wednesday) and the yen weakened to a 20-month low against the U.S. dollar as Shinzo Abe was installed as Japan’s 96th prime minister. Abe, who served as prime minister in 2006-2007 but stepped down due to health issues, has vowed to pursue aggressive monetary easing to end deflation and [...] The outcome of the presidential election on November 6 is already expected to be a market-mover.
Societe Generale’s top currency strategist, Kit Juckes, hints this morning in a note to clients that the event may have just gotten a bit more important since the hurricane. Juckes writes that because the economic data that comes out next week during the election will be distorted by the effects of Hurricane Sandy, the focus will [...] Market participants watching the Federal Reserve for clues as to what the central bank’s next monetary policy announcement will be are scratching their heads right now.
The line among Wall Street analysts for a while has been to expect QE3 or some other form of additional policy easing in September. BofA economists Ethan Harris and Michelle Meyer issued a note to clients yesterday saying, “We believe it has become increasingly possible that [...] These are stories Report on Business is following Wednesday, July 18, 2012. Follow Michael Babad and the Globe’s top business stories on Twitter. Now she tells us In an interview posted on the website of the chancellor’s Christian Democratic Union today, Ms. Merkel said the leaders of the European project have to keep at it, but [...] China’s slowdown may deepen as policy makers unwind the excesses of a record credit boom while gradually stepping up stimulus, leaving 2012 growth at the weakest in 13 years, Pacific Investment Management Co. says. “The economy is unlikely to bottom until the third quarter,” Ramin Toloui, Pimco’s global co-head of emerging markets portfolio management in Singapore, said in e-mailed comments yesterday. “Policy makers will progressively turn the dial toward more stimulus, [...] Jeff Cox Government has become its own worst enemy when it comes to the economy, with public spending putting a damper on growth that otherwise continues at a steady if unspectacular pace. Friday’s gross domestic product report confirmed what a drag government can be: While consumer spending grew at a 2.9 percent clip, state and local governments cut back spending by 1.2 percent on an annualized basis and the federal [...] Guardian Europe‘s sovereign debt crisis exploded back into life on Tuesday, with markets across the continent rocked by a wave of panic selling amid renewed fears about the impact of savage austerity measures in Spainand Italy. The mood of uneasy calm seen across Europe since the Greek bailout in February was shattered as financial markets took fright at evidence of a double-dip recession and growing popular opposition to welfare cuts and tax increases. Italy and [...] By William L. Watts, MarketWatch FRANKFURT — Greece continues to rattle investor nerves ahead of a Thursday deadline for private investors to voluntarily offer up Greek government bonds in a debt swap that will cut the value of their holdings by more than half. Strategists blamed jitters over the process combined with concerns over global growth prospects as spoiling investor appetite for risk on Tuesday, sending European and U.S. [...] By William L. Watts, MarketWatch FRANKFURT — It’s the big question captivating currency markets in 2012: Is the euro becoming a popular funding currency for carry trades? Carry trades are a popular strategy that rely on selling a weak, low-interest-providing currency and using the proceeds to buy higher-yielding assets elsewhere. It’s a role that was famously filled by the Japanese yen after the Bank of Japan slashed interest rates toward [...] From Economic Policy Journal: Dr. Pippa Malmgren has just posted on her web site her latest analysis of the eurozone crisis. I will point out, again, what I have pointed out in the past. They don’t get more insider than Malmgren. She served as financial market advisor in the White House and on the National Economic Council from 2001-2002, where she was responsible for financial market issues. She founded Malmgren and Company, [...] by ZH Yesterday, when describing the situation in Europe, Robert Rennie, chief currency strategist in Sydney at Westpac said, “with Italy we’re talking about the third-largest government bond market in the world going into a meltdown situation.” That meltdown situation could commence as soon as a few hours from now when the 2010 budget review is voted on. Here is Credit Suisse Giovanni Zanni summarizing the probability outcome matrix for Italy [...] Andrew Busch, a global currency strategist in Chicago at Bank of Montreal, spoke in a conference call today with investors about the Swiss National Bank’s decision to peg the franc to 1.20 or weaker per euro. On the peg: “I would assume the Swiss National Bank is going to absorb around 200 billion euros ($279.8 billion) in a relatively short period of time, perhaps within the first two months, to make a [...] WSJ: Tokyo shares fell sharply early Friday as the global selloff hit Asia’s biggest equities marketBy LESLIE SHAFFER SINGAPORE–Asian shares were sharply lower Friday following a selloff on Wall Street as grim U.S. data triggered fresh concerns of a global economic slowdown. Gold hit a fresh high buoyed by its safe-haven status. “Concerns about the outlook for the U.S. and the global economy have been reinforced yet again,” said Tsuyoshi Segawa, an equity strategist at Mizuho Securities. “So much for two-way risk in markets. [...] By Ken Sweet, contributing writer July 12, 2011: 3:23 PM ET Click the chart for more commodities data. NEW YORK (CNNMoney) — Gold jumped to a record high Tuesday after the minutes from the Federal Reserve’s June policy meeting indicated the central bank might be open to more monetary stimulus. Gold futures for August delivery climbed $13.10, or 0.9%, to a record high of $1,562.30 an ounce. In after-market [...] By Javier E. David Of DOW JONES NEWSWIRES NEW YORK (Dow Jones)–China’s deep pockets are momentarily keeping the euro supported. But with Greece’s financial future still uncertain even after lawmakers passed an austerity package on Wednesday, and the single currency’s long-term prospects far from assured, Beijing risks learning a lesson about trying to fight a market more inclined to sell than buy. For months, whispers of “Asian official buying” [...] 1) Portugal T-bill sale points to depth of debt worries “The average yield on the Sept. 23 maturity rose to an all-time high of 4.967 percent for the shortest T-bills, up from 4.652 percent in the previous auction of three-month paper — the closest comparable maturity — on May 4. Elisabeth Afseth, fixed-income analyst at Evolution Securities in London said the high yield was surprising after some improvement [...] For the better part of the past decade, and particularly in the last few months, the American dollar has been the 98-pound weakling of the foreign exchange world. It has lost value against almost every other global currency — not just the euro, pound and yen but even the Romanian new leu and the Latvian lats. Driven largely by the Federal Reserve’s policy of printing dollars to help spur a [...] The dollar sank further Wednesday and gold and silver prices surged as Federal Reserve Chairman Ben S. Bernanke signaled the Fed was in no hurry to tighten credit. The DXY index of the dollar’s value against six other major currencies (charted below) fell to 73.29 at about 1:05 p.m. PDT, down nearly 0.8% from Tuesday and its lowest level since Aug. 2008. The index now is down 7.3% [...] April 27 (Bloomberg) — The dollar fell to a 16-month low versus the euro on speculation the Federal Reserve will consider further easing measures at today’s meeting to support the U.S. economy after its bond-buying program expires in June. The yen weakened against all of its major counterparts after Standard & Poor’s cut Japan’s sovereign-rating outlook to “negative.” The Australian dollar rose to a record after [...] The euro climbed to a four-month high against the dollar as a report showed European investor confidence rose to the highest level in 3 1/2 years, fueling bets the European Central Bank will raise interest rates. The 17-nation currency climbed above $1.40 for a second day. An index measuring sentiment in the euro region rose to 17.1 from 16.7 in February, Limburg, Germany-based Sentix research institute said today. ECB President Jean-Claude [...] |
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Investor Alert: A Market Correction Imminent As German Ruling Is Likely To Be The End Of The Euro Rally
German ruling the end of the euro rally, Nomura says
The ruling, along with last week’s European Central Bank announcement it will buy sovereign bonds, drove a rally in assets considered riskier, including the euro and stocks, and weighed on safe havens like the U.S. dollar DXY -0.24% and Treasury bonds, said Jens Nordvig, a currency strategist at Nomura Securities.
“But it is now time to take stock. How much [...]