Fitch Ratings downgraded the country’s credit rating from A to BBB, with a negative outlook. The BBB credit rating is just two notches higher than junk status.
Neal Vanderstelt - Currency Analyst
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Friday, June 8, 2012
Thursday, June 7, 2012
Greece & Spain on the ropes, Operation Twist ends...
Extreme pressure on the Euro followed by extreme pressure on the global economy. After last week’s disappointing NFP, the FED(US) will look for dovish measures to stimulate the economy as operation twist (program to lengthen maturities of debt on the central bank's balance sheet) comes to an end this month. Operation twist could be extended according to Federal Reserve Bank of Atlanta President Dennis Lockhart.
All eyes will be on FED Chairman Ben Bernanke with a policy-setting FOMC meeting June 19-20 to consider if more stimulus is needed after the economy added the fewest jobs in a year in May.
European economy is still in turmoil with struggling Greece and Spain highlighting the Euro's weakness. Meanwhile investors eye the key Greek election in June which will decide the flavor of the "new" Greek government.
Neal Vanderstelt - Currency Analyst
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All eyes will be on FED Chairman Ben Bernanke with a policy-setting FOMC meeting June 19-20 to consider if more stimulus is needed after the economy added the fewest jobs in a year in May.
European economy is still in turmoil with struggling Greece and Spain highlighting the Euro's weakness. Meanwhile investors eye the key Greek election in June which will decide the flavor of the "new" Greek government.
Neal Vanderstelt - Currency Analyst
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Monday, June 4, 2012
Bank Runs In Greece - so in the face - Even Fox News Reports it
Neal Vanderstelt - Currency Analyst
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What is a Grexit and why? Bad English or......
Well it's not as bad as a Spexit lol. A Grexit *Gr-Exit* is a pun word for a Greek exit out of the Euro-zone. The Spexit *Sp-Exit* --- you guessed it!! Is a Spanish exit out of the Euro-zone. People got bored of talking about Greek exiting the euro-zone because it's meantioned so much that they made pun word out of it.
Neal Vanderstelt - Currency Analyst
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Neal Vanderstelt - Currency Analyst
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Sunday, June 3, 2012
The Euro-Zone Report: Technically The Euro in Downtrend since mid-2008
The Euro-Zone Report: Technically The Euro in Downtrend since mid-2008: While the Euro has been in trading news everyday over Greece and Spain - technically the Euro has been in a major down-trend since July 2008...
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Neal Vanderstelt - Currency AnalystPlease rate & recommend:
Technically The Euro in Downtrend since mid-2008
While the Euro has been in trading news everyday over Eurozone countries like Greece or Spain - technically the Euro has been in a major down-trend since July 2008 when the EUR/USD made it's last poke higher - peaking at the 1.6000 level. The chances of the Euro going back above that level anytime soon are slim to none and the currency pair will stay below that peak for some time to come.
The weekly chart below clearly shows a strong long-term and medium-term downtrend:
If there was ever a "contrarian trade" now would be the time if the Euro is to recover because it would be very oversold if there's a case for recovery in June. However should the debt crisis lead to a member(s) to exit the Euro, it is quite possible the Euro could continue to slide, and it could slide to it's demise because there are many holes in the Eurozone economy.
One has to weigh several factors and consider:
1. just how much of an impact the weaker countries in the Euro have to the overall value of the Euro;
2. what it means to the stronger members if a weaker member defaults or continues to need bailouts (perhaps a default or two would be good because of the bailout burden but it would likely effect the exchange rate - the fear is a landslide collapse and domino effect from other eurozone countries that might decide to leave while the door is open);
3. the state of the global economy and the prospects of the Euro-zone being able to pull out of Europe's recessionary conditions in a weak global environment;
4. if the weaker members do not leave the Euro what it will mean to stronger members (primarily Germany, 2ndly France - the largest EU countries) who have to carry the smaller members weight by providing them "large" bailouts (the bailout problem is worse the longer the economy does not recover and should larger medium size members need bailouts (likely they will especially after it all tanks) it will be tougher bailing them out than bailing out a little country/economy like Greece - which has already made the Germans angry - when the bigger one's need the same type of stimulus the show could likely be over because they will need much more than Greece).
June seems to be a very critical month with risk assets (major equities in particular and commodities) gaining selling momentum which spurs concerns of a major collapse; combined with the turmoil in Greece, trouble in Spanish bond market (a banking sector saddled with toxic loans), weak US non-farm payrolls, weak US jobs market data, the Greek election in June, and the US FOMC meeting; it is a long list of things to consider that could either make or break the market this month.
Should it be that the data is at it's lowest point for the year and the FOMC pumps the market there could be a considerable bounce. But if the turmoil is too strong it could tip the risk markets for a deeper fall.
Neal Vanderstelt - Currency Analyst
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The weekly chart below clearly shows a strong long-term and medium-term downtrend:
If there was ever a "contrarian trade" now would be the time if the Euro is to recover because it would be very oversold if there's a case for recovery in June. However should the debt crisis lead to a member(s) to exit the Euro, it is quite possible the Euro could continue to slide, and it could slide to it's demise because there are many holes in the Eurozone economy.
One has to weigh several factors and consider:
1. just how much of an impact the weaker countries in the Euro have to the overall value of the Euro;
2. what it means to the stronger members if a weaker member defaults or continues to need bailouts (perhaps a default or two would be good because of the bailout burden but it would likely effect the exchange rate - the fear is a landslide collapse and domino effect from other eurozone countries that might decide to leave while the door is open);
3. the state of the global economy and the prospects of the Euro-zone being able to pull out of Europe's recessionary conditions in a weak global environment;
4. if the weaker members do not leave the Euro what it will mean to stronger members (primarily Germany, 2ndly France - the largest EU countries) who have to carry the smaller members weight by providing them "large" bailouts (the bailout problem is worse the longer the economy does not recover and should larger medium size members need bailouts (likely they will especially after it all tanks) it will be tougher bailing them out than bailing out a little country/economy like Greece - which has already made the Germans angry - when the bigger one's need the same type of stimulus the show could likely be over because they will need much more than Greece).
June seems to be a very critical month with risk assets (major equities in particular and commodities) gaining selling momentum which spurs concerns of a major collapse; combined with the turmoil in Greece, trouble in Spanish bond market (a banking sector saddled with toxic loans), weak US non-farm payrolls, weak US jobs market data, the Greek election in June, and the US FOMC meeting; it is a long list of things to consider that could either make or break the market this month.
Should it be that the data is at it's lowest point for the year and the FOMC pumps the market there could be a considerable bounce. But if the turmoil is too strong it could tip the risk markets for a deeper fall.
Neal Vanderstelt - Currency Analyst
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The Euro-Zone Report: Euro in big trouble US markets crash
The Euro-Zone Report: Euro in big trouble US markets crash: US stock markets crashed as fear controlled the market over global economic concerns and weak domestic data. The market feel sharply after ...
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Neal Vanderstelt - Currency AnalystPlease rate & recommend:
Friday, June 1, 2012
Euro in big trouble US markets crash
US stock markets crashed as fear controlled the market over global economic concerns and weak domestic data. The market feel sharply after weak jobs data hit the market but the market was already sliding/weak. It was the worst day in 6-months providing market contagion concerns.
Crude oil also came crashing down with equites but the gold commodity went opposite to oil suggesting there is a great amount of fear to currencies and the looming fed meeting which could signal more injections via quantitive easing speculations to prop the economy/stock market.
U.S. nonfarm payrolls and jobs data were the key concerns in US markets which turned out to have a negative influence on the market. The Labor Department said 69,000 jobs were created during May, the smallest increase in a year and well short of economists’ forecasts. The unemployment rate rose to 8.2 percent from 8.1 percent in April, the first increase in 11 months. Analysts had expected U.S. non-farm payrolls to rise 150K last month. The data provided evidence that the economy is still deteriorating.
The drop in equities is particularly concerning in that it wipes out yearly gains.
Gold may be providing a safe haven to investors with uncertainty (if not out right fear) in the cash markets.
Unemployment in the euro zone has reached 11% in April and March, the highest since the data started in 1995.
The EUR/USD finished it's last hours of the trading week with a dramatic bounce during the US close from the 1.2280's but the 2010 June low (1.1870's) has yet to be tested. If the US props the market or Euro confidence is restored we might not see this low.
European sovereign debt crisis continued to be a shadow of every market fall with Greece and Spain on the forefront of EU woes to haunt the Euro lower - just when you think they are out of the news they come back in with more gloom.
Greece will elect a new government this month. Coupled with the FOMC meeting in the US it could lead to some very difficult and perhaps a turbulent month if issues are not resolved regarding European unity and the health of the US economy.
Crude oil ended the week down 8% coupled with weak global data out of US, China, and Europe falling in tandem.
Neal Vanderstelt - Currency Analyst
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Crude oil also came crashing down with equites but the gold commodity went opposite to oil suggesting there is a great amount of fear to currencies and the looming fed meeting which could signal more injections via quantitive easing speculations to prop the economy/stock market.
U.S. nonfarm payrolls and jobs data were the key concerns in US markets which turned out to have a negative influence on the market. The Labor Department said 69,000 jobs were created during May, the smallest increase in a year and well short of economists’ forecasts. The unemployment rate rose to 8.2 percent from 8.1 percent in April, the first increase in 11 months. Analysts had expected U.S. non-farm payrolls to rise 150K last month. The data provided evidence that the economy is still deteriorating.
The drop in equities is particularly concerning in that it wipes out yearly gains.
Gold may be providing a safe haven to investors with uncertainty (if not out right fear) in the cash markets.
Unemployment in the euro zone has reached 11% in April and March, the highest since the data started in 1995.
The EUR/USD finished it's last hours of the trading week with a dramatic bounce during the US close from the 1.2280's but the 2010 June low (1.1870's) has yet to be tested. If the US props the market or Euro confidence is restored we might not see this low.
European sovereign debt crisis continued to be a shadow of every market fall with Greece and Spain on the forefront of EU woes to haunt the Euro lower - just when you think they are out of the news they come back in with more gloom.
Greece will elect a new government this month. Coupled with the FOMC meeting in the US it could lead to some very difficult and perhaps a turbulent month if issues are not resolved regarding European unity and the health of the US economy.
Crude oil ended the week down 8% coupled with weak global data out of US, China, and Europe falling in tandem.
Neal Vanderstelt - Currency Analyst
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