奔驰cla200怎么开:Euro below US$1.30 (3)

The German cabinet has reactivated its bank rescue fund (created post
Lehman’s) and, indeed, has agreed to increase its size to E480bn, from 360bn previously. The EBA has mandated that German banks must raise E13.1bn by June next year – still, far, far too little;

The WSJ quotes the European Council’s President Mr Rumpoy who expressed concern that last week’s political deal amongst the Euro Zone countries may be difficult to implement into a “watertight legal pact”. In addition, as the deal involves bilateral agreements, which was the fall back position, given the UK’s veto to a new treaty, the role that the European Commission can play must be suspect;

Italy sold E3bn (the maximum) of 5 year bonds today at a rate of 6.47%, as opposed to 6.29% on 14th November – however, the highest rate since 1997. Bid to cover was 1.42, as opposed to 1.47 previously.
Markets remain concerned as to PIIGS debt, though the auction results were close to expectations, possibly marginally worse;

Emails suggest that James Murdoch may have been “economical with the truth”. The content of the emails sent to Mr Murdoch reveal that there was widespread phone hacking at the News of the World. Mr Murdoch denies having read the emails !!!!!. Whatever, News International’s position will be under pressure, both in the UK and the US;

UK unemployment rose to a 17 year high. With a weakening economy, the situation will deteriorate further. Average earnings in the 3 months to October declined to 2.0%, from 2.3% in the previous 3 months, which will enable the BoE to increase its QE programme (a further ￡100bn -
￡125bn) in Feb/March;

US retail sales rose by only +0.2% in November, lower than the +0.6% forecast. However, October’s data was revised upwards to +0.6%, from
+0.5% previously reported. Car and truck sales rose by +0.5% to an
annual rate of 13.6mn, the best since August 2009. Sales of electronics increased by +2.1% and on line retailers were up +1.5%.
Lower petrol prices reduce petrol station sales by -0.1%, though clearly will help in terms of disposable income;

The FED reported that the US economy “has been expanding moderately”, though expressed concern about slowing global growth, which “continue to pose significant downside risks”. Bernanke added that unemployment would decline “only gradually”. He did not announce any new measures, which was taken negatively by markets, though the message contained in his statement suggests that the FED has a bias to easing further, in some way. Still believe that further QE is likely.
The market reacted negatively – traders expected further moves towards easing – totally unrealistic at this stage;

The race for the Republican nomination to contest for the Presidency is in shambles. Allegedly Ron Paul is ahead in Iowa, Gingrich is gaining support, whilst Romney’s support is weakening. The only winner out of this is clearly Obama;

CME’s Mr Duffy’s testimony to the Senate Committee implies that MF Global were effectively “cooking the books”. He also challenged Mr Corzine’s testimony. This is going to get really messy. It remains staggering that the senior management of MF Global continue to allege that they do not know where client money went;

Markets reversed early gains on a much weaker Euro yesterday and disappointment that the FED did not announce further easing measures yesterday – they remain weak today. Personally, I believe the FED said more than enough, though am not surprised by the Euro’s weakness.

Germany continues to block measures re the Euro Zone, though the rhetoric is changing – officials are using the line “at this stage”.
This slowly, slowly process towards (the inevitable) QE/ECB bond buying will cost Germany far, far more ultimately. Another crisis looks more and more certain.

Next year, the composition of the ECB changes, with the appointment of the Frenchman Mr Coeure. These representatives will be pushing for more aggressive bond buying/QE by the ECB. To put the issue in context, the FED has bought US$2tr of bonds, the ECB only approx US$325bn and the BoE (once the current programme has been completed US$420bn, with a further increase of US$150bn – US$185bn+ certain).
Furthermore the ECB continues to sterilise proceeds. Complete and utter madness.

The Euro is trading below E1.30. Further weakness is very likely. Cant see any reason to buy the markets at present – indeed, short Euro against the US$, and short the indicies seem to be the right move.