DAILY REPORT: Friday 5th April 2013

Central Bank activity was heating up overnight, with both US Treasuries and stock rallying. Currency markets were given a huge boost after the Bank of Japan, Bank of England and the European Central Bank all met in the last 24 hours. As mentioned yesterday the BOJ announced that it intends to achieve its 2% inflation target within two years, and in order to do so they will significantly boost monetary supply by JPY60-70 trillion per year - doubling the monetary base over the next two years. It was reported that the BOJ's main policy target is now the money supply and not the overnight call rate as

Read more: DAILY REPORT: Friday 5th April 2013

DAILY REPORT: Monday 1th April 2013

Markets last week began in an optimistic mood reacting to the news that Cyprus had reached an agreement over a 10b EUR bailout, but the mood just as quickly turned sour when the leader of the eurozone finance ministers, Jeroen Dijsselbloem, mentioned that the terms of the Cyprus bailout could be used as a template for the entire region

Read more: DAILY REPORT: Monday 1th April 2013

DAILY REPORT: Monday 25th March 2013

The European/Cypriot story, in a very European way, has continued to drag on over the weekend and this morning. The latest news this morning that the Euro Zone finance
ministers’ meeting in Brussels has been postponed till 0900GMT from 1700 GMT. With the disappointment that there has been no concrete or headline agreement over the
weekend, the EUR was trading softer this morning. The pair traded to a low so far of 1.2943 having opening around the 1.2975/85 level although currently consolidating

Read more: DAILY REPORT: Monday 25th March 2013

DAILY REPORT: Thursday 4th April 2013

'Risk off' seemed to be the theme of the day, as equity markets corrected overnight, giving back the gains of the previous trading session, whilst US Treasuries rallied again. Weaker than expected US data seemed to heighten market fears that the sequester fiscal spending cuts are actually hindering employment and growth in the world’s largest economy. The ADP private payroll estimate rose by 158k in March as

Read more: DAILY REPORT: Thursday 4th April 2013

DAILY REPORT: Thursday 28th March 2013

It was another night of headline concerns with the EUR falling below 1.2800 support as Cyprus together with the political stalemate in Italy continued to grasp the spotlight.
Today will be a test for the Cypriot population and the recent ECB/Cyprus announcements of the last few days, as banks are set to open with limits of EUR 300 on
withdrawals. In Italy the political uncertainty remains over the formation of a grand coalition and their bond auction went OK but wasn’t regarded as their best effort. Equity

Read more: DAILY REPORT: Thursday 28th March 2013

DAILY REPORT: Friday 22th March 2013

EURUSD traded in a familiar 1.2880-1.2950 range as the situation in Cyprus remains clouded in uncertainty. The latest reports suggest that the proposed solutions are moving in the direction of a good bank, bad bank, while the Cyprus Central Bank governor said the new bill guarantees deposits under Euro $100k. Simultaneously, Cypriot officials continue talks with Russia on its possible involvement in the bailout. The ECB have announced that their liquidity funding will remain in place until 25 March

Read more: DAILY REPORT: Friday 22th March 2013

DAILY REPORT: Wednesday 3th April 2013

Despite a slightly disappointing European PMI manufacturing figure, it was a positive night for equity markets, especially in Europe. The DAX rose 1.90%, the FTSE gained 1.20% and across the pond, the Dow finished the session 89.16 points in the black. The final read of the European PMI Manufacturing survey was close to expectations, but it confirmed the loss of momentum from February. The EUR continued to trade heavily,

Read more: DAILY REPORT: Wednesday 3th April 2013

DAILY REPORT: Wednesday 27th March 2013

Equity markets and commodities sighed relief overnight after better than forecast increases in US durable goods orders (+5.7% vs +3.9% expected) and home prices and treasuries erased losses. This came despite the Consumer Confidence Index in the US falling to 59.7 (67.5 expected, 69.6 prior). There were mixed messages from European officials which have continued to keep the EUR weak (albeit range bound) against most currencies including the USD. ECB members Coeure and Nowotny both

Read more: DAILY REPORT: Wednesday 27th March 2013

DAILY REPORT: Thursday 21th March 2013

The EURUSD has been consolidating around 1.2930-60 with sentiment shifting towards expectations of a constructive solution to the Cyprus crisis. The immediate
risks to markets appear to have been contained by the ECB continuing to provide liquidity to the Cypriot banking system. Banks will remain closed until next week and
capital controls are likely to be put in place once they do reopen. According to BNP Paribas' economists there are three possible outcomes to the crisis: 1) EU countries back down from Cyprus' contribution to the bailout plan; 2) Cyprus finds an alternative source of funding, including support from Russia (who hold significant capital within the banking system) or 3) Cyprus leaves the EU. While option 3 is not completely off the

Read more: DAILY REPORT: Thursday 21th March 2013

DAILY REPORT: Tuesday 2th April 2013

Consolidation seemed to be the key theme as markets returned from the Easter break. US equities have held onto their gains, and have remained broadly unchanged since mid March. Overnight, the S&P500 traded in negative territory for the majority of the US session and finished 0.45% in the red. US manufacturing ISM fell short of expectations,
slipping to 51.30 from 54.2 in February (new orders also fell but employment bucked the trend and was stronger). This was coupled with the weaker than expected 'official' China

Read more: DAILY REPORT: Tuesday 2th April 2013

DAILY REPORT: Tuesday 26th March 2013

When everything looked A-OK in Europe and things could be considered to be 'on the mend', they did what they do best overnight and talked. Fears were raised again that there could be another run on banks as the Dutch Fin Min Dijsselbloem (the Euro group head), stated that the Cyprus bank restructuring plan should be seen as a template for the rest of the Euro zone. EUR fell from highs of 1.3048 in Asia to a low of 1.2830. Although, there have been plenty of statements since from various European officials

Read more: DAILY REPORT: Tuesday 26th March 2013

DAILY REPORT: Wednesday 20th March 2013

Overnight EUR fell below 1.2850 (a four-month low) as the Cypriot parliament rejected the bank deposit levy bill but partially recovered to around 1.2890 after the ECB said it
will continue providing liquidity to the banking system “as needed within the existing rules”. The move by the Cypriot parliament should not be seen as the ultimate “no” vote to the bailout, as banks in Cyprus are closed until Thursday however we can likely expect a new/revised deal to emerge over the next 24 hours. The details remain highly

Read more: DAILY REPORT: Wednesday 20th March 2013