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: Tuesday 19th March 2013

All about Europe and more specifically Cyprus overnight as the uncertainty of the bank deposit plan continues to linger. After initially postponing the vote, the Cypriot parliament is expected to vote at 16:00GMT today. The latest headlines suggest that the DIKO party, which was initially expected to support the bill, will vote against. While this complicates the prospects for passing the bill, it is also likely that the initial proposal will need to be amended, probably in the direction of reducing the burden on the smaller depositors (as per the latest commentary from ECB’s Asmussen and the Cyprus government). The

Read more: DAILY REPORT: Tuesday 19th March 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: Monday 18th March 2013

All focus has been on the Cyprus headlines over the weekend. The unprecedented and controversial EUR 10 bio bailout for Cyprus which will require a one-off 10% levy on Cyprus bank deposits that will raise EUR 6 bio. The “savings levy” led to a run on cash machines all over Cyprus over the weekend. Since the open EUR has seen only one
way traffic opening 100 pips lower on Fridays close and now trading around the 1.2930 level having touched a low so far of 1.2905. Although German finance Minister

Read more: DAILY REPORT: Monday 18th March 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: Friday 15th March 2013

Equities continued their strong performance overnight in both Europe and the US and the dollar fell against the majors (with the exception of JPY). EUR traded to a high of
1.3032 as EU leaders indicated in a draft statement that they may grant some European nations extra time to bring down their deficits. Also assisting the risk on mode was good
demand for Spanish bonds and comments from Spanish officials that local banks were less reliant on the ECB for funding now. Elsewhere jobs numbers in the US were better
than expected with initial jobless claims falling 10k to 332k. After the Australian jobs

Read more: DAILY REPORT: Friday 15th March 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

DAILY REPORT: Thursday 14th March 2013

The dollar found support overnight, reaching a 3mth high against the EUR at 1.2924, after US retail sales for February were firmer which bolstered the outlook for the US
prompting equities to continue their run higher. Coupling the move lower in the EUR, Italian 10 year bond yields rose and Spain’s rose 4 pts as well, however there were several other auctions that went relatively well. Germany sold 4.3bio of 2year, UK issues 1.5bio and Ireland sold 5bio of 10year which was the biggest sale since the country sought a bail out in 2010. So as stated recently the periphery spreads will remain

Read more: DAILY REPORT: Thursday 14th March 2013