1. Markets have advanced in recent days, apparently in expectancy of momentous development from this week’s EU Summit.
2. Markets Waiting for Europes Grand Plan.
3. Traders are still digesting the potential comprehensive solution expected between now and Friday. However, remains significant details missing from the new treaty, specifically private sectors participation and framework for enforcement.
4. Sarkozy and Merkel have assured the market that the ground work is complete and all will be finalized at the summit on Thursday and Friday
5. US Treasury Secretary Geithner was in Europe were he pledged to support the German / French strategy for tighter fiscal integration. The other big news was that the S&P put 15 Eurozone nations' long-term bond ratings on credit watch negative, then later in the day added the EFSF long term AAA rating on the same list.
6. Criticism from Germany and France has been subdued so far, however, European Central Bank Governing Council member Nowotny was quick to call the announcement 'politically motivated'. Nowotny went on to say “The timing and the scope of this warning has a clearly political context, a rating agency has entered the political arena
7. European policy makers cleverly shifted the news by stating that the announcement would only spur them into action. Sovereign bond struggled for most of yesterday but there was no sense of alarm that has infected markets during other ratings announcement.
8. Currency markets have be the primary channel for a majority of the headline reactions as traders have been quick to position themselves ahead of the ECB meeting where there is speculation that critical components of the Europe sovereign crisis cure all will be revealed.
9. On a final note there is indication that European policy makers are considering turning the ESM into an institution which would permit it to access ECB funding.
10. SNB FX reserves that still have more to expand and official comments from SNB Hildebrand and Jordon hinting to a higher EURCHF “floor
11. There has been chatter that the BIS has been buying EUR on behalf of the SNB
12. We now suspect that by mid December the SNB will move the EURCHF “floor” to 1.2500 and possibly 1.3000. But perhaps the more interesting trade will be long USDCHF.
2. Markets Waiting for Europes Grand Plan.
3. Traders are still digesting the potential comprehensive solution expected between now and Friday. However, remains significant details missing from the new treaty, specifically private sectors participation and framework for enforcement.
4. Sarkozy and Merkel have assured the market that the ground work is complete and all will be finalized at the summit on Thursday and Friday
5. US Treasury Secretary Geithner was in Europe were he pledged to support the German / French strategy for tighter fiscal integration. The other big news was that the S&P put 15 Eurozone nations' long-term bond ratings on credit watch negative, then later in the day added the EFSF long term AAA rating on the same list.
6. Criticism from Germany and France has been subdued so far, however, European Central Bank Governing Council member Nowotny was quick to call the announcement 'politically motivated'. Nowotny went on to say “The timing and the scope of this warning has a clearly political context, a rating agency has entered the political arena
7. European policy makers cleverly shifted the news by stating that the announcement would only spur them into action. Sovereign bond struggled for most of yesterday but there was no sense of alarm that has infected markets during other ratings announcement.
8. Currency markets have be the primary channel for a majority of the headline reactions as traders have been quick to position themselves ahead of the ECB meeting where there is speculation that critical components of the Europe sovereign crisis cure all will be revealed.
9. On a final note there is indication that European policy makers are considering turning the ESM into an institution which would permit it to access ECB funding.
10. SNB FX reserves that still have more to expand and official comments from SNB Hildebrand and Jordon hinting to a higher EURCHF “floor
11. There has been chatter that the BIS has been buying EUR on behalf of the SNB
12. We now suspect that by mid December the SNB will move the EURCHF “floor” to 1.2500 and possibly 1.3000. But perhaps the more interesting trade will be long USDCHF.
M.Zohaib Gadit
Forex Trading Consultant, Shivani Financial
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