The Eurozone just might be able to stay out of the limelight later today as the Fed decision is due. Our base case remains for some form of ‘Operation Twist’ but we do not believe this will have the dollar debasement effect that QE2 had. Continue reading →

S&P downgraded Italy’s long-term debt by one notch overnight, from A+ to A, on expectations of weak growth. It also cited the country’s fragile politics as a hindrance to its ability to reduce debt. The outlook on debt remains negative. Continue reading →

The euro continued to suffer on Monday during the Asia session concerns mount over the situation in Greece. With another EUR8bn in funding by the Troika witheld and Greece’s current cash running out, investors appear willing to price in a greater chance of default. Prime Minister Papandreou cancelled a planned trip to the US stating the need to remain in the country as talks with the troika resume. Continue reading →

Risk sentiment improved in Asia, mainly on the back of yesterday’s constructive performance of European and US markets after news that the BoE, ECB, BoJ, and SNB were opening dollar swap lines with the Fed. This is a clear sign that central banks want to dispel concerns about dollar funding. ECB President Trichet said the globally coordinated decision on dollar liquidity is a clear illustration of close cooperation between central banks. Continue reading →

Risk sentiment was stable in Asia, mainly in reaction to yesterday’s constructive performance of European and US stock markets. Sentiment improved mainly on the notion that Greece will receive the next aid tranche from the IMF/EU after German Chancellor Merkel and French President Sarkozy both said that Greek Prime Minister Papandreou is committed to meeting agreed deficit-reduction targets and that they are convinced about Greece staying in the euro. Continue reading →

Risk aversion rose again in Asia, mainly on the back of weakening growth expectations, persistent worries about the Eurozone periphery and several less constructive comments by officials. Chinese Prime Minister Wen said sovereign debt problems in some countries are rising, and signaled that developed nations should cut deficits and create jobs, rather than relying on China to bail out the world economy. Continue reading →

Risk sentiment was stable in Asia after a Financial Times report indicating that China may be considering purchases of Italian debt triggered some position squaring, helping markets stabilize. Most Asian stock markets indices are trading in the black, with the Nikkei up by 0.5%. S&P futures are trading 0.3% higher. EURUSD traded 1.3689-1.3621 and USDJPY 77.25-76.99. Continue reading →

The euro continued its slide as Asian markets opened on a very weak footing. Major equity indices are trading weaker as fears of further escalation in the Eurozone crisis increased. German media reported over the weekend that the Finance Ministry was already looking at contingencies in the event of a Greece downgrade, while the Economics Minister of Germany also warned that talk of Greece default should not be considered taboo. Continue reading →

Risk sentiment was stable in Asia with most stock market indices trading broadly flat. EURUSD traded at 1.3883-1.3937 and USDJPY at 77.43-77.59. Continue reading →

Risk sentiment was unstable in Asia, mainly on the back of weaker Australian labour data and uncertainty ahead of today’s central bank meetings and speeches by President Obama and Fed Chairman Bernanke. Against market expectations, employment in Australia dropped in August, driving the unemployment rate to 5.3%. At the time of writing the Nikkei was broadly flat and the Hand Seng Index was trading lower by 1.0%. EURUSD traded 1.4050-1.4098 and USDJPY 77.22-77.42. Continue reading →

In the absence of any major news risk sentiment was more stable in Asia. Investors still seem to evaluate implications of the SNB’s decision to introduce a price floor in EURCHF. Although the SNB’s decision must be respected such a move should be temporary in nature as the SNB still has to stick to its mandate which is to ensure price stability. Continue reading →