Submitted Nov 19, 2011|From forexblog.oanda.com|3 comments

Thursday’s stock market sell-off can be traced directly to a statement released by Fitch Ratings. In this statement, Fitch declared that the U.S. bank exposure to precarious European debt posed a “serious risk”. According to information gleaned from ...

Submitted Nov 18, 2011|From forexblog.oanda.com

It was a week of spreads. The failure of the ECB to wholly stabilize Italian, Spanish and French yields, despite political developments in Italy, had the market applying risk aversion trading strategies slowly all week. Most EUR relief rallies ...

Submitted Nov 18, 2011|From forexblog.oanda.com|4 comments

With little data out today, this morning’s market movement has been driven mostly by talk of ECB demand for Italian debt in the secondary market. The weeks trading decisions have been dominated by Euro yield movements and the Bund spread. If it was ...

Submitted Nov 17, 2011|From forexblog.oanda.com|4 comments

Having presented a unified front through much of the ongoing European debt crisis, the recent intervention by the European Central Bank in the sovereign bond markets has led to a major disagreement between France and Germany. In a nutshell, France ...

Submitted Nov 16, 2011|From forexblog.oanda.com|1 comment

Gold prices ($1,775) have backed off, suffering from contagion flu. The yellow metal fell just over -1% today, diligently tracking the EUR lower. All of this is on fear that the EU debt crisis is spreading and dragging France into the fray, while ...

Submitted Nov 15, 2011|From forexblog.oanda.com

Political progress in Europe has seemingly stalled. Italy’s next premier, Mario Monti, is facing resistance on forming a cabinet. Along with Greek opposition leader, Samaras, who has reportedly told his members that he would not sign a written ...

Submitted Nov 14, 2011|From forexblog.oanda.com

The CAD dollar is now trading on the back foot for the first time in three days. The reasons are multiple, justifiable and easily identifiable. Europe, commodities and risk adjustment. The political readjusting in Europe over the weekend, albeit ...

Submitted Nov 14, 2011|From forexblog.oanda.com

Easy come easy go so far. Positive weekend Euro developments certainly tried to give the EUR a lift, old resistance levels were nearly tested in the Asian session, but alas, gains were not sustainable into the “important” Italian 5-year auction. ...

Submitted Nov 12, 2011|From forexblog.oanda.com|1 comment

Analysts will tell you that Japan is a current account surplus currency. However, with global tight yield spreads, the economy finds it difficult to recycle surpluses efficiently. How are they relieving the pressure? Corporate Japan is directly ...

Submitted Nov 11, 2011|From forexblog.oanda.com

This is a big weekend in Rome, and with a partial US and Canadian holiday, it’s not surprising to see short covering taking place going into the weekend. However, this weeks trading headache may reappear as early as Monday if the ECB is missing in ...

Submitted Nov 11, 2011|From forexblog.oanda.com

Italy and Greece look as if they are slowly coming to grips with their political crises. The potential formation of two credible, technocratic governments is trying to lift the markets back to the pre-Greek referendum bombshell. The Italian senate ...

Submitted Nov 10, 2011|From forexblog.oanda.com|1 comment

CAD traders were caught red faced with Septembers trade surplus surprise print (+$1.25b), the first in eight-months. Market consensus called for a deficit of -$560m. This was achieved by a drop in imports and the strongest monthly export sales ...

Submitted Nov 10, 2011|From forexblog.oanda.com|1 comment

Italy did get their Bill’s away this morning. The ECB has been working hard in the background, aggressively buying two-years, propping the market up and digging a big enough hole to get the supply buried. Another smoke and mirrors execution ...

Submitted Nov 9, 2011|From forexblog.oanda.com

Like many 1st year university students away from home for the first time, Italy is facing the consequences of a series of poor credit decisions. While most students understand and appreciate how to manage personal debt, others find the collection of ...

Submitted Nov 9, 2011|From forexblog.oanda.com

US treasury prices remain on the front foot with yields plummeting. The middle of the US curve has fallen the most in a week on concerns that Italy will join neighboring Greece in struggling to form a strong government to implement austerity ...

Submitted Nov 9, 2011|From forexblog.oanda.com|1 comment

With the three-year part of the curve perceived to be cheap going into yesterday’s auction, it was a good bet that the first of this weeks US auctions would be well received. Treasuries prices have rallied as the three-year notes attracted the ...

Submitted Nov 9, 2011|From forexblog.oanda.com

The market is trying to forget Berlusconi, with some believing he is going nowhere, and shifted its attention to Italian yields and their Bund spread. Yields are soaring this morning with Italian 10-year product breaking through the psychological ...

Submitted Nov 8, 2011|From forexblog.oanda.com

US treasuries remain in demand as Italian Prime Minister Berlusconi faces calls to resign amid concern the country will struggle to pay its debt obligations. In the middle of the US curve, benchmarks had extended their O/N gains as Italy’s 10-year ...

Submitted Nov 4, 2011|From forexblog.oanda.com

The Treasury 10-year benchmark note is on course to complete its steepest weekly gain in three-months as European leaders struggle to contain their periphery region’s debt crisis and before last months NFP report to show hiring in the US slowed ...

Submitted Nov 3, 2011|From forexblog.oanda.com|1 comment

Right now it’s not about Greece, it’s about the ability to contain contagion into Italy and other sovereign states. How much help is the region going to get from the ECB this morning? Until now, policy makers have been fulfilling the dual role ...