Towards the Eurogroup conference call on Wednesday, reports have emerged that the finance ministers will approve extending the primary surplus targets by two years. In addition, talks between Greece and the troika have come to a positive conclusion that will enable a disbursement of the next tranche of aid Greece needs so badly in order to…
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Italy Pays Cheapest Price in 17 Months for 10 Year Bonds
Italy had a very successful bond auction: it paid an average yield of 4.92% for 10 year bonds. This is lower than the previous auction that saw 5.24% and the best since May 30th 2011, when the euro-zone’s third largest economy paid only 4.73%. EUR/USD is on the rise within the range, but is limited…
Spanish Economy Contracts, German Unemployment Rises
Another day, another dose of bad news from the euro-zone. Spain reported that its economy contracted by 0.3% in Q3, and 1.6% year over year. While this was somewhat better than -0.4% that was expected, it still is a fourth consecutive quarter of contraction, or a fifth that doesn’t see growth. Germany disappointed once again…
USD/JPY Plunges as BOJ Easing Falls Short of High Hopes
Dollar/yen took a big dive of 50 pips from nearly 80 to below 79.50 after the decision by the Bank of Japan was released. The BOJ enlarged the quantitative easing program by 11 trillion yen. Official expectations stood on 10 trillion, but expectations have risen considerably towards the event, pushing the yen higher. Read the…
Greek Talks Stuck in the Mud – EUR/USD Follows
Negotiations in Greece are going nowhere – there are significant disagreements on labor laws and there are also differences within each side. The troika refuses to make any concessions on labor laws. An unconfirmed report about PASOK joining Democratic Left in its stance against labor reforms raises worries that the government in Athens could fall.…
Germany Brings 150 Tons of Gold Home for Testing
Most of Germany’s gold reserves (3,396 tons worth around €130 billion – like Greece’s second bailout program) are held abroad, with a big portion in the Federal Reserve in New York. Germany wants a closer audit of its gold reserves, and decided to bring 150 tons of gold to Germany for melting, reforming into new…
EUR/USD Forecast Oct 29-Nov 2
EUR/USD slid in range and lost the 1.30 line once again, as the debt crisis issues saw no progress, and as Germany looks weaker. President Draghi’s speech German retail sales and a meeting of the Eurogroup are the major events this week. Here is an outlook on the market-movers ahead. Further EU weak data was…
Emergency Meeting in Athens to Tackle Big Funding Hole
It already seemed that Greece had a deal with the troika. However, after the IMF acknowledged that Greece will surely miss the debt to GDP target (as if it was a big surprise), a new funding gap of up to 30 billion euros is estimated. The IMF suggested that the euro-zone government will take a…