Tag Archives: european union

Euro Stability Fund downgraded – S&P Euro Downgrades Ironic

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“Euro Stability Fund also downgraded – The Irony of S&P Euro Downgrades”

binary options editorial cartoon about the euro being downgraded as it falls down to the levels of the usd gbp and jpy

how's your daring stunt going?

2012 January 17 (New York) European leaders have another blow as the solution to their woes the EFSF or the Bailout Fund has been downgraded by S&P from AAA to AA+. S&P has now removed its credit watch negative status after this downgrade.

A fund that was designed to give a solution to Euro troubles by guarantees of those supporting countries meant it earned the status of AAA in the face of the S&P downgrades on France and Austria it can no longer have the AAA status. Statements from the facilities CEO Klaus Regling indicate it shouldn’t hamper the €440bn funds ability to operate.

Analysts note that this continues to keep markets focused to the fact that there are still risks concerning the European Sovereign debt crisis. S&P also noted that EFSF could use “credit-enhancement options” to offset its current creditworthiness and that would mean the fund is eligible to be upgraded to AAA again. The EUR has bounced from its recent lows trading at 1.2747 +0.0081 or +0.7%.

 

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Disclaimer: The opinions expressed in this article are not necessarily those of OptionsClick, blog.optionsclick.com, OptionsClick.com or any of its staff. The contents of this article are in no way intended to be advice or any other form of counsel for any trader of binary options or any other investor. Please be advised: Investing of any kind always carries a relative risk. As with any market trading, it is always possible to lose your investment. Always be sure to do your own research, seek professional advice, and make your own, well-educated decisions when it comes to financial investments.

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EUR Makes Gains Ahead of French/German Meeting

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illustration of the euro debt crisis negotiations options

what option would you choose to fix the euro debt crisis?

2012 January 9 (New York) The much maligned Euro ended the Asian trading session in a rally ahead of today’s meeting between French President Sarkozy and German Chancellor Merkel. The meeting between the powerhouses of the Eurozone is the first meeting of 2012 and hot on the agenda will be the potential credit downgrade of France from its triple A rating as well as the usual talk of stemming the spread of the debt crisis and the implementation of tighter fiscal control amongst the 17 member states of the troubled Eurozone.

Despite a raft of positive data emanating from the US, most notably the 200,000 new jobs created in December; investors are ignoring the USD as a safe haven currency and showing support for the EUR, despite recent worse-than-expected Bond auctions last week in France, Italy and even Germany, who experienced weaker demand for their 10 year bonds, even though manufacturing PMI was up and unemployment stood at the lowest level for 20 years.

The tensions in Iran continue and with eased support in the USD, coupled with the threat of closure in the Straits of Hormuz, which accounts for 33% of all oceans –bound transportation of the world’s oil supply, Crude Oil opened European trading up 0.33% trading at 101.90 a barrel after making heavy falls in Asian trading as the global debt crisis and reduced economic activity in the future translated to reduced demand for oil,

The EUR was up against nearly all majors, registering a 0.23% increase against the USD, trading at $1.27470 and up against the other safe haven currency; the Japanese Yen – up 0.15% trading at 98.0500. However, the gains can be attributed to investor profit taking far more than as a result of the fundamentals and it is quite likely we will see much intraday volatility as investors wait for news to come from Europe whilst cashing in on recent USD gains.

 

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Disclaimer: The opinions expressed in this article are not necessarily those of OptionsClick, blog.optionsclick.com, OptionsClick.com or any of its staff. The contents of this article are in no way intended to be advice or any other form of counsel for any trader of binary options or any other investor. Please be advised: Investing of any kind always carries a relative risk. As with any market trading, it is always possible to lose your investment. Always be sure to do your own research, seek professional advice, and make your own, well-educated decisions when it comes to financial investments.

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Europe – what the credit markets are really saying

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2011 January 9 (New York) You could get confused if you looked at the equity markets with most Indices testing their upside resistance levels. Let’s consider the cash market of the DAX which is consolidating at the 6000 level its close on Friday 6057.92 resistance at 6170 followed by 6430 and the S&P500 looking as if it will retest  October 2010 highs of 1292 (Fridays cash close 1277.81).  If you want a more holistic approach to the markets  you may well find the crisis in Europe is far from over and to Quote  William Shakespeare’s ‘As You Like It’ : “All the World is a stage, and all the men and women merely players: They have their exits and their entrances…” in our case we have our entrances first and then our exits or stops but enough of the jokes let’s look at some of the deeper internals of what’s going on in the credit markets in Europe.

binary options traders have a lot to keep up on with news out of Europe these days

What does your EUR investment strategy look like?

First let’s focus on deposits held at the ECB overnight facility, they are at record highs this is what some consider to be the biggest alarm bell it means Banks are hoarding cash and won’t lend it in the interbank market. The system remains in effect because the central banks are flooding the markets with liquidity.

Secondly, the forex futures have seen the CFTC report record short position in EURUSD currency futures and even more so what is the cash short! This is scary as the heard is short! The “but” is that at some point the EUR breaks in its current form. Can kicking can only going on for so long. Think back to when we saw the previous record short position if memory serves me that was about the time when the famous Hedge Fund Manager Jim Rodgers stood up and took the long EUR position at or near the 1.1877 lows at the time when everyone was cheering the death of the EUR or at least parity to the USD. In my 15 years in the markets I must say that was one hell of a call Jim. Can we see a short covers rally from this – caution is needed in the near term on EUR/USD positions.

Last couple of points for today is that the 5 year Western Europe Sovereign Debt Credit Default Swap Index closed on Friday at 382.50bps nearing the November 2011 record highs of 386.50 for this Index. US TED Spread (measure of credit risk in the banking system) closed at 57.64bps on Friday which is also suggesting credit risk is rising and lastly 3-Month Euribor/OIS Spread is at 93.6bps just off recent highs and at highest levels since 2009. These are some of the credit market internals that suggest Europe is by no means over and that maybe Equities are a little ahead of themselves in the near term. All our eyes will be on the ECB for Thursday’s Rate decision and press conference. Good Trading.

 

 

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Disclaimer: The opinions expressed in this article are not necessarily those of OptionsClick, blog.optionsclick.com, OptionsClick.com or any of its staff. The contents of this article are in no way intended to be advice or any other form of counsel for any trader of binary options or any other investor. Please be advised: Investing of any kind always carries a relative risk. As with any market trading, it is always possible to lose your investment. Always be sure to do your own research, seek professional advice, and make your own, well-educated decisions when it comes to financial investments.

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