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Tag Archives: Europe

AUD Climbs to 3 Month Highs Ahead of RBA – What to Expect

AUD Climbs to 3 Month Highs Ahead of RBA – What to Expect Daily FX Market Roundup June 1, 2020 The first day of June kicked off with broad based US dollar weakness. The greenback traded lower against all of the major currencies as equities moved higher. Americans are growing increasingly nervous about the protests in US cities but investors have been unfazed. We can’t see this optimism lasting as it is almost certain that the protests will impact investor confidence. Historically the...

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1/6/20: COVID19 and European Banking

McKinsey research note on European banks' potential losses due to COVID19 is quite on the money: With more than 1/3rd of European executives expecting "a muted recovery that would lead to sharp drops in banks’ revenue, a squeeze on their capital, and a hit on return on equity", European banks can expect revenues to drop by 40 percent plus, and ROE drop 11 percentage points in 2021.And the problems are strategic. COVID19 is actually accelerating changes in customers' demand for services....

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Can The Risk Rally Continue?

China halts some soybean buys Risk turns negative Nikkei 0.84% Dax -1.65%% UST 10Y 0.64 Oil $35/bbl Gold $1741/oz BTCUSD $9546 Asia and the EU EUR Manufacturing PMI 39.4 vs. 39.5 GBP Manufacturing PMI North America Open USD ISM Manufacturing 10:00 News that China may be halting purchases of US soybeans sent US futures lower in morning European dealing as US-China tensions appear to be the only factor that could derail the relentless rally in stocks. Over the weekend almost every major...

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June Starts with a Bang

Ironically, the pandemic and progress toward a vaccine will play second fiddle to more mundane concerns in the week ahead.  Still, investors have shown that the most strained relationship between the US and China in 30 years (Tiananmen Square) is insufficient in the first instance to derail the recovery equity markets.  Major benchmarks in the US, Europe, and Asia reached new recovery highs. European heads of state will have a difficult situation later this month when they meet to...

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No Bombshells from Trump, FX Rally in Relief

No Bombshells from Trump, FX Rally in Relief Daily FX Market Roundup May 29, 2020 All week President Trump teased the market with the possibility of big changes in the relationship between the US and Hong Kong/China but to everyone’s relief, his press conference revealed nothing exceptionally damaging. Trump said the US will be terminating its relationship with the World Health Organization, which was widely expected. There was no mention of tariffs of the phase 1 trade deal. He said...

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Heiner Flassbeck: The Euro Arrangement Is Faulty

Yves here. Regular readers of this site are likely to have encountered previous interviews with Heiner Flassbeck, one of the few German economists who has been a consistent and sound critic of Eurozone arrangements, and in particular, the role Germany had played. Readers may also recognize that Flassbeck gives a fine primer on what is called “sectoral balances,” a topic we discussed extensively during the Eurozone wobbles (start in 2010 and 2011 as well as a New York Times op ed). By Lynn...

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FX: Risk on Trades Could Lose Steam

FX: Risk on Trades Could Lose Steam Daily FX Market Roundup May 28, 2020 US equities extended their gains on Thursday on the back of better than expected economic data. Durable goods fell less than anticipated, jobless claims hovered around 2 million and the market largely shrugged off downward revision to US GDP. Currencies also rallied with euro, sterling the Australian and New Zealand dollars leading the gains. As US-China tensions heat up, we are surprised by the nonchalant...

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Euro Cracks 1.10 – Fade or Trade?

Euro Cracks 1.10 – Fade or Trade? Daily FX Market Roundup May 27, 2020 For the first time in nearly 8 weeks, EUR/USD broke through 1.10. Since Germany and France first proposed their recovery fund, we’ve been talking about a more meaningful turn in euro and have been looking for a break of this key level. Now that it happened, investors are focused on the upside but further gains should be limited ahead of the European Central Bank’s monetary policy announcement next week. Compared to...

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