Get Markets Right

Below you will find my weekly view on the very challenging financial markets.

The week has been extremly busy and then I caused some technical problems – all in all it gave some days delay with I apologise for. Probably also causing some text problems this week, not always so easy J

Read more about all the interesting happenings in the financial markets in the 4 entries here below. I hope you find it interesting to read my private view about the consequences for the stock markets, currencies, China and what to expect from the central banks.

The 4 entries from today are:

Currency markets – The Greenback is the key again

Equities – Realistic risk conversations would help the market.

China – Wen…

Currency markets – Escaping everything.

Non major currencies

This week I start with a thought in general regarding a couple of non major currencies. The very significant

drop in some currencies like Swedish Crowns or Polish Zlothy now leads to growing sign of goods arbitrage.

It now pays of for private household to spend time and transportation costs to shop in these countries. If you

remember back when the ERM blew up in the 90’s and the Italian Lira dropped like a stone, we had the same

picture with private households importing everything from Italy.

Currencies like SEK and PLN might be able to drop another 10%, but it starts to seem excessive. Should it

be excessive, then the only two short term ways to compensate will…

Below you will find my weekly view on the very challenging financial markets.

Read more about all the interesting happenings in the financial markets in the 4 entries here below. I hope you find it interesting to read my private view about the consequences for the stock markets, currencies, China and what to expect from the central banks.

The 4 entries from today are:

Currency markets – The Greenback is the key again

Equities – Realistic risk conversations would help the market.

China – Wen thinks its ok, or does he?

Central bank rates – they give it another try at ECB……

Currency markets – The Greenback is the key again

EUR/USD (1,2600): Today (Monday) the Dollar index reached it’s 3 years high. It corresponds extreme well with the trading pattern during the large equity sell off in October/November last year. Partly flight to quality and some hot money from China find their way to the greenback, but as the stock markets are setting new lows, investors are also forced to exit hedge funds. Hedge funds primarily are USD based so they need USD cash to pay out.

As mentioned the last couple of weeks, one would expect the Central- and Eastern European crisis to hit the Euro. That is still a risk (or opportunity) and this risk might even grow during the…

Currency markets – Event risks are rising

EUR/USD (1,2800): The very serious risks are now getting more clear for market participants. The discussion about the survival of the Euro that I touched briefly last week will grow. But the discussion itself will not lead to the Euro blow up, that will economic realities take care of later on.

2 event-like situations will soon take very much attention, they are working in opposite directions so it’s important to judge the timing. The implications of the Central and Eastern European severe economic downturn, and their totally foreign debt overloaded private sectors becomes reality this year.

The other risk I have mentioned a couple of times, is the appetite for US Treasuries, or more…

Currency markets – Getting more interesting again.

EUR/USD (1,3040): EUR/USD stayed fine within the range last week and I suggest another week with range trading in EUR/USD, though slightly upwards adjusted. Regardless of range trading this week, then the currency market is getting more interesting.

Capital flows still dominate the swings, but with big fundamental happenings like the US unemployment data last Friday and growing concern about the Euro’s survival new trends will start (when the markets decides which is the biggest risk – mid term it’s still the upside in EUR/USD that I bet on).

The survival of the Euro I will save for a “Hot Topic” comment when time is right. In the meantime, in this weeks edition of The…

Currency markets – A bagful of mixed sweets this week.

EUR/USD (1,2810): Heavy stuff weights on Euro. Some Euro Zone countries fundamentals deteriorate pretty fast now. It apparently leads to speculation among Far East market participants about an ECB rate cut in mid February, though that would be against the guidance from Mr. Trichet, so I doubt that one.

Equities has changed the sentiment again which already sent EUR/JPY somewhat lower, taking EUR/USD down as well. This pressure will continue during the week.

Last week I thought 1,3450 would be the top but it turned out to be 1,3350. This week it feels that the top and range will be even lower trading at 1,2650 – 1,3250. Long term the Greenback will come…

Below you will find my weekly view on the very challenging financial markets.

Read more about all the interesting happenings in the financial markets in the 4 entries here below. I hope you find it interesting to read my private view about the consequences for the stock markets, currencies, China and what to expect from the central banks.

The 4 entries from today are:

Currency markets – Capital flows are gaining in importance again……

Equities – Is the earning season also a hurricane season ?

China – the credit growth in December a true credit growth ?

Central bank rates – Still pointing lower……….

Currency markets – Capital flows are gaining in importance again……

EUR/USD (1,3140): With the currency market being dominated by capital flows, and in particular swings in stock markets, then my fundamental USD bearish view suffers again.

When I am right on the stock markets (down) then EUR/JPY and EUR/CHF also follows lower and the greenback is bid (I am watching the hedge funds again, it all feels like September to November last year).

With only a few fundamental data out this week its better to read the stock market comments to get a clue. They are as usual bearish so it forces me to lower the 1,3250 / 1,3750 trading range for EUR/USD down to 1,3000 / 1,3500. Due to the very steep…

Currency markets – different currencies, different factors to watch…..

EUR/USD (1,3350): The greenback is still fundamental weak, but EUR got hammered with the sudden sentiment change regarding ECB on Thursday. A 50 basis point cut is now fully priced in EUR/USD. If ECB don’t cut or choose something else than 50 basis points I think it will be negative for EUR, regardless what ECB will choose instead of 50 basis points.

I continue to argue that the market mainly reacts to fundamentals making the Dec. US retail sales on Wednesday as very important this week (exp. -1,4% ex. autos). The Dollar will correlate positive with the number.

With the FX market following fundamentals the US Beige Book Wednesday evening is a market mover…