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Bobbys Corner-Open Market-Oct.10.2012

Good Morning:

A fairly lackluster overnight session-with the majors showing no real activity.

Fitch Ratings commented that the US fiscal cliff, EU crisis, and a potential “hard landing” for the Chinese economy will be
a risk to the global economy.  Thanks-I think we knew that!

State Elections in India and its influence on the USD/INR Pair

The results of the mid-term state elections in India were released today to the chagrin of economic analysts around the world.  With the next national elections in India slated for some time in 2014, these state elections (as in the US midterm elections) were a prime time to show either a welling of support for the ruling party (The Congress) or a tide change towards the opposition.

RBNZ’s Official Cash Rate Announcement 2.50% vs. 2.50% Exp. (Previous 2.50%)

RBNZ Governor Dr. Alan Bollard says financial market sentiment improved slightly, inflation pressures ‘well contained.’

EUR 500bln Lending Capacity of EFSF/ESM is a Minimum According to a draft ESM Treaty

ESM board of governors may decide to raise combined ESM lending capacity, according to draft ESM Treaty.

ESM Treaty will enter into force when countries representing 90% of subscribed capital ratify it according to the draft.

Collective action clauses will be introduced in all new Euro-zone bonds one month after ESM treaty enters into force.

Euro-zone country can only apply for ESM for help if it started ratification of fiscal compact treaty.

ESM’s EUR 80bln paid-in capital is still to be paid over 5-years, but any Euro-zone country may pay it quicker.

The advantages of Forex trading

The foreign exchange market, commonly known as Forex or simply FX, is an international financial market where foreign currencies are traded with the intention of making money on the difference in exchange rates. One of the largest markets in the world, the Forex market operates 24 hours a day (excluding weekends) and defines the comparative value of currencies across the globe.

Market Meltdown!

There’s really only one story to discuss today and that is Italy. Italian bond yields are soaring and I mean soaring and the market reaction is not pretty. In a story of “be careful what you wish for”, Italian Premier Berlusconi is said to be stepping down next week but today’s crisis may actually reverse those wants and return him to power.

Since the announcement that he would step down after austerity measures were implemented, bond yields jumped to above 7% for the first time in the Euro-era. This is an unsustainable level and the uncertainty over the new Italian government is weighing heavily on the market.

Forex Market Outlook 11/3/11

Once again all eyes are on Greece this morning as we are running the gamut of Greek theater. First we saw the drama unfold during the painstaking debt crisis resolution and now we’re watching the comedy of errors that is taking place with misstep after misstep. Will we eventually see the tragedy? And whom would it end up being tragic for: the Euro zone or Greece itself.

Forex Market Outlook 11/2/11

How does one get invited to that ultra-ritzy resort town of Cannes, France? Apparently by upsetting G-20 leaders as you potentially re-neg on a deal that may be the most important economic event of the past year. Yet that’s where Greek PM Papandreou will be as he has been “summoned” to the G-20 meeting to explain what the heck is going on in Greece.

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