EU Dollar Lower on Negative Greek Announcements EU Buck Lower on Negative Greek Press releases
Stories announcements during the weekend helped put pressure on the EU Buck during the Asian session as ig index papers in Greece let slip that the Non-public Sector involvement programme (PSI) are meeting internal issues politically, which is leading the IMF to call for new debt restructuring strategies and increase in the agreed-upon loss levels that'll be shouldered by current holders of Greek bonds (potentially as high as 80 p.c in losses).
The Euro dollar was broadly lower to start the week (especially against the Japanese Yen) but the US Greenback was also being acquired after comments from Fed Reserve member Bullard who said that the Fed’s prior QE methods had been a big hit (forestalling a potentially deflationary environment), and that a 3rd round of quantitative easing will not be necessary. The US Dollar index is now at its highest levels since the third quarter of 2010.
Macro information came out of China over Saturday and Sunday, with loan applications, new home sales and money supply figures being released. Both pieces of data proved that the central bank is trying to make monetary conditions more accommodative (new Yuan loans rose to 640.5 billion for December from 562.2 bn. in Nov), which was better than the consensus guesstimate. M2 money supply increased by 13.6 p.c on a yearly basis, which is a virtually 1 p.c rise from the previous month. The larger story nonetheless , was the new home sales report, which showed clearly that housing prices in Beijing dropped a massive 60 p.c on a yearly basis. Transactional volumes were seen at their lowest levels in 10 years, so that the information shows the often-discussed “housing bubble” seen in China is coming to a close.
On balance, the weekend information was risk negative and equity markets we also dragged lower (reversing off of recent highs). Asian markets were all trading negative (with the exception of the Shanghai composite index) after the release of lower monthly retail sales finds out of Australia. The Aussie information came in unchanged (against expectancies of a 0.4 % rise) and lower than what was seen in the previous month. There's still some chance for optimism nevertheless , as this info does not reflect purchases made in the weeks leading in to Christmas.
The key story from Fri. was the US Non Farm payrolls release, which were terribly strong, coming in at a rise of 200,000 (versus 155,000 anticipated), with many of the increases coming from the private area. The unemployment rate was seen at 8.5 percent but some researchers have advised this is generally the results of declines in the participation rate. The US Greenback closed the week higher after the releases.
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