[Branch closed!] EURUSD - Trends, Forecasts and Consequences (Episode 4) - page 358
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2011.06.22 21:06:52 *Treasury bonds down as Bernanke made no hint of a third quantitative easing programme
Didn't say anything new and the eu/ dollar just fell into the abyss.
Traders will start to adjust their positions next week as the end of the month and the end of the quarter are approaching. In addition, the first week of July is also usually a challenging one, as market risks usually increase after the Independence Day celebration in the USA on July 4. The calendar after July 4 is not very full, but traders are waiting for indicators such as Wednesday's ADP jobs report and Friday's key NFP report. In between is Thursday's ECB rate decision (possible increase) as well as various events regarding Greece. It's going to be fun!
If the triangle pattern on the daily chart is chosen correctly, it may come out that way.
Awww... It's been published for some time now... Read my posts above... Or is no one reading my posts?
They do (especially after the opera went out and no longer load)
EURUSD: The spread between Italian or German 10-year bonds is close to the highest level since November .This is extremely dangerous. While all eyes are on Greece, there is a danger of another potential crisis. Italy is not immune to a crisis. So far the financial situation is much better than in Greece, but the high public debt to GDP ratio is just below 120%, anything above 100% is regarded as highly volatile. Credit rating agency Moody warned Italy last week that its sovereign rating could be downgraded and is facing chronic financial problems including low productivity that have undermined economic growth for decades and will continue until appropriate reforms are enacted. These constraints reduce the state's ability to take the path of debt resolution. Moody's statement was shocking "The markets' stable attitude towards Italy's ability to pay its debts at current interest rates is highly questionable"... If Italy fails to take action it could repeat the path of Greece, Portugal and Ireland .
The downgrade could come within 3 months, the time when the government must make any changes. When the spread was widened in November, EURUSD was near 1.3000 (current level is above 1.4300). Of course the spread has come back and now the situation is a bit different, we can't exactly compare it either, as the ECB has been raising interest rates since April and German bonds have been falling due to the asset movements and the secondary flare-up of the Greek crisis. But levels are still at previous highs. The future of Italy is in question and there are many reasons for this. Despite the fact that certain reforms have to be adopted in order to solve the problems, in the short term the Greek crisis is at the forefront in the coming weeks. Investors should keep an eye on Italian bond yields as the country is in a vulnerable position and could pull the euro down.
Yields on Italian 10-year bonds and German 10-year bonds (white line) andEURUSD (yellow line).
BLOOMBERG agency