Euro on Defensive
European news today has been somewhat disappointing and this lead investors back into the dollar. The retail PMI fell below the 50 boom/bust level in Aug (49.7 vs 52.4 in July), while the EMU Sentiment Index came in at 101.8, as expected and a modest improvement over the 101.1 reading in July (was 101.3). Apparently [...]
Zew Disappoints, but Market Remains Robust
There is a change that the strong second quarter growth and export numbers from Germany (and the EMU) are just reflecting the peak in activity with regard to economic data. This was reinforced by today’s ZEW survey in Germany, which showed confidence among investors about Germany’s economic prospects falling to a lower than expected 16-month [...]
Euro Bonds, Keep Currency On Defensive
The Euro zone continues to see pressure in the bond market, which in turn is creating a defensive Euro currency. Besides Greece (+54 basis points), Ireland 10-year bonds have been the second worst performer in the periphery this past week (+31 basis points) as markets focus on the ongoing costs of recapitalizing the Irish banking [...]
Euro Short Squeeze Turns Into A Rally
The main concept within the foreign exchange market remains the pressure on the US dollar. There are several forces at work and seem to reflect both short covering and new long position. The net speculative position in CME futures remains short euros and sterling. The euro’s net short position has been cut dramatically from a [...]
MOF Purchases Increases In July
Weekly MOF (Ministry of Finance) flows show Japanese accounts significantly stepped up their foreign asset (mostly bonds) purchases. The data out today covered the last week in July. Japanese investors bought JPY1.25 trillion (~$14.5 bln) of foreign assets. This brings the total for the month to an impressive JPY5.7 trillion (~$66 bln). This follows June [...]
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