http://www.fxstreet.com/fundamental/market-view/thoughts-on-the-global-economy-and-markets/http://www.fxstreet.com/fundamental/http://mediaserver.fxstreet.com/images/fxstreet-provider-logo1-en.gif7http://www.fxstreet.com/fundamental/market-view/thoughts-on-the-global-economy-and-markets/2012-02-10.htmlGreek politicians finally agreed on further austerity cuts totalling EUR 3.3 billion in order to secure a second bailout package. European official discussions now centre on the details of the bail out package, targeting a cut in Greece’s debt to GDP ratio to 120%. However, the fact European Finance Ministers have withheld more funds for Greece until the austerity measures begin to be implemented suggests further uncertainty on the horizon. A Greek parliamentary vote set to begin this weekendFri, 10 Feb 2012 09:14:26 GMThttp://www.fxstreet.com/fundamental/market-view/info@econometer.org (Econometer.org)http://www.fxstreet.com/fundamental/market-view/thoughts-on-the-global-economy-and-markets/2012-02-10.htmlhttp://www.fxstreet.com/fundamental/market-view/thoughts-on-the-global-economy-and-markets/2012-02-09.htmlMarkets remain in limbo ahead of a potential Greek debt deal although US equities managed to eek out small gains overnight. Stocks in the US have entered a bull market helped by the dovish stance of major central banks. The Federal Reserve’s commitment to maintain accommodative policy until the end of 2014 and the European Central Bank’s (ECB)3 year LTRO have been drivers of the rally in risk assets. The BoE will contribute to the easy stance of central banks, with an increase in UKThu, 09 Feb 2012 09:37:41 GMThttp://www.fxstreet.com/fundamental/market-view/info@econometer.org (Econometer.org)http://www.fxstreet.com/fundamental/market-view/thoughts-on-the-global-economy-and-markets/2012-02-09.htmlhttp://www.fxstreet.com/fundamental/market-view/thoughts-on-the-global-economy-and-markets/2012-02-08.htmlThe USD has taken a steady path of recent days, with little move in either direction, reflecting the general malaise in currency markets waiting for an outcome to the Greek debt talks. However, hopes that an agreement will be announced shortly saw the USD lurch lower overnight. The conflicting forces of firming US economic data on the one hand and uncertainties in Greece on the other have left market participants in a bind. The USD has at least purchased some solace from reduced expectationsWed, 08 Feb 2012 09:28:23 GMThttp://www.fxstreet.com/fundamental/market-view/info@econometer.org (Econometer.org)http://www.fxstreet.com/fundamental/market-view/thoughts-on-the-global-economy-and-markets/2012-02-08.htmlhttp://www.fxstreet.com/fundamental/market-view/thoughts-on-the-global-economy-and-markets/2012-02-07.htmlAll eyes remain focussed on Greek developments today as the country vacillates towards acceptance of further austerity measures in order to gain the Troika’s (EU, IMF, ECB) approval for a second bailout for the country. The stakes are high with a potential disorderly default and Eurozone exit on the cards should no agreement be reached. Against this background market nervousness is intensifying as reflected in the slippage in global equity markets and drop in risk assets in general overnight.Tue, 07 Feb 2012 09:21:21 GMThttp://www.fxstreet.com/fundamental/market-view/info@econometer.org (Econometer.org)http://www.fxstreet.com/fundamental/market-view/thoughts-on-the-global-economy-and-markets/2012-02-07.htmlhttp://www.fxstreet.com/fundamental/market-view/thoughts-on-the-global-economy-and-markets/2012-02-06.htmlThe USD is in a lose-lose situation courtesy of the Federal Reserve’s ultra easy stance. Positive economic data releases have been met with USD selling pressure as the data helps to fuel a rally in risk appetite. Although the USD benefited from the better than expected US January jobs report gains will prove fleeting as it is does not change expectations of more Fed quantitative easing (note the drop in the participation rate). Following the jobs report, there is little on the data front overMon, 06 Feb 2012 10:32:23 GMThttp://www.fxstreet.com/fundamental/market-view/info@econometer.org (Econometer.org)http://www.fxstreet.com/fundamental/market-view/thoughts-on-the-global-economy-and-markets/2012-02-06.htmlhttp://www.fxstreet.com/fundamental/market-view/thoughts-on-the-global-economy-and-markets/2012-02-02.htmlThe first month of 2012 passed rather more positively than anticipated and clearly was a good month for risky assets. Even the beleaguered EUR strengthened despite calls for an extended decline. Assets that were most heavily sold over 2011 were the biggest winners over January. Further signs of improvement in US economic data, receding fears of a China growth crash and even signs of tentative progress in the Eurozone debt crisis mean that sentiment may have finally turned a corner. This hasThu, 02 Feb 2012 09:13:27 GMThttp://www.fxstreet.com/fundamental/market-view/info@econometer.org (Econometer.org)http://www.fxstreet.com/fundamental/market-view/thoughts-on-the-global-economy-and-markets/2012-02-02.htmlhttp://www.fxstreet.com/fundamental/market-view/thoughts-on-the-global-economy-and-markets/2012-01-31.htmlThere has been good and bad news in Europe, with leaders’ rubber stamping the permanent bailout mechanism (ESM) and 25 out of 27 EU countries agreeing on the fiscal discipline treaty. Finally, EU leaders agreed that it was not all about austerity, with growth orientated policies as yet undefined, also required. The bad news is that there has still been no final agreement on Greek debt restructuring and in turn a second Greek aid package said to total around EUR 130 billion while Portugal isTue, 31 Jan 2012 09:18:22 GMThttp://www.fxstreet.com/fundamental/market-view/info@econometer.org (Econometer.org)http://www.fxstreet.com/fundamental/market-view/thoughts-on-the-global-economy-and-markets/2012-01-31.htmlhttp://www.fxstreet.com/fundamental/market-view/thoughts-on-the-global-economy-and-markets/2012-01-30.v02.htmlHopes of progress on the Eurozone debt crisis and encouraging data in the US have helped boost market confidence. However, the slightly disappointing US Q4 GDP report (2.8% Qoq annualised growth) revealed the markets continued vulnerability while Fitch’s downgrade of six Eurozone countries’ sovereign ratings brought a dose of reality back to the region. Nonetheless, the Eurozone Central Bank (ECB) unlimited 3-year loans to banks and Fed hints at quantitative easing (QE3) have provided marketsMon, 30 Jan 2012 10:48:18 GMThttp://www.fxstreet.com/fundamental/market-view/info@econometer.org (Econometer.org)http://www.fxstreet.com/fundamental/market-view/thoughts-on-the-global-economy-and-markets/2012-01-30.v02.htmlhttp://www.fxstreet.com/fundamental/market-view/thoughts-on-the-global-economy-and-markets/2012-01-30.htmlSince I wrote “Beware of EUR short covering” EUR/USD has gained around 4%. EUR/USD is trying to gain a foothold above 1.3200 but failed overnight. Further gains will be more gradual. Helping the EUR is the fact that short positions hit an all time high according to IMM data for last week. However, data releases are unlikely to provide much impetus to the EUR, with most attention on the monthly series of PMI manufacturing confidence indices as consumer confidence readings. At best the data willMon, 30 Jan 2012 10:42:53 GMThttp://www.fxstreet.com/fundamental/market-view/info@econometer.org (Econometer.org)http://www.fxstreet.com/fundamental/market-view/thoughts-on-the-global-economy-and-markets/2012-01-30.htmlhttp://www.fxstreet.com/fundamental/market-view/thoughts-on-the-global-economy-and-markets/2012-01-26.htmlThe USD was already losing ground over the last couple of weeks against the background of firming risk appetite but the currency was dealt another blow from the Fed when it announced in the FOMC statement new guidance for monetary policy, stating that interest rates would remain “exceptionally low until at least late 2014” while keeping the door open to further quantitative easing. The statement helped to counter the pressure on the EUR from rising Portuguese bond yields, with EUR/USD breakingThu, 26 Jan 2012 10:26:42 GMThttp://www.fxstreet.com/fundamental/market-view/info@econometer.org (Econometer.org)http://www.fxstreet.com/fundamental/market-view/thoughts-on-the-global-economy-and-markets/2012-01-26.htmlhttp://www.fxstreet.com/fundamental/market-view/thoughts-on-the-global-economy-and-markets/2012-01-20.htmlEquity flows to Asia have begun the year in solid form. Although not quite as strong as in 2010 the pace of recent acceleration in flows has been more rapid, suggesting that it will soon overtake the year to date inflows seen over 2010. In total Asia has registered around $4.955 billion in foreign equity inflows. Korea has received the biggest inflows at $2.4 billion followed by India $1.04bn and Taiwan $1.03 billion. The Indian rupee (INR) has been a clear beneficiary of such flows while theFri, 20 Jan 2012 10:00:30 GMThttp://www.fxstreet.com/fundamental/market-view/info@econometer.org (Econometer.org)http://www.fxstreet.com/fundamental/market-view/thoughts-on-the-global-economy-and-markets/2012-01-20.htmlhttp://www.fxstreet.com/fundamental/market-view/thoughts-on-the-global-economy-and-markets/2012-01-19.htmlRisk assets have registered a good start to the year despite ongoing tensions in the Eurozone. US stocks rose overnight, with the S&P 500 extending its rally to 4% year to date. Evidence that markets are becoming increasingly resilient to bad news emerged from the muted reaction to sharp downgrades in growth forecasts by the World Bank, with the world economy expected to grow by 2.5% this year compared to a June forecast of 3.6%. US markets also reacted positively to news that the US NAHBThu, 19 Jan 2012 09:28:15 GMThttp://www.fxstreet.com/fundamental/market-view/info@econometer.org (Econometer.org)http://www.fxstreet.com/fundamental/market-view/thoughts-on-the-global-economy-and-markets/2012-01-19.htmlhttp://www.fxstreet.com/fundamental/market-view/thoughts-on-the-global-economy-and-markets/2012-01-16.htmlSeveral pieces of bad news soured sentiment at the end of last week undoing much of the good news since the beginning of the year and dashing hopes of a relatively swift resolution to Eurozone’s ills. S&P ratings agency downgraded nine Eurozone countries’ credit ratings leaving 14 on negative outlook. In particular France and Austria, which lost their triple AAA status while not particularly surprising, comes as a major blow to efforts to resolve the crisis. The downgrade puts at risk theMon, 16 Jan 2012 10:39:50 GMThttp://www.fxstreet.com/fundamental/market-view/info@econometer.org (Econometer.org)http://www.fxstreet.com/fundamental/market-view/thoughts-on-the-global-economy-and-markets/2012-01-16.htmlhttp://www.fxstreet.com/fundamental/market-view/thoughts-on-the-global-economy-and-markets/2012-01-11.htmlEurope has plenty of events to focus on over the next couple of days including the European Central Bank (ECB) Council meeting, and debt auctions in Spain and Italy. While I am by no means a EUR bull the risk is skewed towards some short term recovery or at least stabilization around EUR/USD 1.28. The speculative market is extremely short EUR while policy makers, specifically German Chancellor Merkel and French President Sarkozy are making the right noises. it appears to have finally dawned onWed, 11 Jan 2012 09:05:07 GMThttp://www.fxstreet.com/fundamental/market-view/info@econometer.org (Econometer.org)http://www.fxstreet.com/fundamental/market-view/thoughts-on-the-global-economy-and-markets/2012-01-11.htmlhttp://www.fxstreet.com/fundamental/market-view/thoughts-on-the-global-economy-and-markets/2012-01-09.htmlThe EUR looks set to plumb lower over coming weeks but how quickly will it fall given that market positioning is already at record low levels? The absence of official investors such as central banks who are normally strong buyers of EUR on dips, helped to pull the rug from under the EUR, resulting in a fairly sharp lunge lower. While it is easy to jump on the bandwagon expecting a further sharp fall this week, it may be worth taking some caution given the extent of short market positioning.Mon, 09 Jan 2012 10:52:21 GMThttp://www.fxstreet.com/fundamental/market-view/info@econometer.org (Econometer.org)http://www.fxstreet.com/fundamental/market-view/thoughts-on-the-global-economy-and-markets/2012-01-09.htmlhttp://www.fxstreet.com/fundamental/market-view/thoughts-on-the-global-economy-and-markets/2012-01-06.htmlThe USD was spurred by stronger US data and a further deterioration in EUR sentiment. The data including an improvement in consumer confidence and in particular a strong (+325k) ADP private sector jobs report, support the case for medium term USD outperformance amid growing evidence of relatively superior US growth. While having a limited impact on interest rate expectations due to the Fed’s commitment to maintain very accommodative policy and thus also limiting the scope of USD gains, theFri, 06 Jan 2012 08:46:37 GMThttp://www.fxstreet.com/fundamental/market-view/info@econometer.org (Econometer.org)http://www.fxstreet.com/fundamental/market-view/thoughts-on-the-global-economy-and-markets/2012-01-06.htmlhttp://www.fxstreet.com/fundamental/market-view/thoughts-on-the-global-economy-and-markets/2012-01-05.htmlThe USD has so far failed to build on the strong momentum seen at the end of last year. Its early days yet however, and given the ongoing tensions in the Eurozone the USD is hardly likely to lose much ground in the weeks ahead. US data continues to impress relative to elsewhere as revealed in the December ISM manufacturing survey data and overnight news that sales at auto makers and retailers were firmer in December. This economic outperformance may however, feed into a tone of improved riskThu, 05 Jan 2012 09:18:06 GMThttp://www.fxstreet.com/fundamental/market-view/info@econometer.org (Econometer.org)http://www.fxstreet.com/fundamental/market-view/thoughts-on-the-global-economy-and-markets/2012-01-05.htmlhttp://www.fxstreet.com/fundamental/market-view/thoughts-on-the-global-economy-and-markets/2012-01-03.htmlEquity markets in Europe began the year in positive mood, with gains led by the German DAX index following the release of firmer than expected readings for Eurozone purchasing managers indices (PMI). Chinese data which showed an increase in its PMI also helped to boost sentiment. The Eurozone data however, remained at a weak level, contracting for a fifth month in a row, and still consistent with Eurozone recession. It seems unlikely that equity gains will be sustained over the rest of thisTue, 03 Jan 2012 08:56:33 GMThttp://www.fxstreet.com/fundamental/market-view/info@econometer.org (Econometer.org)http://www.fxstreet.com/fundamental/market-view/thoughts-on-the-global-economy-and-markets/2012-01-03.htmlhttp://www.fxstreet.com/fundamental/market-view/thoughts-on-the-global-economy-and-markets/2011-12-16.htmlThe USD index is set for another positive year over 2012 but it will not be a star performer. The USD has been a clear beneficiary of the crisis in the eurozone and will continue to find sustenance unless there are signs of a concrete resolution on the horizon. My forecasts still see the USD index rising to 82.5 by the end of 2012. This would be well below the highs reached during the height of the financial crisis in March 2009 around 89. While economic recovery is expected to continue overFri, 16 Dec 2011 08:39:51 GMThttp://www.fxstreet.com/fundamental/market-view/info@econometer.org (Econometer.org)http://www.fxstreet.com/fundamental/market-view/thoughts-on-the-global-economy-and-markets/2011-12-16.htmlhttp://www.fxstreet.com/fundamental/market-view/thoughts-on-the-global-economy-and-markets/2011-12-13.htmlJust as I thought that attention may finally switch to the US along comes the ratings agencies to spoil the party once again. Moody’s and Fitch Ratings criticised last week’s European Union Summit outcome for falling short of a comprehensive solution to Eurozone ills. Consequently the risk of further sovereign credit downgrades across Europe remains high over coming weeks especially as economic growth weakens. Moody’s also put 8 Spanish banks and two bank holding companies on review for aTue, 13 Dec 2011 08:39:35 GMThttp://www.fxstreet.com/fundamental/market-view/info@econometer.org (Econometer.org)http://www.fxstreet.com/fundamental/market-view/thoughts-on-the-global-economy-and-markets/2011-12-13.htmlhttp://www.fxstreet.com/fundamental/market-view/thoughts-on-the-global-economy-and-markets/2011-12-12.htmlThe “partial solution” delivered by European Union (EU) leaders last week has failed to match the high hopes ahead of the EU Summit. Nonetheless, the deliverance of a “fiscal compact”, acceleration of the European Stability Mechanism (ESM) to July 2012 , no forced private sector participation in debt restructuring (outside Greece), and possible boost to the International Monetary Fund (IMF) of up to EUR 200 billion, are steps in the right direction. The fact that UK Prime Minister CameronMon, 12 Dec 2011 07:47:21 GMThttp://www.fxstreet.com/fundamental/market-view/info@econometer.org (Econometer.org)http://www.fxstreet.com/fundamental/market-view/thoughts-on-the-global-economy-and-markets/2011-12-12.htmlhttp://www.fxstreet.com/fundamental/market-view/thoughts-on-the-global-economy-and-markets/2011-12-08.htmlEUR looks range bound ahead of key events including the European Central Bank (ECB) meeting, European Union Summit and release of bank stress test results. A senior German official poured cold water over expectations of a concrete outcome from the EU Summit, dampening EUR sentiment as a result. There will be plenty of attention on the ECB to determine whether they will give a little more ground and provide further assistance to the Eurozone periphery. While a refi policy rate cut is highlyThu, 08 Dec 2011 09:19:37 GMThttp://www.fxstreet.com/fundamental/market-view/info@econometer.org (Econometer.org)http://www.fxstreet.com/fundamental/market-view/thoughts-on-the-global-economy-and-markets/2011-12-08.htmlhttp://www.fxstreet.com/fundamental/market-view/thoughts-on-the-global-economy-and-markets/2011-12-07.htmlFollowing the knock to the EUR from the S&P ratings news on Eurozone countries yesterday the currency has managed to regain a semblance of stability ahead of the European Union Summit beginning tomorrow. Expectations that the Franco-German deal announced late Monday (Fiscal compact etc) will be rubber stamped at the summit are high and the warning shot by S&P suggests that the stakes are even higher should there be no further progress this week. Aside from putting the ratings of 15Wed, 07 Dec 2011 09:35:47 GMThttp://www.fxstreet.com/fundamental/market-view/info@econometer.org (Econometer.org)http://www.fxstreet.com/fundamental/market-view/thoughts-on-the-global-economy-and-markets/2011-12-07.htmlhttp://www.fxstreet.com/fundamental/market-view/thoughts-on-the-global-economy-and-markets/2011-12-01.htmlCo-ordinated central bank action led by the Federal Reserve to lower the rate on USD liquidity by 50bps was accompanied by a cut in China’s reserve requirements and an easing by Brazil of its benchmark Selic rate. Unsurprisingly risk assets have rallied strongly overnight but once the announcement effect wares off the reality that the underlying tensions in the Eurozone remain in place will see any boost to sentiment wane. The move by the Fed will be a boon to the banking sector but shouldThu, 01 Dec 2011 09:12:43 GMThttp://www.fxstreet.com/fundamental/market-view/info@econometer.org (Econometer.org)http://www.fxstreet.com/fundamental/market-view/thoughts-on-the-global-economy-and-markets/2011-12-01.htmlhttp://www.fxstreet.com/fundamental/market-view/thoughts-on-the-global-economy-and-markets/2011-11-29.htmlThe USD will have found the news that Fitch Ratings lowered its outlook on the US AAA long term ratings to negative unwelcome. Nonetheless, USD sentiment has been recently as reflected in the jump in CFTC IMM USD positioning to multi week highs. The USD will however, face some headwinds from speculation that the Federal Reserve is about to embark on a fresh round of quantitative easing by purchasing mortgage backed securities. The firm start to the week in terms of risk appetite helped the EURTue, 29 Nov 2011 09:02:00 GMThttp://www.fxstreet.com/fundamental/market-view/info@econometer.org (Econometer.org)http://www.fxstreet.com/fundamental/market-view/thoughts-on-the-global-economy-and-markets/2011-11-29.htmlhttp://www.fxstreet.com/fundamental/market-view/thoughts-on-the-global-economy-and-markets/2011-11-28.htmlFollowing a week in which risk aversion increased further and equity markets fell sharply the start of this week looks a little steadier. Reports in the Italian press that the International Monetary Fund (IMF) is readying a EUR 600 billion loan for Italy in the event of a worsening in the debt crisis may help to support markets as the week kicks off. Moreover a report in the German press that German Chancellor Merkel and French President Sarkozy are preparing a fast track “Stability Pact” forMon, 28 Nov 2011 09:34:57 GMThttp://www.fxstreet.com/fundamental/market-view/info@econometer.org (Econometer.org)http://www.fxstreet.com/fundamental/market-view/thoughts-on-the-global-economy-and-markets/2011-11-28.htmlhttp://www.fxstreet.com/fundamental/market-view/thoughts-on-the-global-economy-and-markets/2011-11-24.htmlEquity markets came off their lows overnight despite a 236 point drop in the Dow Jones, but sentiment remains extremely fragile and any let up in pressure on risk assets will prove temporary. A weak bond auction in Germany highlights the severity of contagion across Europe. If the core is being hit then there is no safe haven in Europe anymore. On a positive note it might just make German officials finally realise that they need to act quickly to provide solutions to the crisis. Weak dataThu, 24 Nov 2011 09:06:03 GMThttp://www.fxstreet.com/fundamental/market-view/info@econometer.org (Econometer.org)http://www.fxstreet.com/fundamental/market-view/thoughts-on-the-global-economy-and-markets/2011-11-24.htmlhttp://www.fxstreet.com/fundamental/market-view/thoughts-on-the-global-economy-and-markets/2011-11-22.htmlThe USD remains a clear beneficiary in the ‘risk off’ environment enveloping markets at present. Indeed as reflected in the latest jump in USD (IMM) speculative positioning the market is turning increasingly to the USD at a time of intense stress. Moreover, the run of better economic data over recent weeks including October existing home sales yesterday points to less need for further Fed quantitative easing, which comes as further relief to the USD. Further information on this front will beTue, 22 Nov 2011 09:02:33 GMThttp://www.fxstreet.com/fundamental/market-view/info@econometer.org (Econometer.org)http://www.fxstreet.com/fundamental/market-view/thoughts-on-the-global-economy-and-markets/2011-11-22.htmlhttp://www.fxstreet.com/fundamental/market-view/thoughts-on-the-global-economy-and-markets/2011-11-21.htmlThe level of uncertainty enveloping global markets has reached an extreme level. Who would have thought that close to 13 years after its introduction at a time when it has become the second largest reserve currency globally (26.7% of global reserves) as well as the second most traded currency in the world, European leaders would be openly talking about allowing countries to exit the EUR? No less an issue for currency markets is the sustainability of the USD’s role as the foremost reserveMon, 21 Nov 2011 09:47:49 GMThttp://www.fxstreet.com/fundamental/market-view/info@econometer.org (Econometer.org)http://www.fxstreet.com/fundamental/market-view/thoughts-on-the-global-economy-and-markets/2011-11-21.htmlhttp://www.fxstreet.com/fundamental/market-view/thoughts-on-the-global-economy-and-markets/2011-11-17.htmlContagion from the eurozone debt crisis is spreading quickly, threatening to turn a regional crisis into a global crisis. As highlighted by Fitch ratings further contagion would pose a risk to US banks. Consequently risk assets continue to be sold but interestingly oil prices are climbing. Taken together with comments earlier in the day from the Bank of England that failure to resolve the crisis will lead to “significant adverse effects” on the global economy, it highlights the risks of bothThu, 17 Nov 2011 09:21:58 GMThttp://www.fxstreet.com/fundamental/market-view/info@econometer.org (Econometer.org)http://www.fxstreet.com/fundamental/market-view/thoughts-on-the-global-economy-and-markets/2011-11-17.htmlhttp://www.fxstreet.com/fundamental/market-view/thoughts-on-the-global-economy-and-markets/2011-11-16.htmlEUR continues to head lower and is is destined to test support around 1.3484 versus USD where it came close overnight. Contagion in eurozone debt markets is spreading quickly, with various countries’ sovereign spreads widening to record levels against German bunds including Italy, Spain, France, Belgium and Austria. Poor T-bill auctions in Spain and Belgium, speculation of downgrades to French, Italian and Austrian debt, and a weak reading for the November German ZEW investor confidence indexWed, 16 Nov 2011 11:18:36 GMThttp://www.fxstreet.com/fundamental/market-view/info@econometer.org (Econometer.org)http://www.fxstreet.com/fundamental/market-view/thoughts-on-the-global-economy-and-markets/2011-11-16.htmlhttp://www.fxstreet.com/fundamental/market-view/thoughts-on-the-global-economy-and-markets/2011-11-15.htmlFor a change the markets may actually concentrate on data releases today rather than political events in the eurozone. The October US retail sales report and November Empire manufacturing survey are likely to paint a less negative economic picture of the US. The data will help to dampen expectations of more quantitative easing in the US but we will be able to hear more on the subject from the Fed’s Bullard and Williams in speeches today. Overnight the Fed’s Fisher poured more cold water on theTue, 15 Nov 2011 09:22:06 GMThttp://www.fxstreet.com/fundamental/market-view/info@econometer.org (Econometer.org)http://www.fxstreet.com/fundamental/market-view/thoughts-on-the-global-economy-and-markets/2011-11-15.htmlhttp://www.fxstreet.com/fundamental/market-view/thoughts-on-the-global-economy-and-markets/2011-11-14.htmlWhile the week is likely to commence in a positive mood as political uncertainties in Greece and Italy ease somewhat, there are still plenty of uncertainties that could derail risk appetite. In particular, there has been little progress on agreeing on further details on leveraging the EFSF bailout fund. Moreover, many are looking to the European Central Bank (ECB) to take up the role as lender of the last resort. Indeed, the difficulty of the EFSF debt issue last week to garner demand puts theMon, 14 Nov 2011 09:21:52 GMThttp://www.fxstreet.com/fundamental/market-view/info@econometer.org (Econometer.org)http://www.fxstreet.com/fundamental/market-view/thoughts-on-the-global-economy-and-markets/2011-11-14.htmlhttp://www.fxstreet.com/fundamental/market-view/thoughts-on-the-global-economy-and-markets/2011-11-11.htmlFortunately for the USD the situation in the eurozone has become so severe that the problems in the US are all but being ignored. Even in the US, attention on the nomination of the Republican presidential candidate has over shadowed the looming deadline for an agreement on medium term deficit reduction measures. The Joint Select Committee on deficit reduction is due to submit a report to Congress by November 23 and a final package would be voted on by December 23. A lack of agreement wouldFri, 11 Nov 2011 08:09:31 GMThttp://www.fxstreet.com/fundamental/market-view/info@econometer.org (Econometer.org)http://www.fxstreet.com/fundamental/market-view/thoughts-on-the-global-economy-and-markets/2011-11-11.htmlhttp://www.fxstreet.com/fundamental/market-view/thoughts-on-the-global-economy-and-markets/2011-11-10.htmlItaly looks too big to rescue yet is too big to fail. The country has around EUR 1.9 trillion in public debt (around 5 times that of Greece) and is the third largest country in the eurozone. Therefore it cannot be as easily dealt with as Greece. Italy needs to raise around EUR 18 billion per month to cover its budget deficit and bond redemptions and with a continued increase in yields (hitting close to 7.5% for 10 year bonds) borrowing costs are rising sharply and fast becoming unsustainable.Thu, 10 Nov 2011 09:16:29 GMThttp://www.fxstreet.com/fundamental/market-view/info@econometer.org (Econometer.org)http://www.fxstreet.com/fundamental/market-view/thoughts-on-the-global-economy-and-markets/2011-11-10.htmlhttp://www.fxstreet.com/fundamental/market-view/thoughts-on-the-global-economy-and-markets/2011-11-07.htmlMultitude of market moving events last week led to severe gyrations in risk appetite but with no clear direction for currencies. Indeed, currency markets were whipsawed as the news flow shifted back and forth. Major events such as the European Central Bank (ECB) and US Federal Reserve meetings, and US jobs data provided plenty of volatility points for markets. This week’s US data slate is less littered with first tier data, with trade data and Michigan confidence, the highlights of the week.Mon, 07 Nov 2011 09:24:44 GMThttp://www.fxstreet.com/fundamental/market-view/info@econometer.org (Econometer.org)http://www.fxstreet.com/fundamental/market-view/thoughts-on-the-global-economy-and-markets/2011-11-07.htmlhttp://www.fxstreet.com/fundamental/market-view/thoughts-on-the-global-economy-and-markets/2011-11-03.htmlThe Federal Reserve FOMC outcome and Greece’s travails failed to dampen the recovery in risk appetite overnight. The Fed highlighted downside risks to growth and revised lower its forecasts. However, positively for risk appetite the Fed left open further policy easing options, hinting at more quantitative easing if needed. Meanwhile European leaders tightened the noose around Greece by cutting off EUR 8 billion in aid payments and threatening to cut of all aid if the country’s referendum nowThu, 03 Nov 2011 09:03:39 GMThttp://www.fxstreet.com/fundamental/market-view/info@econometer.org (Econometer.org)http://www.fxstreet.com/fundamental/market-view/thoughts-on-the-global-economy-and-markets/2011-11-03.htmlhttp://www.fxstreet.com/fundamental/market-view/thoughts-on-the-global-economy-and-markets/2011-11-02.htmlHaving already retraced around 50% of its losses from its high around 4 April to its low on 27 October the USD index is on a firm footing and looks set to extend gains. The USD is benefitting both from the EUR’s woes and receding expectations of more US quantitative easing in the wake of less negative US data releases. Whether the USD is able to build on its gains will depend on the outcome of the Fed FOMC meeting, accompanying statement and press conference today. While there have been someWed, 02 Nov 2011 09:00:10 GMThttp://www.fxstreet.com/fundamental/market-view/info@econometer.org (Econometer.org)http://www.fxstreet.com/fundamental/market-view/thoughts-on-the-global-economy-and-markets/2011-11-02.htmlhttp://www.fxstreet.com/fundamental/market-view/thoughts-on-the-global-economy-and-markets/2011-11-01.htmlRisk aversion has come back in full force, with various concerns weighing on markets. Once again attention is firmly fixed on the eurozone and worryingly last week’s European Union (EU) rescue agreement has failed to prevent a further widening in eurozone peripheral bond spreads. This will come as a blow to eurozone officials as the agreement was aimed to prevent exactly this. A lack of detail in the plans announced last week has come back to haunt markets. Moreover, given the event risk of theTue, 01 Nov 2011 09:13:37 GMThttp://www.fxstreet.com/fundamental/market-view/info@econometer.org (Econometer.org)http://www.fxstreet.com/fundamental/market-view/thoughts-on-the-global-economy-and-markets/2011-11-01.htmlhttp://www.fxstreet.com/fundamental/market-view/thoughts-on-the-global-economy-and-markets/2011-10-31.htmlThe euphoria emanating from last week’s eurozone agreement will likely fade into this week as renewed doubts creep in. Details of how the EFSF bailout fund will be leveraged or how the special purpose vehicle will be utilised have yet to emerge while the firewall to protect countries such as Italy and Spain may still be insufficient given that the use of the European Central Bank (ECB) to provide unlimited support has been ruled out. With more questions than answers markets will be hungry forMon, 31 Oct 2011 08:58:26 GMThttp://www.fxstreet.com/fundamental/market-view/info@econometer.org (Econometer.org)http://www.fxstreet.com/fundamental/market-view/thoughts-on-the-global-economy-and-markets/2011-10-31.html