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Thread: Euro zone

  1. #1
    Master Member vinayakm's Avatar

    Cool Euro zone !!!

    Alright guys, you've seen me slice and dice commodities, financial news, large cap tech stocks and the like. Now those threads have spawned this Euro area thread right here and another one I am going to create with extensive coverage on Japan, the world's third largest economy.

    I will be looking at giving not just Forex signals, but long posts that will guide BOTS readers about EU demographics, macro analysis, trading ideas, etc. I will discuss several issues facing Germany and address the rumor that doesn't seem to go away: Will Germany leave the Euro?

    With the upcoming federal election on September 22, 2013 pitting a potential CDU/CSU and FDP coalition against the SPD is going to make this an especially hot thread.

  2. #2
    Master Member vinayakm's Avatar
    The German Election

    Angela Merkel did back Nicolas Sarkozy’s re-election campaign in France, but it was the hardened socialist François Hollande that prevailed. Hollande is in a rampant socialist mission to lower the French retirement age, cut tax breaks for the wealthy, and most importantly for Germany he wants to break the recent EU fiscal requirements Germany convinced the Euro zone to agree to.

    Evidently Germany wants to keep the Euro zone together and some would argue that it is in its best interests to do so. So this upcoming election will be extremely important. The German people are not happy with bailing everyone out and Merkel will have a hard time convincing voters on her plan forward.

    We will watch the latest developments on this thread.

  3. #3
    Master Member vinayakm's Avatar
    Will Germany leave the Euro?

    A possible German exit from the Euro zone has been talked about for a long time. Let's get this discussion going by talking about how and why Germany would do this. This is just a start to a long and recurring theme on this thread.

    Highly respected economic experts have shown how a possible German exit would be beneficial for the EU powerhouse. It would definitely be a radical move accompanied by a sudden rise in its export prices, but the good thing for those vested in Germany is that the country's industries are in a strong enough position to handle high prices in the near future.

    The expensive bailout will be a worse financial issue to deal with than any harm done to German export industries. Topics like this are important because if Germany does indeed leave the Euro, then it will spark a global financial collapse that will make what happened in 2008 almost like a cartoon. In this hypothetical situation, the Deutschemark will soar and have huge demand and Germany will emerge the victor with more leverage than ever in Europe.

  4. #4
    Legendry Member Michael Hodges's Avatar
    I don't think Germany will leave, I think it more likely for Germany to impose its will across the greater EU.....

  5. #5
    Veteran Member Ammeo's Avatar
    If Germany leaves Eurozone then Eurozone is dead....the only reason eurozone is still alive today is cause of germany..

  6. #6
    Master Member vinayakm's Avatar
    During the European morning trade, Germany’s DAX 30 rallied 1.57%. Furthermore, the EURO STOXX 50 went up 1.58% and also the France’s CAC 40 surged 1.53%.

    The ECB interest rate decision and Press Conference last week seems to ensured this rally by European equities continues. Draghi may have been hawkish about the EU, but there is the big issue of US Fed's stimulus program being scaled back.

    As for the US, it seems like the major indices (S&P 500, Dow, Nasdaq 100) will open on a high according to various market analysts.

    Back in the Euro zone, Germany will release official industrial production data today as the Euro zone finance chiefs hold talks in Brussels. Draghi is expected to testify before the Economic and Monetary Affairs committee in the European Parliament at these discussions in Brussels.

  7. #7
    Legendry Member milos's Avatar
    The U.S. dollar fell against the Japanese yen amid concerns over escalating political crisis in Portugal that has fueled demand for safe investments.Market sentiment was hit because it is assumed that more Portuguese ministers to resign,after which the ministers of finance and foreign affairs of the country dramatically withdrew from office because the public opposition to austerity measures.The US dollar strengthened against the euro and the forex pair EUR/USD climbed to 1.2921 after falling to the bottom 1.2858.The single currency was supported after the release of official data showed that retail sales in euro zone rose in May for 1% and the expected increase 0.2%. Investors remain cautious ahead of meeting of the European Central Bank to be held on Thursday and is expected to ECB President Mario Draghi again emphasized that breaks loose monetary policy will still not be.Euro was mixed against other major currencies after the Bank of England and European Central Bank monetary policy had not changed.The single currency has risen sharply against the British pound.European currency has weakened against the US dollar after the bring released data that showed that the ECB in July left interest rates at the same level of 0.50%, which was in line with the market expectations.EUR/GBP was flown to 0.8598.Euro stable against the Swiss franc and yen.EUR/CHF rose slightly to 1.2326 and EUR/JPY rose to 129.64. In comparison Canadian,Australian and New Zealand dollar the euro was mixed.EUR/CAD jumped to 1.3695,EUR?AUD fell to 1.4239 and EUR/NZD dropped to 1.6650.

  8. #8
    Master Member vinayakm's Avatar
    European bonds from Germany to Greece tracked gains in U.S. debt and European shares

    Despite minutes from the Fed's June meeting showing half of its policymakers think its monthly $85B stimulus program should be cut by the end of 2013, Bernanke's message was enough to snap markets back into buying mode.

    Nonetheless, Bernanke's comments were taken by the markets as much more dovish so I suspect it be good to trade puts especially on the DAX and the FTSE100.

    We are still in a bit of a sweet spot for equity markets. The US economy is recovering steadily and this is an encouraging sign for equity markets with future earnings expected to be good, but it is not hot enough to cause the Fed to scale back the stimulus.

  9. #9
    Legendry Member milos's Avatar
    Yesterday Euro rose sharply against the dollar after the release notes from the June Fed meeting which showed the members of the Monetary Committee still prefer keeping monetary incentives program despite positive economic indicators that have recently been published in America.In Europe,Greece was called a general strike for next week and the protects are still continuing.The Greek government has prepared a law that will be a reduction of thousand of jobs in the public sector which was one of the conditions for international aid.In Italy borrowing costs continue to rise after the credit rating downgrades the Standard & Poor's .Euro rose to it's highest level in the three weeks against the dollar after Federal Reserve Chairman Ben Bernanke Ben Bernanke said that the results of inflation and unemployment show that America's economy still needs monetary incentives. During European trading there was a minor correction and a drop of 1:14%. In Europe, inflation data released today in several countries in the euro zone. CPI, retail price index rose unexpectedly in France, Hungary and the world. On the other hand, wholesale price index in Germany is a bigger drop than expected. ECB publishes its monthly newsletter containing details of the last meeting. This report has shown that there is certainly a possibility of further reduction in the key policy rates if the economic situation in the euro zone is required.

  10. #10
    Veteran Member Dan21's Avatar
    The Bernanke speech was a clear indication that the monetary stimulus program will continue this year and probably next year too. That is a good reason to buy euro and euro denominated bonds, but still the problems with many of the countries from the periphery will stay unsolved. Greece will be under pressure long time from now and other countries like Portugal or even Italy will have problems with their debts soon. That’s why it is hardly to believe some major change in the sentiment toward euro will appear soon. Of course there is no impossible situation but most probably euro will underperform us dollar and some other currencies in the next few years.

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