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FX Day Trading - 11 November 2011
Economist appointed as Greek PM
Another one lined up for Italy?
Italian senate to vote on austerity measures
The Global Language Monitor is no more global than the World Series. The US market research firm is decidedly America-centric but it does come up with an annual list of the ten most-used "English" words.
This year's results are just out. To a Limey ear, three of them are fair enough: 'occupy' (as in pitch a tent outside a church), 'deficit' (as in Euroland's sovereign credibility gap) and 'drone' (the sound of EU leaders promising solutions for Greece). Fracking could be a minced oath.
But what about the other six? Non-veg, Kummerspeck, Haboob, 3Q, Trustafarian and The Other 99 [sic]. Hands up anyone who has ever used one of those in a sentence. And what about Hacking, Bailout, Recapitalise, Risk, Default, Rescue and Euro? Where are they?
Alive and well on this side of the pond, if today's papers are anything to go by. Hacking was covered at length in Westminster and the search is still on for a scheme that would bailout Greece, recapitalise the banks at risk to sovereign default and rescue the euro.
Spread betting investors can evidently still see a rose-tinted light at the end of the tunnel. On Thursday they backed off from the previous day's assault and allowed the euro some breathing space. Helping to support that mood were the nomination of a new prime minister for Greece and an Italian treasury bill auction that went more smoothly than many had feared.
A cynic might question the logic of appointing a banker to oversee the resolution of a financial crisis allegedly precipitated by his ilk, but Lucas Papademos is not that sort of banker.
Until yesterday a professor of economics at Harvard, he has previously run Greece's central bank and for eight years was vice president of the European Central Bank (ECB). Bluntly, if financial markets are ever going to trust any new Greek leader, Mr Papademos is he.
As for the Italian bill auction, investors stumped up €5bn in return for a 6.09% yield. That was considerably more than the 3.57% they demanded from a similar issue last month but at least it was below the psychologically important 7% threshold.
Never mind that the ECB was soaking up other Italian bonds to support the market; compared with other possible outcomes it was 'a result'.
This morning's news has it that Italy might be about to make a similar choice to Greece for its new leader. The name of Mario Monti is in the frame. An alumnus of Yale, Sig. Monti is a professor of economics and has spent five years as an EU commissioner.
If indices spread betting investors are presented with a matching pair of technocrats in charge of Greece and Italy there could be a relief rally for the euro, if only a short-lived one. See also EUR/USD spread betting.
There were slim pickings on the ecostat front yesterday and it will be the same today with just UK producer prices and the Michigan index of consumer sentiment. All eyes on Rome then, with a senate vote on austerity and the possible appointment of a new PM. Or will Mr Berlusconi fumble this one as well? Have a good weekend.
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'Euro Spread Betting Market Rallies as Greece Appoints New PM', Article by Moneycorp, last update: 11-Nov-11
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