For the latest FX Daily Trading Update see FX Day Trading.
FX Day Trading - 2 December 2011
Merkozy push for budget reform
Will investors buy it?
Governor says prepare for the worst
They really started something in Athens when Lucas Papademos and his unelected government took power last month.
In these straitened times the idea of saving money on the election process has undeniable appeal to the EU and its client states. It was only a matter of days before Italy followed Greece's lead. Now it seems the process has been extended from the macro to the micro level.
Anthea McIntyre from Hertfordshire has been appointed an MEP, taking one of 18 new seats created by the Lisbon Treaty. Her input, and that of her 735 colleagues in the European parliament, will be crucial to solving the Eurozone debt crisis. Either that, or Angela Merkel will ignore them as an irrelevance and make the decisions herself.
The German chancellor cannot be faulted for her consistency in insisting that jointly-issued eurobonds are a no-go area and that the European Central Bank cannot act as lender of last resort. She has been equally insistent that reform to the Eurozone’s budgetary rules is the only way to stop the current rot and pave the way to a more stable future.
Whilst President Sarkozy is not perfectly in step with Frau Merkel's federalist ambitions, he agrees that "There can be no common currency without economic convergence". The summit meeting in a week's time is likely to approve something along those lines.
But will it be enough to hoist the euro back onto the rails? The governor of the Bank of England was almost alarmist yesterday in his admonition to Britain's banks that they should fill sandbags and clear the decks for action.
He said: "An erosion of confidence, lower asset prices and tighter credit conditions are further damaging the prospects for economic activity and will affect the ability of companies, households and governments to repay their debts. This spiral is characteristic of a systemic crisis."
There was no reaction to Sir Mervyn's comments by the pound or any other major currency. FX spread betting investors have reached the level of battle fatigue that makes them indifferent to all but the biggest shocks. The pound, the euro, the US dollar and the yen have drifted no more than half a cent apart over the last 24 hours.
The only real mover was the Swiss franc, which took a one-cent dive on Thursday afternoon after the Swiss government let it be know it was considering negative interest rates, a strategy most recently seen with Sweden's -0.25% deposit rate in 2009-10.
Thursday's manufacturing sector purchasing managers' indices (PMIs) showed a widening gap between America and Europe. The US figure climbed two points further into the expansion zone at 52.7; the French, German and UK readings edged lower, all of them within a 47.3-47.9 range.
Today's data cover Swiss retail sales, Eurozone producer prices and Britain's construction sector PMI.
The main business for online spread betting markets comes after lunch with the Canadian and US employment data including the important change in US non-farm payrolls. The average this year has been a 125k monthly increase and today's figure for November is expected to be close to that level.
Of most importance will be Angela Merkel's speech to the Bundestag. Does she have anything up her sleeve or will it just be more jam tomorrow? Have a good weekend, and don't forget those sandbags.
Currency Trading and Spread Betting carry a high level of risk to your capital and you can lose more than your initial investment, they may not be suitable for all investors. Ensure you only speculate with money that you can afford to lose and that you fully understand the risks involved and seek independent financial advice where necessary.
The above content does not constitute investment advice, it is provided purely for information purposes and is delivered as a personal view of the writer. Neither the contributing company (or writer) nor Online-Spread-Betting.com accepts any responsibility for any use that may be made of the content.
'Swiss Franc Spreads Dive Lower as Government Considers Negative Interest Rates', Article by Moneycorp, last update: 2-Dec-11
Related articles:
FX Day Trading, 18-Apr-12,
Daily FX Trading updates covering the influences on the key FX markets. Daily updates include key FX market movements and features the Dollar, Pound, Euro and Yen as well as...see: FX Day Trading
FX Day Trader, 17-Apr-12,
A daily review of the currency markets concentrating on the major Dollar, Yen, Euro and Pound Sterling markets...see: FX Day Trader
£1 per point: Start trading £1 per point/tick & an initial deposit of £30
Multiple markets: Forex , Commodities, Indices & Equities
Risk Warning - Spread betting carries a high level of risk to your capital & you may lose more than your initial investment. Only speculate with money that you can afford to lose. Please ensure you fully understand the risks involved, seek financial advice where necessary & make sure spread betting meets your investment objectives.
(1) The FTSE Rolling Daily Spread is 1 tick during market hours & 4 ticks out of hours. 1 Tick is defined as a full FTSE point. See our Product Information for more details. (2) The above information is correct at time of writing. (3) Tax Law can change.
FinancialSpreads.com is a trading name of London Capital Group Ltd which is authorised & regulated by the Financial Services Authority (FSA). Registered address: is 4th Floor, 12 Appold Street, London EC2A 2AW. All information correct at time of publication.
Risk Warning:
Spread Betting carries a high level of risk
to your capital and you can lose more than your initial investment,
it may not be suitable for all investors. Ensure you only
speculate with money that you can afford to lose and that you fully
understand the risks involved and seek independent financial advice where necessary.
Disclaimer:
Online-Spread-Betting.com does not endorse the information and
analysis available on this site. It is provided purely for information
purposes and is delivered as a personal view of the writer. Under no circumstances
is the information hereon to be used or considered as, an offer to sell, or a
solicitation of any offer to buy. The website content does not constitute investment
advice and neither the individual contributor nor Online-Spread-Betting.com accepts any
responsibility for any use that may be made of the content.
* Tax Free Trading:
Tax law is subject to change. It may also differ if you pay tax in a jurisdiction outside the UK.
