Countries & Regions Archives - Page 352 of 369

September 19, 2011

Does the Euro Have a Future? by George Soros | The New York Review of Books

The German public still thinks that it has a choice about whether to support the euro or to abandon it. That is a mistake. The euro exists and the assets and liabilities of the financial system are so intermingled on the basis of a common currency that a breakdown of the euro would cause a meltdown beyond the capacity of the authorities to contain. The longer it takes for the German public to realize this, the heavier the price they and the rest of the world will have to pay.

via Does the Euro Have a Future? by George Soros | The New York Review of Books.

September 19, 2011

Strong dollar costs nation 90,000 jobs | The Australian

INDUSTRIES trying to win exports or fend off imports have shed 90,000 jobs in the past three months as they try to deal with the high Australian dollar.

The only parts of the economy that have been adding staff in any numbers are the state and commonwealth public sectors, health, professional services and the mining industry.

via Strong dollar costs nation 90,000 jobs | The Australian.

September 19, 2011

Aussie Dollar tests trend channel

The Australian Dollar is testing the lower border of its long-term (Raff Regression) trend channel against the greenback on a weekly chart. Expect strong support at parity. Recovery above $1.075 would suggest a rally to test the upper channel around $1.20*, while failure would warn of reversal to a primary down-trend.

AUDUSD

* Target calculation: 1.10 + ( 1.10 – 1.00 ) = 1.20

September 19, 2011

Chart of the Day: Decoupled from reason – macrobusiness.com.au

First, from long term successful commodity trader Peter Brandt:

It has come to be known as the “risk-on/risk-off” or “all-one-market” phenomena in global markets. It is a situation where seemingly unrelated markets have taken on an historically high correlation. Individual markets seem to be the proxy for all other markets.

I have witnessed periods in the past when unusually strong correlations existed for months and months. But, I have never experienced the level of correlation we have lived with as traders since 2008.

via Chart of the Day: Decoupled from reason – macrobusiness.com.au

September 19, 2011

More on bank funding vulnerability – macrobusiness.com.au

Note the rather large spread that’s opened up between the market’s expectations for the official cash rate and the BBSW rate.

…………To make the point about how unusual this situation is, let’s take a look at the spread over a longer time frame……. As you can see, the GFC is the only other period where this spread has blown out in this way.

………..The US and Great Britain, which led the interbank seizure in the last crisis, have risen mildly. Of the Western markets, only Australia and Europe have spiked in a way resembling the GFC.

via More on bank funding vulnerability – macrobusiness.com.au

September 19, 2011

RBNZ throws cold water on RBA – macrobusiness.com.au

What should be clear…… is that the growth in Australian housing values has been funded, to a large extent, by foreign borrowings, much of it short-term.

A key risk going forward is that the banks’ ability to refinance their borrowings rests with the willingness of foreign investors to continue to lend them money. But in times of heightened risk-aversion – such as the impending European debt crisis – foreign investors can become nervous and less inclined to continue extending credit, which could leave Australia’s banks, house prices, and broader economy exposed to a sudden funding freeze.

via RBNZ throws cold water on RBA – macrobusiness.com.au

September 18, 2011

Rate cuts are coming – macrobusiness.com.au

The recent seasonal adjustments to the CPI and the reduction in the level of underlying inflation blunts the force of the RBA’s recent argument about inflationary pressures. But, absent an offshore catalysing event, that alone won’t make them cut rates.

Rather I think that household retrenchment and saving will lower economic activity in the economy and that the RBA has overplayed the extent that the mining boom induced income will wash through the Australian economy.

Increasingly, we are getting confirmation of this theory. Unfortunately, we are seeing Australians lose jobs at an increasing rate. Data released yesterday by Westpac on consumer unemployment expectations suggests this is going to get worse.

via Rate cuts are coming – macrobusiness.com.au

September 14, 2011

Sterling fallout

The pound, affected by euro fallout, broke support at $1.59 to signal a primary down-trend. Expect a test of its December 2010 low at $1.53*

GBPUSD

* Target calculation: 1.60 – ( 1.67 – 1.60 ) = 1.53

September 14, 2011

Aussie slides against US and Kiwi Dollar

Flight to safety weakened the Australian Dollar which broke support at $1.04 against the greenback. Expect another test of parity. 63-Day Momentum crossing below zero warns that the primary up-trend may be reversing. Breach of support would confirm.

AUDUSD

* Target calculation: 1.05 – ( 1.10 – 1.05 ) = 1.00

The Aussie Dollar is also testing support at $1.25 against its Kiwi partner. The primary trend is down and follow-through below $1.245 would indicate a down-swing to the lower trend channel over the next few months.

AUDNZD

* Target calculation: 1.24 – ( 1.28 – 1.24 ) = 1.20

September 14, 2011

Euro sinks

The euro found short-term support at $1.35 against the greenback but is now weakening. Failure of support would confirm the target of $1.30*. A peak below zero on the 63-day Momentum oscillator would confirm the primary down-trend.

EURUSD

* Target calculation: 1.40 – ( 1.50 – 1.40 ) = 1.30