UK & Europe Archives - Page 59 of 88

May 30, 2012

How Europe Can Save the EU: Work Harder, Spend Less

Andy Xie, an independent economist in China, said European countries without a competitive advantage must simply work harder or spend less. Alternatively, if they want to keep living it up, they will have to accept wrenching labor reforms and deregulation.

Xie saw no popular consent for either course of action. Nor did he detect that Europe was tightening its belt as urgently as Asia did after its 1997/98 financial crisis. “While eurozone economies have contracted a bit, people seem to be bent on enjoying life as usual,” Xie wrote in New Century weekly, a Chinese publication. “China cannot save Europe. No one can. Only Europeans can, through increasing work relative to leisure.”

via How Europe Can Save the EU: Work Harder, Spend Less.

Colin Twiggs

Colin Twiggs is a former investment banker with almost 40 years of experience in financial markets. He co-founded Incredible Charts and writes the popular Trading Diary and Patient Investor newsletters.

Using a top-down approach, Colin identifies key macro trends in the global economy before evaluating selected opportunities using a combination of fundamental and technical analysis.

Focusing on interest rates and financial market liquidity as primary drivers of the economic cycle, he warned of the 2008/2009 and 2020 bear markets well ahead of actual events.
He founded PVT Capital (AFSL No. 546090) in May 2023, which offers investment strategy and advice to wholesale clients.

May 29, 2012

Spain's Economy Shows Fresh Strain – WSJ.com

Spain’s economy showed fresh strain as retail sales fell at a record pace in April, showing the government’s austerity program is strangling consumption and suggesting deepening recession. Data Tuesday from the National Statistics Institute, or INE, showed seasonally adjusted retail sales fell 9.8% on the year in April, compared with a 3.8% drop in March. The decline was the sharpest since INE started collecting the data in January 2004. Household spending is dropping as unemployment approaches 25% of the work force.

via Spain’s Economy Shows Fresh Strain – WSJ.com.

Colin Twiggs

Using a top-down approach, Colin identifies key macro trends in the global economy before evaluating selected opportunities using a combination of fundamental and technical analysis.

May 28, 2012

UK & Europe

Dow Jones Europe Index found medium-term support at 220 but reversal of 13-week Twiggs Money Flow below zero warns of strong selling pressure. Breach of primary support at 210 would signal a decline to 160*, close to the 2009 low. Respect of support is less likely but would indicate a rally to 260.

Dow Jones Europe Index

* Target calculation: 210 – ( 260 – 210 ) = 160

The FTSE 100 is consolidating above 5250 on the weekly chart. 13-Week Twiggs Money Flow remains above zero but 63-day Twiggs Momentum warns of a primary down-trend. Failure of primary support at 5000/5100 would confirm.

FTSE 100 Index

* Target calculation: 5000 – ( 6000 – 5000 ) = 4000

Colin Twiggs

Using a top-down approach, Colin identifies key macro trends in the global economy before evaluating selected opportunities using a combination of fundamental and technical analysis.

May 27, 2012

Swiss Prepare Plans in Case of Euro's Demise – WSJ.com

Anita Greil: Switzerland is considering capital controls to fight a sharp rise in the Swiss franc in the event of a euro-zone collapse.

……In the 1970s, Switzerland used such extreme measures to curb excessive demand for its currency. The country prohibited foreign investments in Swiss securities and real estate, and introduced negative interest rates on foreign deposits. Both tools failed to stem the Swiss franc’s rise, which only halted after the central bank introduced a temporary peg to the deutsche mark, Germany’s currency at the time.

via Swiss Prepare Plans in Case of Euro’s Demise – WSJ.com.

Colin Twiggs

Using a top-down approach, Colin identifies key macro trends in the global economy before evaluating selected opportunities using a combination of fundamental and technical analysis.

May 24, 2012

Forex: UK and Europe

The Euro is testing primary support at $1.26 against the greenback. A peak below zero on 63-day Twiggs Momentum indicates continuation of the primary down-trend. Failure of support would test the 2010 low of $1.19/$1.20.

Euro/USD

* Target calculation: 1.26 – ( 1.35 – 1.26 ) = 1.17

Pound Sterling continues to test resistance at €1.26 against the euro. 63-Day Twiggs Momentum high above zero indicates a strong up-trend. Weak retracement which fails to test the new support level around €1.22 would indicate an accelerating/exponential up-trend.

Pound sterling/Euro

* Target calculation: 1.26 + ( 1.26 – 1.22 ) = 1.30

Colin Twiggs

Using a top-down approach, Colin identifies key macro trends in the global economy before evaluating selected opportunities using a combination of fundamental and technical analysis.

May 22, 2012

UK & Europe: Closer to the breach

Europe inches closer to the point when the artificial levee, built to protect European banks from market forces, is breached. Germany and France delay the inevitable while they attempt to restore bank balance sheets — by widening interest margins at the expense of depositors and transferring risky bonds to the European Central Bank . They do their utmost to avert a Greek default, because of contagion risk to the rest of the euro-zone, but their actions merely encourage more strident demands from Greece. If the levee breaks, damage will be that much greater because of the build-up of market forces behind the artificial barrier.

Spain’s Madrid General Index broke support at the 2009 low of 700, signaling another primary decline with an immediate target of 600*. Reversal of 13-week Twiggs Money Flow below zero reinforces the signal.

Madrid General Index

* Target calculation: 750 – ( 900 – 750 ) = 600

Italy’s MIB Index broke primary support at 13000, confirming the earlier signal from 63-day Twiggs Momentum and offering a long-term target of 10000*. Recovery above 13500 is unlikely but would warn of a bear trap.

Italy MIB Index

* Target calculation: 13500 – ( 17000 – 13500 ) = 10000

Germany’s DAX broke support at 6500 and is testing the rising trendline. Support remains strong, with 13-week Twiggs Money Flow holding above zero, but breach of the rising trendline and breach of short-term support at 6200 would indicate a test of primary support at 5400.

Germany DAX Index

France’s CAC-40 is also headed for a test of primary support at 2800. Reversal of 13-week Twiggs Money Flow below zero warns of selling pressure. Failure of primary support would offer a long-term target of 2000*.

France CAC-40 Index

* Target calculation: 2800 – ( 3600 – 2800 ) = 2000

The FTSE 100 found short-term support at 5300 but breach of the rising trendline and 63-Day Twiggs Momentum below zero warn of a primary down-trend. Failure of primary support at 5000/5050 would offer a long-term target of 4000*.

FTSE 100 Index

* Target calculation: 5000 – ( 6000 – 5000 ) = 4000

Colin Twiggs

Using a top-down approach, Colin identifies key macro trends in the global economy before evaluating selected opportunities using a combination of fundamental and technical analysis.

May 19, 2012

EconoMonitor : EconoMonitor » Europe’s Depressing Prospects: Two Reasons Why Spain Will Leave the Euro

Michael Pettis: I think Spain [and all the peripheral European countries are similarly uncompetitive] will leave the euro because it seems to me that the country has already started on the self-reinforcing downward spiral that leads to a crisis, and there is no one big enough to reverse the spiral.

How does this process work? It turns out that it is pretty straightforward, and occurs during every one of the sovereign financial crises we have seen in modern history. When a sufficient level of doubt arises about sovereign credibility, all the major economic stakeholders in that country begin to change their behavior in ways that exacerbate the problem of credibility.

Of course as credibility is eroded, this further exacerbates the behavior of these stakeholders. In that case bankruptcy comes, as Hemingway is reported to have said, at first slowly, and then all of a sudden, as the country moves slowly at first and then rapidly towards a breakdown in its debt capacity.

via EconoMonitor : EconoMonitor » Europe’s Depressing Prospects: Two Reasons Why Spain Will Leave the Euro.

Colin Twiggs

Using a top-down approach, Colin identifies key macro trends in the global economy before evaluating selected opportunities using a combination of fundamental and technical analysis.

May 17, 2012

Forex: UK and Europe

The Euro is headed for a test of primary support at $1.26 against the greenback, after breaking support at $1.30. Respect of the zero line by 63-day Twiggs Momentum indicates continuation of the primary down-trend. Failure of support would signal a decline to $1.17*.

Euro/USD

* Target calculation: 1.26 – ( 1.35 – 1.26 ) = 1.17

Pound Sterling continues to strengthen against the euro, testing resistance at €1.26*. The 63-day Twiggs Momentum trough high above zero indicates a strong up-trend. Weak retracement which fails to test the new support level around €1.22 would alert us to an accelerating/exponential up-trend.

Pound sterling/Euro

* Target calculation: 1.22 + ( 1.22 – 1.18 ) = 1.26

Colin Twiggs

Using a top-down approach, Colin identifies key macro trends in the global economy before evaluating selected opportunities using a combination of fundamental and technical analysis.

May 15, 2012

UK & Europe warn of primary down-trend

Dow Jones Europe Index broke medium-term support at 240, warning of another test of primary support at 210. Reversal of 63-day Twiggs Momentum warns of a primary down-trend. Failure of support would confirm.

Dow Jones Europe Index

The FTSE 100 broke medium-term support at 5600, indicating another test of primary support at 5000/5050. Breach of the rising trendline and retreat of 63-Day Twiggs Momentum below zero both warn of a primary down-trend. Failure of primary support would confirm.

FTSE 100 Index

Colin Twiggs

Using a top-down approach, Colin identifies key macro trends in the global economy before evaluating selected opportunities using a combination of fundamental and technical analysis.

May 11, 2012

Europe's nuclear brinkmanship with Greece is a lethal game – Telegraph Blogs

Ambrose Evans-Pritchard: Polls show that 70pc or even 80pc of Greeks still wish to stay in the euro, while at the same voting in large numbers for hard-Left and hard-Right parties committed to tearing up the Memorandum – a course of action that will take them straight out of the euro.

I do not wish to reproach the Greeks for cognitive dissonance. We all do this, and besides, euro membership is more than just a currency for Greece. It is the anchor of identity for an isolated Balkan nation living cheek by jowl with the Ottoman nemesis……..

The chief danger is not for Greece. It is for the rest of the eurozone. If the German political establishment is unwise enough to force Greece out of EMU on the assumption that the country is a special case, it will be disabused of this illusion very quickly.

via Europe’s nuclear brinkmanship with Greece is a lethal game – Telegraph Blogs.

Colin Twiggs

Using a top-down approach, Colin identifies key macro trends in the global economy before evaluating selected opportunities using a combination of fundamental and technical analysis.