bota mircea / Profilo

Surprise so small .. jump so high?

Euro zone inflation was 0.8 % in February, according to Eurostat signal value , 0.1 points higher than the estimates . It's a surprise that would have been largely overlooked, in other market conditions but not Friday, February 28 . EUR / USD has a jump of 0.8% in just one hour of publication , much of the accumulated gain immediate aftermath minutes . Like a compressed spring , the reaction energy stored pro EUR and especially against the dollar after the " soft" Yellen 's Congress. And , interestingly, the U.S. GDP in Q4 given right EURUSD fans " avant la lettre " : only 2.4 % growth . Draghi henceforth be bound hand and foot by rising inflation ? Highly unlikely. More likely, inflation was the straw that broke the camel and sellers of Euro gave up - but it really binds anticpările if we think about unemployment - after Italy , 12% seems good news.

Investors aspiring to new heights of indices in the U.S. and Europe after the S & P500 has shown the way . Dow Jones and DAX try not to be outdone , recovering with thirst . The Nasdaq , taking off the force has yet tens of percent to the record set on a wave of unprecedented euphoria in 2000. Set to ignore the abundant liquidity risks , participants see the bright side of consumer sentiment figures and ignores the very poor performance as seasonal real estate pre-contracts . Although the euphoria train is on, and inertia can propel for a while , reason suggests a more conservative orientation .

Yellen choose the perfect balance for investors

In the U.S. many of the macro data was below expectations , each and requests for unemployment benefits to 348 000 , and durable goods orders (excluding volatile items , the monthly growth of 1.1 % is still a good sign ) . Yellen answer questions now OF THE congress -man , so that there may be surprises , but so far the impression that the options are open. This means that although the Fed sees acquisitions concluded in the autumn, it takes a real improvement in the economy continued . For now , the policy should remain mild , and return to "normal " could take years . And even when you will need strengthening policy does not mean you sold the assets are available and other tools - so Fed seeks measures " delicate " action . EUR / USD went on holiday mode , as global indices . Meanwhile the struggle in Ukraine increasingly merges with the background ..
Euro cheer after German consumer confidence data and serenity of the south where Italy pays the lowest borrowing costs in recent years. But the helm is held by the ebb and flow of the dollar and the Fed alliance economic indicators

The U.S. dollar has had the greatest appreciation to the European single currency this month after the indicator housing sales came above expectations. The Australian dollar fell after the investment business sector shrank the most in the last four years.
European equity markets were down after the financial reports of companies have been disappointing. U.S. stocks have been in a slight increase over estimates amid publication of the indicator housing sales. Asian capital market fared stagnant before Yellen's speech today.
WTI has risen despite rising stocks. Gold had the biggest drop in the past four weeks after home sales indicator was published more than expected. Wheat fell from the peak last two months amid speculation reduce U.S. exports.

25.02.2014 trading results:

AGGRESSIVE TRADING: +3.27%; +85 pips; +17.05 usd
HEDGING EURUSD: 0
REAL TRADING: +1.44%; +69 pips; +16.92 usd

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EU forecasts 1.2 % GDP in 2014

Recent EU forecasts are more optimistic , ignoring PMI

The European Commission has published revised forecasts for 2014 saw an increase of 1.2% for GDP , 0.1 points above the previous estimate . In 2015 growth will accelerate to 1.8% , but below the U.S. rate , estimated at 3.2%. 2014 would shine for Latvia and Lithuania (4.2 % and 3.5%) while France and Italy will mope to 1% or 0.6 % . Germany, with a jump of 1.8% would be exceeded by Romania , which is expected to grow by 2.3%. Inflation will not return to the ECB target even in 2015 , with 0.7 lagging and unemployment will fall slowly to 11.7% over 2 years. Favorable estimates Euro area GDP can be taken as an argument traders to enter in favor of the Euro , although it delimits the PMI index for February series describing the risk of contraction France and shows a brake on the industry and service area euro . Markets are oriented in the sense EURUSD trend prior published forecasts , and thus facilitate the mission buyers .

In Italy the young premier Renzi has the opportunity to demonstrate whether related hopes his appointment will be translated into an outworking of structural reforms painful but necessary . By the fact, investors are willing to give him confidence , as shown in government bonds interest rate on 10-year 3.63 % , lower compared to the peak massive sovereign crisis , and also the performance of the Euro .

EUR USD is assessed without conviction

CPI Index , IFO helps Euro , but the feeling is still moderate

On Friday the dollar went on the defensive once the sales of homes already built in the U.S., which fell in January to a pace of 4.62 million units annualized , relative disastrous vis-a -vis the estimates, but understandable if we think white magic frost U.S. . Over the weekend, G20 encouragement to the growth and appeal to monetary policy changes were graded also for EUR / USD .

Euro zone inflation was higher than the median forecast nuanced , but 0.8 % is actually well below half the ECB target . And Germany , confirming the confidence indicator afeceri environment IFO best perception of the past three years reinforces the impression of advance at least 2 speeds within the euro area . Events in Ukraine helped risk assets , but the brakes to the real estate lending in China are the Dollar , meaning more serious warnings to the trend for rising time , the EURUSD .

Sales of homes already built not alter prognosis

Last month transactions already built houses were so weak that rate dropped to 4.62 million annualized units. January saw temperatures so cold that this underperformance is not at a close look, a surprise. It's normal desire to leave the house for anything other than basic needs to be strongly diminished when the slush freezes out. Depreciation of the dollar was a Pavlovian response. Estimated trend and the Fed, recovery in the coming quarters, remains valid.
Renzi will take over leadership of the Italian government today. It's another word that always supports reînnoitele expectations vis-a-vis Italy, and helps capitalize Euro advances against dollar.

For how long can withstand Euro decent ?

Today , the Fed has shown by the minutes of the previous session , the confidence that the economy is on track. How do unnecessary and dangerous return policy too relaxed interest rate increase to near the same as when the guide will give " dovish " actual . True, discussions were held before a series of posts below expectations , but yesterday's Fed speaker ii overlooked reports , putting them on account of unusually cold weather . The euro was hit hard but Eurozone PMI indices , where the notable exception of services in Germany the decrease was so great that GDP briskly T.4 seems outdated information , especially in France. Impairment of EUR / USD , double argued , was limited to testing a trend line . The euro 's rebound could continue if the CPI and U.S. labor market data keeps recent weak trend . But , increasingly, seems to be a matter of time , from several days to weeks before to witness a strong revaluation unfavorable EUR .

Following the change figures

Publications afternoon in the U.S. are very close to what is called a disappointment . New York has slowed the pace of the advance to third , according to industry index , while net inflows of capital placed in financial assets such as stocks and bonds was < 0, representing in fact outputs , not negligible , nearly 46 billion dollars. And should be added , of course , confidence national association of manufacturers , who plunged 10 points - a "performance" that cancels won the last six months . Is it any wonder that the dollar depreciated ? No, but it remains to be explained why the negative surprise ZEW Euro had a phlegmatic response , while the dollar depreciated emphasized , with the advance of gold , numbness U.S. figures suggested . Answer : The market is now more concerned with the U.S. slowdown scenario - with a break any restriction applied to the printing press - than the Eurozone return to recession. Gold reflects doubts vis-a -vis the U.S. , especially , and so has the fundamental support to continue the advance.

A new premier in Italy , the third of the election

Euro not impressed

The single currency has kept a wary tone today's session , resisting U.S. dollar .. and much else . Italy has a new prime minister , resulting from political understanding and not exit polls and hopes link markets more than avoiding early elections - usually resulting in lengthy negotiations to form a government - but the joy of promised reforms to the labor market and public sector . Proof of the original loan is in response to sovereign debt markets , the interest rates on 10-year Italian securities have lowered the minimum of the last eight years . Greece, on the other hand, can not hope for an easing of loan terms up to the European elections in May. Euro zone inflation and minutes from the Fed's monetary policy meeting will bring more vitality the EUR / USD , which for the moment seems to be still inclined to continue the previous trend oriented upwards .

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GDP in the Euro currency 's help ?

Draghi was right to be detached

Eurozone moves gradually towards economic development closer to normal , Mario Draghi signaled last Thursday. And , as on other occasions , macroeconomic data give justice . France rose 0.3 % in the fourth quarter of 2013 versus the previous one. Germany and the euro area have kept the same surprise in absolute value , by 0.1 points over estimates. Not a surprising source of better performance of Germany 0.4 % pace rather close , and the average line block , 0.3 % in France. In 2013 the overall European GDP was -0.4 % on , but it's more likely an expansion of 1.1% over the year. An economy that goes faster lessens the chances for the ECB to intervene aggressively disruptive elections such as for example the reduction of interest on deposits of commercial banks set below 0 . But they are fresh news hours after publication ? For traders , they can have a residual effect , possibly until the data from this afternoon . For long-term approach , a comparative view of the euro in relation to GDP shows a positive correlation , interrupted in times of turmoil , most notably the financial crisis. Euro has a future so bright ? Only if U.S. setbacks occur on the current direction of decreasing liquidity injections .

Italy government staggers .. Sound familiar ?

Negative interest rates on deposits

Euro has felt the full message came from the ECB yesterday stating that at least one group , probably the " Latin " is the introduction of negative interest rates on deposits of commercial banks . It's actually way more likely now that the German DC treated with cold bazooka program purchases of government bonds to great effect , though nowhere in practice by the central bank . In addition, a conflict between Letta , the current prime minister , and Renzi , big names in the party central Italian government coalition offered distant echoes of post- Monti uncertainty at a time when the European crisis was an active concern . But markets are almost as calm as after a session of meditation , while being fast implementation optimistic information .

Euro gradually regained first, then accelerated altitude due to hopes that negotiations will avoid early elections. An alternative would be to give Letta simply place Renzi , mayor of Florence. Italy, with the highest public debt / GDP in the Euro zone after Greece needs further reforms and postponing plus uncertain outcome of elections would waste precious time. A change of perspective and sentiment in global markets could attract speculative interest again selling Euro , while forcing the ECB to intervene , what weapons they find available . The situation is calm for the moment .

In short : In Italy the current government is fragile , threatened with dissolution of divergence between Letta and Renzi . But market reaction to meeting a solution indicates that investors see the bright side .

Pound break barriers during the governor's speech

Unemployment probably break the target set by the BoE in the quarter ending in January , Governor of the Bank of England announced . Canadian home , Mark Carney helped by its comments Massive pound to appreciate against the dollar and the Euro . A waiver of the interest rate in 2015 is now credible , although most of the speech he spoke of unused capacity in the economy, which is GDP by 1-1.5 % below the potential , and requires keeping interest rates at lower levels . In the future , raising rates ( which attract buyers pounds , but hinder lending ) will be gradual and will most likely stop far below the average of 5% before the crisis. Regarding " orientation guide " , it was amended to include the intention to work unused resources in the economy over the next two to three years . Markets have understood that the situation has changed , and the Bank of England is in the most favorable position for the first race start raising interest rates. Effect of modified message was an advance of about 0.7 % sterling . Tie long-term performance will be given by the respective economies . Anticipatory euphoria gave their speculative gains slight keeping their mission will not be easy but you will understand that the dollar has a powerful ally : the gradual reduction of QE program .

In Congress , Yellen is pleased investors

Continuity and possible redefinition of QE reduction are key themes

Measuring steps to reduce QE is the main scenario presented by Janet Yellen before Congressman tion, which had a chance to ask questions for the first time since taking office of President of the Fed . It seems good enough growth to predict economic recovery , she said , but the program does not have a pre- determined course . If a change needs to go, determined either by a significant deterioration in growth estimates or dangerous slowing inflation will move to action. Position apparently balanced blades wind blew investors and "helped " dollar contract. One detail still seems relevant : data from the labor market in January was , according JY affected by weather : thus seems likely to continue Fed rate cut 10 billion dollars QE program every " opportunity " . Current trend of EURUSD and US500 does not seem to be disturbed for a while . Certainly not for a long horizon .

Services grows, consumption falls in the Eurozone

Spain takes altitude , Italy barely manages to balance

Services fail to be the addition, but the pace of development is slow , according to indices published euro area today . Italy just approaching the neutral line , posting 49.4 points, one that would signal that the sector is no longer shrinking , while Spain is a notable addition to the 54.9 points, but still below average estimates . On a comparison chart between the two major world economies U.S. look better , but slowly the difference vis-a -vis the Euro area diminishes. It's a trend that can continue without stopping still thirst ECB monetary boost economic bloc .

In relation to the Japanese yen, the Euro has shown weakness in early correlated with risk aversion sentiment which has seized the capital markets. You could suffer again if Draghi press conference in keeping with widespread pre- announce new monetary measures , perhaps a lowering of interest on deposits in the negative .

Greece may receive an extension of the maturity payment received financial aid from the EU to 50 years , with a cheaper cost of 0.5 percentage points, according to recent debates . Dilapidated economy recession can not resist the current cost reimbursements . In fact, a third sequence variant that includes funding would be masked indirect recognition of bankruptcy of Athens, and the choice of rescue was determined by political reasons and to avoid domino effects rather than strictly judging the situation in Greece .

Story Behind the U.S. GDP

Solid growth based on consumption and net exports

Consumption was trade with pillar on which were built the fourth quarter results of the U.S. economy , an advance of 3.2 % annualized in the first estimate . Although some expected and better figures for the market was not a disappointment. Equity markets and the dollar indexes hailed in unison publications that have deleted even poor impression given by unemployment claims rising 348 000 . The second semester marked a rate of 3.7% , versus 1.8 % advance in semester I. It's a sustainable recovery , as evidenced by the increase of 2.8 % when the stocks are discussed . The story is one of strong growth , the economy can make do without QE .

However, current quotations from capital markets still seem to be too " pink " . An interesting chart shows that 27% of car loans " subprime " , twice more than three years ago. How dangerous are similar data for the mortgage ? NPL subprime category fell from 27% during the crisis just over 20 % now. Too little to be a real problem to overcome , and still double that in 2005 . And interest rates will rise. Attention long !

Bernanke says goodbye, taking care to draw a well-defined way

10 billion dollars slowdown sends a clear message

On each of the two branches of the program to create currency , the Fed cuts totaling 10 billion operated dollars, confirming the majority opinion . It also creates grooves that will be easier to follow Yellen than seeking to define others. The printing press now the system will add 65 billion dollars each month , but the markets will have to choose what is more important : this reassuring ( we're at 76 % of maximum speed , a strong reference ) or determination to go the way monetary normality , the rate of interest and liquidity creation is the main instrument . This direction can only leave and (much) more room for fluctuations in currency and equity markets . The U.S. dollar has gained and European investors turn information processed just this. Euro and pound beat a retreat , not a pound more easily passed over monetary aggregate M4 fascinating contraction by 1.4 % per month. And these trends could swing space in the coming days, with the permission of the GDP figures and labor market.

Bernanke 's term at the end

It was the last meeting chaired by Ben Bernanke . The conclusion of his term as Chairman of the Board means the end of a period of dramatic events. Monetary policy can be controversial ultra - relaxed and realistic effects will be evaluated only after another five years , but one thing can be said : Bernanke has provided extraordinary performance for clues U.S. capital markets . S & P has reached new record peaks , while emerging markets ( MSCI version ) are living in a lateral motion of four years .

Limelight was stolen Wednesday from emerging currencies. Pulse Turkish lira, the South African Rand and the Hungarian forint was stronger than the Euro and Sterling. In the shadow passed and data in Europe: consumer confidence Teutonic good but credit contraction suggests that the ECB will have to be inventive to stimulate lending. The last meeting of Ben Bernanke has gathered attention from the hustle magnificent natural surrounding emerging markets.