A couple of Daily Telegraph stories have attracted attention this morning. One article suggests that Britain's 200 largest private [PENSION SCHEMES] are over [GBP100BN IN DEFICIT] for the first time. These schemes have been in deficit for the past year but this is the first time the shortfall has breached triple figures and experts expect it to grow further & that a major company will go bankrupt in 2010 due to this problem. Adding to the doom & gloom, [S&P] warns that Britain's banks will hold back the economic recovery due to their ["SIGNIFICANT DEBT BURDEN"]. The agency lowered the collective rating of UK banks yest in anticipation of high credit losses, and they also said that they no longer consider the banks to rank amongst the most stable with no alternative but to reduce their debt. It also expects Britain's banks to see loan losses of Gbp150mn to Gbp250mn in the 3 yrs to 2011.
Following [GREECE'S RATINGS DOWNGRADE] by Moody's, the agency notes that the outlook is still negative as it deems the govt's measures to cut the soaring deficit insufficient to counter l/t risks. Moody's does not believe that the Greek tragedy will hit the Eurozone overall, brushing aside concerns that the single ccy could come under pressure. Meanwhile, s/t liquidity will not be one of the more pressing concerns for Greece as Moody's sees the ECB funding channel as secure, believing the possibility of ineligibility remote. Recall, ECB's Papademos said recently that the CB will not deviate from its course to tighten collateral rules in order to accommodate Greece, although for now Greece's access remains open.
[EU ASSET MARKET UPDATE] EU bonds are still trading well underwater as the underlying asset switching bias persists although the outperforming [GILTS] are back to opening levels (down 25 ticks at 115.34) but [BUNDS] down 55 ticks at 122.49 (having kicked off at 122.66). The shape of the curve has steepened with the Euro 2-10 yr spread up at 208 bps as, in contrast to the usual "norm" the long end has borne the brunt of the asset reallocation. The 2-10 yr U.S spread is at record highs, adding another 1 bps to around 283 bps this morning. The one glimmer of hope for bulls is the chart gaps created by the huge sell off (between 122.68 & 122.85 in Bunds & 115.39 & 115.43 in Gilts). [DAX] has made another new 15 month high at 5963 but [FTSE] has been the main beneficiary, adding 0.7% to 5332.2. Oil & Gas have led the way higher despite the underlying commodity still trading below $75brl.
Following [GREECE'S RATINGS DOWNGRADE] by Moody's, the agency notes that the outlook is still negative as it deems the govt's measures to cut the soaring deficit insufficient to counter l/t risks. Moody's does not believe that the Greek tragedy will hit the Eurozone overall, brushing aside concerns that the single ccy could come under pressure. Meanwhile, s/t liquidity will not be one of the more pressing concerns for Greece as Moody's sees the ECB funding channel as secure, believing the possibility of ineligibility remote. Recall, ECB's Papademos said recently that the CB will not deviate from its course to tighten collateral rules in order to accommodate Greece, although for now Greece's access remains open.
[EU ASSET MARKET UPDATE] EU bonds are still trading well underwater as the underlying asset switching bias persists although the outperforming [GILTS] are back to opening levels (down 25 ticks at 115.34) but [BUNDS] down 55 ticks at 122.49 (having kicked off at 122.66). The shape of the curve has steepened with the Euro 2-10 yr spread up at 208 bps as, in contrast to the usual "norm" the long end has borne the brunt of the asset reallocation. The 2-10 yr U.S spread is at record highs, adding another 1 bps to around 283 bps this morning. The one glimmer of hope for bulls is the chart gaps created by the huge sell off (between 122.68 & 122.85 in Bunds & 115.39 & 115.43 in Gilts). [DAX] has made another new 15 month high at 5963 but [FTSE] has been the main beneficiary, adding 0.7% to 5332.2. Oil & Gas have led the way higher despite the underlying commodity still trading below $75brl.
those who can, do. those who cant, talk about those who can
im ready to short if it does close below 320...coz that would mean that it tested twice and still failed to close above!
