EurAnalysis

Europe. What you´d expect.

T

I am from Belgium so I know what political chaos is.

All true, it is also true the UK banks have a 90billion exposure to Irish banks and the UK banks don't want anyone looking through their loan books in great detail (there might be something else that they don't want anyone to see).

Leaving that aside, the long-term implications for sterling are interesting...

Well finally Belgium has a budget, but how stable is the government? and how deep underwater are the taxpayers with the Dexxia fiasco?

you're from Belgium, so do you guys have a government in place yet?

trade well

LP

European morning wrap: Early morning jitters morph into apparent optimism.

■ Statement by the euro area heads of state or government
■ Bundesbank: “Fundamentally open” to bilateral loans to IMF – Dow Jones
■ German advisor Bofinger: EU deal “insufficient” – Bloomberg
■ China investment vehicle to create “300 bln fx investment vehicle. Vehicle to comprise two funds, one focused on Europe and one on U.S – Reuters quoting source
■ ECB seen buying Italian and Spanish bonds
■ ECB sources: ECB sovereign bond buying capped at maximum 20 bln euros per week
■ China ForMin: Beijing has noted important steps decided at EU summit
■ ECB: Banks borrowed 8.04 bln from lending facility Thursday, lower than Wednesday but still high
■ Ireland’s minister of european affairs: 50/50 chance of Ireland requiring a referendum on european fiscal integration
■ ECB’s Ophanides: Bond markets are about trust
■ ECB’s Knot: ECB has had informal ECB meetings about emergency liquidity assistance for banks. Southern european bank sector is slowly running empty as debt crisis continues
■ ECB’s Nowotny: ECB doing utmost to avoid having Europe enter recession
■ More Nowotny: Dangerous to automatically talk down results of EU summit
■ And even more Nowotny: Won’t rule out potential danger of credit crunch in euro zone
■ German FinMin: Sees weaker economic growth in Q4
■ Bk of Italy’s Visco: Need further govt measures soon to up growth
■ More Visco: Must understand, respect German “obsession” with not monetising debt

Been quite a marked turnaround in sentiment this morning. Early jitters have morphed into apparent optimism, European stocks rallying very strongly after a weak start while the single currency has had a decent morning.

EUR/USD up at 1.3405 from early 1.3330. Inbetween we’ve been down to 1.3280 and all the way up to 1.3433 in very volatile trade.

Early sell off reached 1.3280, single currency not helped by Moodys’ downgrading French banks. Sovereign buying (both Middle Eastern and Asian) then lent support and we were quickly back over 1.3400.

Reports of ECB buying Italian and Spanish bonds helped provide a little more support. Reports had sell orders clustered up at 1.3340/50 with stops just above and indeed there was a major tussle around 1.3350.

The euro bulls won out and the single currency ground higher. Then Dow Jones carried comments from the Bundesbank, that they are “fundamentally open” open to bilateral loans to the IMF and we spiked quickly over 1.3400 to session high 1.3433 before settling back.

Cable up at 1.5705 from early 1.5615, the rally acclerating when buy stops tripped through 1.5660.

USD/JPY effectively unchanged at 77.65. EUR/JPY up at 104.10 from early 103.45.

Source: http://www.forexlive.com/blog/2011/1...rent-optimism/

thanks mate

so this vote was about if:

the fact that if a euro country comes into problems (like greece, italy etc) in the future, the other EU countries can have a look at their fiscal plans and vote to change them?

Btw, wasnt ECB funelling cash to IMF 14 days ago?

T

There is a Federal Government installed lead by a socialist prime minister.

very good - the topic came up in discussion the other night with my brother. He may be moving to Brussels next year.

trade well

LP

Not that radical. It would have been had there been a treaty change, or at least it would have been in the draft but probably watered down in the final.
What they are going for now is an intergovernmental agreement to commit to fiscal discipline, but I don't think there is recourse for enforcement. Not sure about automatic sanctions either. I haven't read the document yet. Just what I heard on CNBC and listening to the press conference. I will read the document on the weekend.

1.- Does anyone else think this is not good enough?
2.- Does anyone else think US will open bullish, but london close, will bring it down ?

The fiscal discipline rule was allready there in the past.
Even Germany didn't obey it.

Actually it is only the debt to GDP ratio that Germany didn't obey.
However, the 3% to GDP max budget deficit rule was only disobeyed by a few including the PIIGS

It was breached in 2003 by France and Germany.

What does your TA tells you will mostly happen once US opens ? Also the EU Summit is over for the day or its still in place ?

thanks

i thought this was the only way to get germany to agree to a mandate/treaty change....

given that germany was having to bail out the weaker countries because of their strength?

so the germans basically said we want to know if these countries budget plans, are or arent working out, sooner rather than later.....

and if they arent going according to plan the other more powerful EU members like germany and france can step in and get the strugglers to change policy/fiscal/budget plans?

or am i wayyyyyy off the mark! lol

Merkel: Creating new basis of confidence for the euro

Written by Jamie Coleman
December 9, 2011 at 13:33 GMT

1. Aware that many are watching the EU
2. EU is drawing lessons from the crisis
3. Stable euro important for UK too
4. EU made breakthrough to a lastingly stable euro
5. Fiscal union to develop over next few years

From Forexlive


Oh that last line gives me "confidence" in the Euro

Anybody trading?
Or just jawboning?

Took a long on AUDUSD this morning and waited for a short EURUSD.
What do charts tell anyone else?
The whipsaw does churn some pips with timing.

Merkel says have made clear will not top up ESM beyond EUR 500bln after March