Thursday, November 24, 2011

Scotia Capital, BBH and Merrill Lynch favor loonie


Analysts at Scotia Capital recommend selling EUR/CAD. The specialists note that the single currency will stay under pressure due to the euro zone’s debt crisis, while Canadian dollar will be able to appreciate due to Canada’s top credit rating, stable government, rather strong economy and commodity base.

Strategists at Brown Brothers Harriman share this opinion. In their view, the pair will fall from the current levels in the 1.4000 area to the levels below 1.3800.

Economists at Bank of America Merrill Lynch advise investors to open shorts on AUD/CAD. According to the bank, Australian dollar will suffer more in case of the global growth slowdown. In addition, the Reserve Bank of Australia began easing its policy, while the Bank of Canada remains on hold.

published by FBS Holdings © 2011

BoA: Aussie will fall against the greenback

Technical analysts at Bank of America believe that Australian dollar may fall to more than 1-year minimum versus the greenback.

The specialists note that bears got more powerful after AUD/USD breached support of 2008 maximums in the $0.9927/0.9850 area. In addition, Aussie will likely be affected by the market’s risk aversion.


According to the bank, the pair is now on its way down to $0.9330. If it fails to hold at this point, it will be poised for a decline to $0.9000.

Australian currency lost 7.7% versus its US counterpart in November showing the second worst results among the major currencies after New Zealand’s dollar.

published by FBS Holdings © 2011



Tuesday, November 22, 2011

Credit Suisse: the climax for euro area is approaching

Analysts at Credit Suisse believe that in order to save the single currency European leaders –primarily, France and Germany – will have to reach by the middle of January “a momentous deal” to increase the degree of integration and transform the monetary bloc into the fiscal and political union.

The specialists expect that in this case the ECB will agree to cut its benchmark rate and provide banks with longer-term funds and do all it can to prevent euro’s collapse.

In their view, during the most critical moment the Italian and Spanish 10-year bond yields may surge above 9% and French yields may bounce above 5%.

Bloomberg reports that for the hints on the euro zone’s future one should pay attention to the European Commission’s recommendations on euro-area debt which are to be published this week and by the French President Nicolas Sarkozy’s speech next month on the 20th anniversary of the Maastricht Treaty.

daily eurusd 16-25


published by FBS Holdings © 2011

Friday, November 18, 2011

Commerzbank : euro’s recovery will soon be over

Commerzbank : euro’s recovery will soon be over

Options market expects euro’s slump

Wall Street Journal reports that 1-month risk-reversal indicator, which measures the weight of the bearish options bets on the single currency on the bullish ones, surged to 4 volatility points overcoming the level of 3.5 volatility points where it was seen at the peak of the financial crisis in 2008. That means that investors expect a sharp fall in EUR/USD during the next month.

Analysts at ING underline that rising yields on European bonds stirs up the market’s concerns. Specialists at Brown Brothers Harriman think that euro will react to the growing concerns about France, Belgium, Austria and other core countries that threaten to take the sovereign debt crisis to a new level.

daily eurusd 12-58
 
Chart. Daily EUR/USD

writed by FBS Holdings © 2011

The BEST WAY to hope you'll make money investing?

Being right and sitting tight in gold might not be different things...

The BEST WAY to hope you'll make money investing?

Berkshire Hathaway legend Warren Buffett reckons it's "being right" – which is about as down-home as the "Sage of Omaha" could get. "Sitting tight" was the key for legendary "boy plunger" Jessie Livermore, whose personal depression drove him to suicide in 1940, apparently leaving $5 million behind him. Contemporary hedge-fund legend Hugh Hendry says your best shot comes from "contentious" positions – taking on trades that no one else dare back, because they can barely conceive of a world in which they might ever pay off.

And right now, what could be more contentious than gold?




"Without any contentious posturing in your portfolio, I suspect you're not going to make money," Hendry told an interviewer this summer."

"You're not guaranteed to make money by being contentious or controversial," he stressed. "But if you can get your mind around the most contentious viewpoints, I think you stand a better chance of making money."

Now, we know what Buffett thinks of gold, and we know that Hendry didn't buy the bull back in 2008, when gold made headlines amid Phase II of the global financial crisis to date.

"[People] fear financial anarchy. Gold coins are sold out. Everyone is in."

Contrarian investors, therefore, should have stayed out – or even gone short – at $800 per ounce. Because "everyone [was] in." Except for all those people who've been buying gold since, nudging it back up towards that all-time high – in real terms – hit at the start of 1980.

Hence the contrarian's quandary today. Because if you read only the financial pages, you might imagine everyone is "all in" as 2011 nears its end. Looking at our chart above, you might also think that gold returning to record levels – adjusted for inflation – means it is plainly nearing its top, too. Subject to the same "mania" that led investors over a cliff in the early Eighties, the bull market has been and gone. You missed it.

But if true, then so did pretty much every other private investor and saver in North America and Europe as well. Only a tiny proportion of Western households hold any real chunk of their savings in gold today. The continued surge in consumer demand is coming instead from Asia, a market driven by cultural affinity – and a recently released appetite for gold ownership – that finance professionals and advisors can barely imagine in the West.

Yes, central banks in the rich emerging economies are quietly buying gold at a record pace as well. But that only makes gold yet more contentious still – sitting right on the edge between them and the developed-world's sellers of a decade ago. The really contentious view might instead see gold instead causing a real shock, and going still higher again in just the way it didn't three decades ago.

As for Jessie Livermore, gold was money when he made the bulk of his trades over a lifetime ago – the end, not the means, of making a profit.

Can you imagine that?








Adrian Ash
BullionVault
Formerly City correspondent for The Daily Reckoning in London and head of editorial at the UK's leading financial advisory for private investors, Adrian Ash is head of research at BullionVault – winner of the Queen's Award for Enterprise Innovation, 2009 and now backed by the World Gold Council market-development and research body – where you can buy gold today vaulted in Zurich on $3 spreads and 0.8% dealing fees.
(c) BullionVault  2011
Please Note: This article is to inform your thinking, not lead it. Only you can decide the best place for your money, and any decision you make will put your money at risk. Information or data included here may have already been overtaken by events – and must be verified elsewhere – should you choose to act on it.

Wednesday, November 16, 2011

Forex Daily Analysis - EUR/USD - 17 November 2011

The EURUSD is now nearing a short term downward sloping trend line (near 1.3415). This may provide interim support along with a former pivot at 13360.
 
Any sign of strength from here might encounter resistance from the trend line resistance (please be aware of the following levels as well: 13575, 13625 and 13670).
 
We might be seeing a topping process unfolding since November 2010 (head and shoulders). 
 
 
 
 
by David Frank, AVA FX
DISCLOSURE & DISCLAIMER: THE ABOVE IS FOR INFORMATIONAL PURPOSES ONLY AND NOT TO BE CONSTRUED AS SPECIFIC TRADING ADVICE. RESPONSIBILITY FOR TRADE DECISIONS IS SOLELY WITH THE READER.

Gold Analysis - November 17, 2011


GOLD: The Yellow metal might have completed a bearish Evening Star candlestick formation near $1800.00 and has broken through rising channel support. This might end up testing the 38.2% Fibonacci retracement level at $1746.26. A move below that level could end up testing the 50% Fib at $1695.05.


Looking up, the channel bottom, at $1780.64, is now near term resistance.
by David Frank, AVA FX
DISCLOSURE & DISCLAIMER: THE ABOVE IS FOR INFORMATIONAL PURPOSES ONLY AND NOT TO BE CONSTRUED AS SPECIFIC TRADING ADVICE. RESPONSIBILITY FOR TRADE DECISIONS IS SOLELY WITH THE READER.

Is Germany Eyeing the Exit?


German leaders talk about "more Europe"…but are they just buying time…?


THIS IS just an idea – but perhaps Germany is only pretending to want more European integration.


The rhetoric is real enough. German chancellor Angela Merkel told her party conference this week that the solution to the Eurozone crisis is "more Europe". At the same conference, finance minister Wolfgang Schaeuble said Europe needs "to build the political union that we didn't manage to achieve in the 1990s."


"That means fiscal union," he made crystal clear.


Schaeuble is echoing the words of Juergen Stark at a conference earlier this month:

"We need bold steps toward a fiscal union," said Stark – who resigned as European Central Bank in September over its decision to buy government bonds.


"We need to go beyond and create a financial union. In one word, the crisis has clearly shown us that we need 'more Europe.'"


This is heady stuff – especially when you consider that Merkel has said commonly-issued 'Eurobonds' are "not a sensible idea". How to interpret Germany's lurch towards such integrationist rhetoric?


One way is to take it at face value. An alternative interpretation is that Germany is simply buying time.


Let's take the face value interpretation first. Germany is terrified of the idea of the European Central Bank monetizing sovereign debt. Though it is forbidden from buying government bonds directly – by Article 123 of the Lisbon Treaty and elsewhere – this hasn't stopped it buying Greek, Portuguese, Irish, Italian and Spanish bonds on the open market, in the hope of forcing down their yields. This hasn't really worked, so the next logical step is to ignore the rules and buy the debt direct.


Advocates of such a move say it is the only way to credibly stop the rot, since the ECB has 'unlimited funds' (what they actually mean is it can put the debt it buys on its balance sheet and create the Euros to pay for it). Anything less than this will be an open invitation to speculative bond market attacks.


Germany doesn't like this idea – understandably, given the Weimar hyperinflation still casts its long shadow. In truth, neither does Germany like the idea of throwing its fiscal lot in with the rest of Europe. But it has come to realize that it faces a choice – fiscal integration or debt monetization. It has chosen the former.


This, at least, is the face value interpretation of Germany's position. But might there be another explanation?


The Eurozone is in serious danger of breaking up. Everybody knows that. What some may not realize is just how close that moment could be. 


Take a look at the following chart:


French-German 10-Year Yield Spread (last five years)


 

Source: Bloomberg


The chart shows the difference between the yields on French 10-Year government bonds versus their German equivalent – known as the spread over bunds. This spread hit a Euro-era high on Wednesday of 193 basis points (1.93 percentage points).


As you can see, this spread has risen sharply in the last month or so. This is what it looks like when a currency union starts to break apart. Bonds issued by the Eurozone's two largest countries are yielding very different returns.


It is clear the market no longer considers French government debt risk-free – despite its AAA rating (if you ignore Standard &Poor's somewhat Freudian accidental downgrade last week). This makes sense, especially when you consider how heavily exposed French banks are to Italy.

What is less obvious – at least, less obvious to many who are buying gold – is why German government debt is seen as such a safe haven. Yes, it offers a short-term bolt hole. Germany holds the Eurozone's checkbook, and it isn't going to let itself go under ahead of any other member.

And yes, many institutional investors are limited in what they can hold, and bunds do represent a AAA-rated, Euro-denominated, highly liquid asset.


But surely, sooner or later, Germany will be on the hook for all this? One way to understand the 'contagion' aspect of the Eurozone crisis is to think of a vast swarm of capital losses – most incurred years ago, during the boom – looking for someone to take the hit. German leaders must have noticed that these losses are heading their way.


Unless...


Unless there's an alternative interpretation for Germany's integrationist stance. Maybe – behind all the rhetoric about "more Europe" and "fiscal union" – maybe Germany is quietly preparing to leave the Euro. 


This may seem an odd idea – especially when you consider how much Germany's export sector has benefited from the Euro (something that Beijing-based economist Michael Pettis does an excellent job of demonstrating in his latest blog).


Germany leaving the Euro would create a great big mess – economically, legally and politically. But a great big mess looks unavoidable at this point. 


A German decision to unilaterally abandon the single currency must now at least be considered a possibility. Going back to the Deutsche Mark would be difficult – and would almost certainly hit Germany's export model as the currency appreciated. But domestic and international politics may make it impossible to save the Euro – and Germany's leaders may already have realized this.

Schaeuble said this week he would like to see a change to the Lisbon Treaty by the end of 2012, to enable greater fiscal integration. Some European Union members – most notably Britain – are opposed. 


Fine, says Schaeuble.


"In that case, we would ask them not to stop the 17 of us [in the Euro] from proceeding."

A European 'inner core' has long been a desire of French president Nicolas Sarkozy. Now, it would appear, he has Germany's backing. But it may be a feint – a ploy to buy time before a dash to the exit.


Ben Traynor
BullionVault


Editor of Gold News, the analysis and investment research site from world-leading gold ownership service BullionVault, Ben Traynor was formerly editor of the Fleet Street Letter, the UK's longest-running investment letter. A Cambridge economics graduate, he is a professional writer and editor with a specialist interest in monetary economics.

(c) BullionVault 2011

Please Note: This article is to inform your thinking, not lead it. Only you can decide the best place for your money, and any decision you make will put your money at risk. Information or data included here may have already been overtaken by events – and must be verified elsewhere – should you choose to act on it.

Tuesday, November 15, 2011

Will the Japanese Government Intervene to Weaken the JPY?

In a speech earlier today, Japanese Finance Minister Azumi suggested the BoJ will respond in an appropriate manner to continued JPY strength. 


Azumi was also quoted last Friday as saying, “We have responded to excessive currency market moves to protect our national interest”.

He added that he is watching the market closely for speculative moves. The Japanese Ministry of Finance has increased their comments regarding a strong JPY, something the government has previously done before intervening in the foreign exchange market.
The JPY continues to strengthen versus both the EUR and the USD with the EUR/JPY falling to a one month low near 104.00. There is currently a lack of support on the daily chart and the pair could test the October low of 100.75. The USD/JPY has come under pressure and has an initial support at Monday’s low of 76.80 followed by the all-time low at 75.50.

Monday, November 14, 2011

Dollar Rally sees Gold Fall - Merkel calls for More Europe

Dollar Rally sees Gold Fall, Merkel calls for "More Europe", Chinese Gold Demand hits "New Levels"
U.S. DOLLAR gold bullion prices dropped to $1775 an ounce Monday morning London time – a 0.7% drop from Friday's close.
"We see very light volume today," says one Hong Kong gold bullion dealer.
"Gold could test $1800 soon, while the $1750 level provides good support."
On the currency markets, the Dollar gained along with UK and German government bond prices, while European stock markets fell.
Silver bullion fell to $34.20 per ounce – a 1.5% drop from the end of last week – while other industrial commodities were mixed.
Over in Leipzig, German chancellor Angela Merkel repeated calls on Monday for a "new Europe" with greater "political union".
Merkel – who this weekend described as "shameful" a series of murders that have been linked to a group calling itself the National Socialist Underground – said today that Europe is facing its biggest crisis since the end of World War Two.
The solution is "more Europe and not less Europe" Merkel told her CDU party's annual conference.
"The Euro is a failed project that has costs barrels full of money," reckons Dutch politician Geert Wilders. Wilders, whose Party for Freedom is known for its anti-Islam stance, has said he is looking at the implications of the Netherlands returning to the Guilder – the currency it had before joining the Euro.
Spain's Socialist government meantime is set to lose Sunday's general election, according to latest opinion polls, which predict a win for the center-right Popular Party.
Yields on Spanish 10-Year government bonds this morning breached 6% for the first time since the European Central Bank began buying Italian and Spanish debt in early August.
Over in Athens, Greece formally appointed Lucas Papademos as prime minister on Friday, while in Italy Mario Monti – former European Competition Commissioner and adviser to Goldman Sachs – was asked last night to form a new government, following the resignation of Silvio Berlusconi.
"Monti's appointment is clearly a positive for markets," reckons Emmanuele Vizzini, chief investment officer at Milan-based asset management firm Investitori Sgr.
Italy's Treasury successfully sold €3 billion in 5-Year government bonds on Monday. The average yield was 6.29% – up from 5.32% for last month's 5-Year auction.
The ECB stepped up its buying of Italian debt towards the end of last week, according to newswire Reuters. During the crisis it has intervened on the open market to buy government bonds of troubled sovereigns – including Greece, Italy and Spain.
The ECB "must stick to [its] mandate" Jens Weidmann, president of the Bundesbank and a member of the ECB Governing Council, says in an interview published in today's Financial Times.
"[It] must not be a lender of last resort for sovereigns because this would violate Article 123 of the EU treaty" – which prohibits central banks directly funding governments.
"[Europe is having] an absurd debate in which we are telling institutions: don't care about the law...if we now overstep [our] mandate, we call into question our own independence."
The Euro fell nearly 1% against the Dollar on Monday morning, hitting $1.34. The Euro gold bullion price rose to €1304 per ounce – 0.2% up on Friday's close.
"Doubts and uncertainty over the Eurozone are sure to resurface which could see renewed interest in precious metals, especially gold and silver," says Marc Ground, commodities strategist at Standard Bank.
"However, we continue to warn that should the Eurozone debt crisis result in a severe drying up of money markets in Europe, we could see all commodities fall rapidly, even gold."
China meantime should "operate by the same rules as everyone else," US president Barack Obama told reporters Sunday – referring to the alleged undervaluation of the Yuan against the Dollar.
"Enough is enough."
"[It depends] whose rules we are talking about," responded Pang Sen, deputy director general at China's Foreign Ministry.
"If the rules are made collectively through agreement and China is a part of it, then China will abide by them. If rules are decided by one or even several countries, China does not have the obligation to abide by that."
Chinese gold bullion demand meantime continues to show signs of strength.
"There's a lot of material going into China, and New Year demand hasn't even started yet," said a senior executive in the secure logistics industry to BullionVault today from Switzerland.
"This is new, regular and additional traffic [in gold and silver] – levels we haven't seen before."
Ben Traynor
BullionVault
Editor of Gold News, the analysis and investment research site from world-leading gold ownership service BullionVault, Ben Traynor was formerly editor of the Fleet Street Letter, the UK's longest-running investment letter. A Cambridge economics graduate, he is a professional writer and editor with a specialist interest in monetary economics.
(c) BullionVault 2011
Please Note: This article is to inform your thinking, not lead it. Only you can decide the best place for your money, and any decision you make will put your money at risk. Information or data included here may have already been overtaken by events – and must be verified elsewhere – should you choose to act on it.

Saturday, November 5, 2011

Forex Trading 100% Deposit Bonus - November 2011 Promotion

Grab your 100% trading bonus today

Just fund your account with USD500 or more by 30 November 2011 (23:59:59 MT4 Time GMT +2) to be eligible to participate. Open your account here

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You get a 100% trading bonus when you register for the promotion inside your FXPRIMUS member area and then fund USD500 or more in your account by 30 November 2011 (23:59:59 MT4 Time GMT +2) to be eligible.
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The Funding Frenzy Trading Bonus Promotion allows select clients to receive a 100% bonus on new fundings starting 19 September 2011 with the ability to withdraw this bonus provided a certain amount of lots are traded.
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Minimum Deposit Amount:
USD500.00 or equivalent
Maximum Deposit Amount:
USD10,000 or equivalent
Funding deadline to be eligible to qualify for your 100% bonus:
Fund by 30 November 2011 (23:59:59 MT4 Time GMT +2)
Maximum trading deadline to be eligible to qualify for withdrawal after funding:
Trade until 31 January 2012 (23:59:59 MT4 Time GMT +2)

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