Posts Tagged ‘Mario Singh’

Cut in Aussie Cash Rate Likely

February 7, 2012 by · Leave a Comment
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(As written for My Paper on 7 February 2012. Click here to enlarge)

Last week, US government data beat all estimates when it reported that Non-Farm Payrolls rose by 243,000 in January. The official figures easily surpassed the 140,000 estimate by economists.

Additionally, the unemployment rate came in at 8.3%, the lowest level in nearly 3 years. This also recorded the fifth consecutive month of falling unemployment in the US.

Immediately after the announcement, yields on 10-year US Treasuries spiked up 10 basis points to 1.92%, and the EUR/USD dropped over 100 pips. Read more…

Greek Creditors Open to Bigger Haircut

January 31, 2012 by · 3 Comments
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(As written for My Paper on 31 January 2012 issue. Click here to enlarge)

After intense negotiations at the recent World Economic Forum in Davos, Switzerland, a deal with Greek bondholders seems imminent.

In October 2011, the bondholders agreed to take a 50% cut in the face value of their bonds, worth more than 200 billion Euros. In simple terms, this means that bondholders will only be paid 100 billion Euros once the debt matures, effectively shaving off 100 billion Euros off Greece’s debt load. Read more…

Euro Trades Squarely On News

January 17, 2012 by · 4 Comments
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(As written for My Paper on 17 January 2012 issue. Click here to enlarge)

What a week it has been for the Euro.

Mid-week, ECB chief Mario Draghi gave a press conference, stating that the bank’s policy of extending low interest loans to financial institutions had been successful in stabilizing the region’s credit markets.

Proof of his statement was seen in the recent Spanish and Italian bond auctions, which saw solid demand for their respective paper. In fact, Spain had doubled the size of their offering.

This caused the EUR/USD to rally to 1.2879 on Friday.

However, the party came to an abrupt halt late last week when news about the S&P downgrade of top European nations hit the wire. Read more…

US Likely to Outperform Europe in H1

January 10, 2012 by · 4 Comments
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(As written for My Paper for 10 January 2012 issue. Click here to enlarge)

It’s good to be back in the currency market after a three week break.

For my first article of 2012, let’s take a snap-shot of the world’s biggest economies to see how they fared for 2011. This can give us excellent insight into how they might perform at the start of 2012.

According to the list by the International Monetary Fund for 2011, the top 3 economies (by country) are as follows:

1. USA: USD 15.06 trillion

2. China: USD 6.99 trillion

3. Japan: USD 5.86 trillion

Read more…

Risk Rally Not Sustainable

December 6, 2011 by · 6 Comments
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(As written for My Paper on 6 December 2011. Click here to enlarge)

There were two headlines late last week that caused a rally in the risk currencies.

Firstly, it was the surprise announcement by the major central banks to boost liquidity. In a coordinated action to ease credit lending, six central banks agreed to reduce the cost of temporary dollar loans offered to banks by half a percentage point. The facility, called liquidity swaps, began yesterday and will run through to 1 February 2013.

Will the risk rally be sustainable? Not in my view – and here’s why. Read more…

AUD/USD bias still to the downside

November 29, 2011 by · 8 Comments
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(As written for My Paper on 29 November 2011. Click here to enlarge)

Traders and investors are highly concerned about the on-going debt crisis in Europe.

What is the one crucial clue that is a clear indicator that risk? The clue lies in bond yields.

By definition, a bond yield is the return an investor would earn if a bond was purchased and held to maturity.

It also represents the interest the bond issuer has to pay to borrow the money. Suffice to say, the higher the yield, the more money the issuer has to stump out to repay the bondholders.

What drives yields up or down? Read more…

Downside bias seen for AUD/USD

November 22, 2011 by · 19 Comments
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(As written for My Paper on 22 November 2011. Click here to enlarge)

Last week, the Monetary Authority of Singapore said that the global economy and financial system are at their most fragile state since the 2008 crisis, with the immediate outlook characterised by a high degree of uncertainty.

Not the most encouraging words for traders and investors to hear, but recent data from the various industries seem to agree. Read more…

Welcome Change in Europe

November 15, 2011 by · 6 Comments
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(As written for My Paper on 15 November 2011. Click here to enlarge)

The countries which make up the “PIGS” – Portugal, Italy, Greece and Spain, have new leaders.

Portugal is headed by Prime Minister Pedro Passos Coelho, after Jose Socrates resigned in March.

Greek Prime Minister George Papandreou resigned last week to make way for a coalition led by European Central Bank Vice President Lucas Papademos.

Former European Union competition commissioner Mario Monti, has become Italy’s new Prime Minister following the resignation of Silvio Berlusconi.

Spanish Prime Minister Jose Luis Rodriguez Zapatero has decided not to seek re-election and polls show Mariano Rajoy, leader of the conservative People’s Party, will win an absolute majority in the 20 November vote. Read more…

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