2012-02-26T09:52:21+0000

All|Economic Data|Europe|Regions

EU economy|Global economy|IMF|oil

Gerry Davies

18 Comments

  1. and ESFS will be 1trln… right? ;)

  2. I suppose this news should be USD negative….? what other think? risk on, right?

  3. otherwise, the mass media arithmetic always fascinated me:

    “An agreement by Europe to merge its temporary and permanent bailout vehicles would create a $1 trillion war chest and open the door for other G20 countries to meet the IMF’s request for $500-$600 billion in new resources, on top of its current $358 billion in funds.” – now, either ESFS or ESM was already counted. So 500M already existed(and are already spent or accounted for). IMF 358 blns are already spent. So it’s a hypothetical 1trln at most – 500bln esm and 500bln IMF(assuming both Germany and everyone else cough up at the max. – a totally ridiculous assumption, but whatever – not like anyone has that kind of money).

    But I guess writing 2 trln trumps all maths…

  4. Headline $2 trillion, but not included in communique :) Wonder if this figure was put out for the FX Algos that start up Sunday night. Just got to wonder how many of these MinFins have FX trading accounts.

  5. a big headline (guess the reuters reporters must be risk on into the weekend).
    If I understand correctly this is all conditioned on the premise that the Europeans themselves put up more money. If you remember it was a pretty hard effort last time with 2 parliaments (Slovak, Finnish) voting no in the first round when they were forced under pressure from EC to vote Yes at the end (basically ridiculed the democratic principle). You think this time it will be an easy ride?

  6. So EUR/USD gonna shoot up to 1.37 monday. Guys get ready for your cakes. Next week end will be 1.40 for sure

  7. There are nothing concrete decided, yet the article headline makes it sound like a deal to be signed… who is going to provide the money? China pulling 1/3 of its reserves from US and Jap bonds? 1 trillion was more than enough last time, they say; why should we believe 2 trillion is enough this time?

    Maybe the officials realize that actually getting the money is not possible; while talking big is an infinitely cheaper way to prop up the market.

  8. GalantnostS – that’s what they do for two years already…?

  9. Hi guyz, to me it sounds that they have decided not to decide anything. Which is a little bearish for the euro. We should see a small correction towards 1.340 of the EURUSD. Otherwise, if Germany decides to invest even more money in the great firewall of europe, this will be extremely bullish for the euro, the eurozone, the world economy…

    But Germany won’t do that. Why? Because that’s not fun. You can’t kick in the ass all these laizy southern europeans if you have such a firewall ;-)

  10. EUROPE is broke & this all is make believe remedies.Europe needs to act like USA–bring workers, brains,money,technology from overseas & stopt treating workers as third class tax payers.For benefits to be paid to existing citizens
    some one has to DIG ditches & that is not going to be ELITE citizens(otherwise
    there would have been no problem to start with) OLD EMPIRES are coming down & europe needs WORKERS.Germany has them & germans are not going to work in rest of europe.ONE worker can not pay for 3 retirees & all the programs& the politicians & colonies are GONE.May be europeans should immigrate to third world & start working like the little people from dawn to dawn.ROMAN EMPIRE is burning & KINGS are busy in the HAREMS.That is my 2 cents.A visit to GERMAN FACTORITIES might help.

  11. What impact do you all think this will have to audusd and usdcad at the open tonight? Are we going to see respective rallies in these pairs? Thanks

  12. The short term solution does require a multi-lateral approach due to the size and nature of the near term issues (and associated global consequences). But the longer-term solution will require more of the individual countries who are in the mess to develop more sustainable policies, do the hard work, and push for growth reforms (which actually could be helped by a push toward mending global imbalances).

  13. What is your forecast for EURUSD after reading these two articles:

    1- Germans overwhelmingly oppose Greek bailout: poll
    http://www.cnbc.com/id/46530495

    2- Comments from G20 finance chiefs meeting in Mexico
    http://www.reuters.com/article/2012/02/26/us-g20-highlights-idUSTRE81P0D120120226

  14. vlad – you are right… I guess my hoping for their yapping to finally stop is as hopeless as the actual situation..

  15. For some reason I feel there is going to be some serious chaos in the next few weeks.

    In terms of Eur/Usd i think we will see a pullback next week and we could see 1.32

  16. Just read the Bloomberg story, and it was quite negative. Looks like the G20 told the Eurolanders (read Germans) to show them the money. Can’t see how this could be Euro positive (well maybe less supply of Euro’s) in the present market narrative. :)

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