January 28th, 2011 17:15:19 GMT

Germany’s Merkel: If Euro Fails, Europe Will Fail


FRANKFURT (MNI) – German Chancellor Angela Merkel invoked another
passionate defense of the European currency in a speech at the World
Economic Forum in Davos on Friday.

“The euro is our currency, it is much more than just a currency, it
is the embodiemmnent of Europe today,” she told gathered delegates.
“Should the euro fail, Europe will fail.”

[TOPICS: M$X$$$,M$G$$$,MGX$$$]

January 28th, 2011 17:07:12 GMT

The revolution IS being televised…


I had an inkling this thing might get ugly, but it has really hit the fan…

Emerging markets are getting hammered as risk aversion rises. Commodity currencies could be the next shoe to drop…

Oil is up nearly $4, gold is $35 dollars off its lows for the day and The S&P is weaker by 1.5% as Egypt spins out of control.

January 28th, 2011 17:02:39 GMT

Stops loom at 1.3570


EUR/USD fell as low as 1.3598 and oil goes to the moon., now up $3.67 to $89.25.

A concentration of trailing stops is seen in the 1.3565/701 area, dealers relay.

January 28th, 2011 16:59:12 GMT

EUR/USD slides as low as 1.3602


The profit-taking slide in EUR/USD, sparked by the intensification of rioting in Egypt to the point where the government teeters in the balance, has reached 1.3602 so far. Heavy selling of EUR/CHF helped set the slide in motion as traders looked for logicl safe-havens.

Oil, gold and US Treasuries have all been bid up on the unrest. Oil is now up nearly $3, gold is over $1340 and Treasuries are down to a 3.32% yield from 3.45% after the US GDP data earlier in the day.

US share prices are down 1.5%, selling off from a close near 1300 yesterday.

January 28th, 2011 16:43:06 GMT

Merkel: French G20 agenda “exactly right”


  • G20 needs to concentrate on currency systems
  • Exchange rates need to reflect currencies strengths
  • Germany, Mexico studying currency systems
  • We need to regulate more, she says in Davos
  • Need to combat commodities speculation
  • If euro fails, Europe fails
  • We are going to defend the euro, will show solidarity with neighbors

Merkel is a right-winger in Europe…Can’t imagine what the left wants…

January 28th, 2011 16:28:59 GMT

Reuters: Ruling party HQ on fire in Cairo


UPDATE at 16:38 GMT: Reuters reports the sound of gun shots on central Cairo. A curfew is now in effect.

Oil is up $2.25 and Gold has reasserted its safe-haven status and is not up to $1335 from below $1310 earlier today.

January 28th, 2011 16:25:11 GMT

Applications Flood In To Replace BOE MPC Sentance: Recruiters


LONDON (MNI) – The deadline for job applications to replace Bank of
England Monetary Policy Committee member Andrew Sentance expires on
Monday and those handling the process say interest in the position is

Sentance, who alone voted for a rate hike from last June through to
December, leaves the MPC at the end of May with his successor’s term
expected to commence on June 1.

UK Chancellor of the Exchequer George Osborne will be responsible
for choosing a successor. Some well-qualified and high-profile names
from the academic and financial fields are in the frame.

In addition to advertising in The Economist, the Treasury has
emailed potential candidates for the post, which pays a basic stg131,771
a year. The official at the head of the selection process is Dave
Ramsden, the Treasury’s Managing Director of Macroeconomic and Fiscal
Policy, although the final say will rest with Osborne.

Economists pointed out that the change of government in May could
have opened the door to some candidates who were, for one reason or
another, not popular with the former Labour administration.

The current Conservative administration has, so far, only made one
MPC appointment – Martin Weale. Weale, a former Cambridge academic and
head of the National Institute of Economic and Social Research, was long
seen as a likely MPC member but was never picked under Labour but was
then promptly appointed by the Conservatives.

It is understood that former Chancellor Gordon Brown vetoed Weale’s
appointment. When asked earlier this year about whether that was the
case and why he thought it had happened, Weale said that he did not know
and that would be better to put that question to Brown.

Well-established academics mentioned by fellow economists as
potential MPC recruits this time around include Simon Wren-Lewis, a
professor at Oxford University, with a speciality in macroeconomic
models and exchange rates.

Wren-Lewis has carried out plenty of advisory work for the
Treasury, including assessing the tests for euro entry, and the BOE,
where he has been an external advisor on its core macromodels.

Another Oxford professor well known in the Treasury is John
Muellbauer, who has come up with plenty of controversial work on the
housing market.

Muellbauer would certainly shake things up – he argued in one paper
“the econometric models used by central banks and the mind-set they
represent have contributed to policy failings in dealing with the global
economic crisis.”

Another UK based economist who is highly regarded among peers is
John Llewellyn, whose CV boasts a decade at Cambridge University
followed by 17 years at the Organisation for Economic Co-operation and
Development (OECD) where he was in charge of international economic
forecasting and became chief of staff and 14 years at the top of Lehman
Brothers economics team.

People who have worked with Llewellyn, who now runs his own
consultancy, say he would be a superb choice but question whether he
would want the position.

Female Appointment?

There is also speculation the Treasury could seek to break up
the current male monopoly on the committee.

High up the list of potential female members is Vicky Pryce, a
former Joint Head, along with Dave Ramsden, of the UK Government
Economic Service.

Pryce has just moved to the private sector, as managing director at
finance consultancy firm FTI.

Sheila Dow, a professor at the University of Stirling, who has
advised the Treasury Select Committee, is another possible.

Lucrezia Reichlin, former director of research at the European
Central Bank and presently a professor at the London Business School,
could well be another who is in with a chance.

When Weale’s job was advertised, out of 38 applicants, just four
were women.

Interviews are expected to take place in the week commencing 14
February 2011. The successful candidate will be announced at the end of
February 2011 and the appointment is expected to commence on 1 June

This timetable suggests that the Treasury will be in a position to
make an appointment announcement well ahead of the end of Andrew
Sentance’s MPC term.

The open competition for the post these days is in contrast to the
secrecy which marked former Chancellor Gordon Brown’s approach to MPC
appointments. Under Brown appointments to the MPC tended to be a long
drawn-out process and commentators found some of his later selections

–London newsroom 4420 7862 7492; email: drobinson@marketnews.com

[TOPICS: M$B$$$,MT$$$$,M$$BE$]

January 28th, 2011 16:13:58 GMT

Oil flying; yields tumbling


Oil is up near $2.50 on the day, back above $88 on fears of disruptions in the Middle East. The S&P is down near 0.9% and US yields are 10 bp off earlier highs, now at 3.35%.

Treasuries and the Swiss franc are he clear safe-havens of choice today. EUR/CHF is down to 1.2845.

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