Cuts margin on 10 year Irish govt bond to 30% of net positions from 45%.
From Baa1: outlook negative
- Cites increased medium and long term fiscal concerns, external vulnerabilities for Hungary downgrade
- Hungary govt relies on temporary measures; structural budget deficit is set to deteriorate
- Longer term implications of Hungary’s pension system changes are negative for public finances
- May again downgrade Hungary if govt fails to stabilise its financial strength
- Stabilisation of Hungary govt financial strength may be complicated by increased risk aversion from investors, fx pressures
- Could revise Hungary outlook to stable, eventually upgrade rating if country starts sustainable consolidation
- Hungary’s strengths include membership in European Union, strong FDI position
- China, US should strengthen dialog and trust in dealing with sensitive issues
- China highly concerned about situation on Korean peninsula
- Deeply regrets exchange of fire between North, South Korea tha led to casualties
- Korean peninsula situation could escalate out of control if not dealt with properly
Royal Bank of Scotland has advised clients to take out protection against the risk of a sovereign default by China as one of its top trades for 2011. This is a new twist.
Latest from AEP at The Telegraph. Thks to Warwick for heads up.
EUR/USD down at 1.3350 from a North American close Friday up around 1.3415. Inbetween the pairing did manage to get to 1.3452 in ultra-thin early Sydney/Wellington trade, before meeting decent selling from model funds.
Fed’s Bernanke came and went. Whilst he didn’t rule out further QE, his comments were deemed more measured than some had feared. This prompted some dollar shorts to cash in their chips.
European finance ministers have a meeting in Brussels later today, starting at 17:00 GMT. Whether the EU should expand its’ 750 bln euros bailout fund will be a hot topic of discussion, no doubt.
Little in the way of euro zone data today
09:30 GMT: Euro zone investor confidence for December, expected 11.0 from previous 14.0
The 100 dma is noted at 1.3335, with small-ish stops said to be gathered through 1.3330.
- In a television interview Ben Bernanke said that whilst more than $600 bln QE was certainly possible, it was an ongoing policy option.
- Unemployment rate at 9.8% remains a concern
- Fear of inflation greatly exaggerated
- ECB’s Noyer: Financial market’s fears about Ireland will ease
- ECB’s Nowotny: Amputation of states from EU would have massive disadvantages
- Spain’s Salgado: Will not use international bailout mechanism
- Disagreement inside EU on E-bond plans
- Australian TD-MI inflation gauge +3.9% YoY
- Australian job ads +2.9%
- Bernanke: Low CNY bad for US and China
- Regional stockmarkets broadly unmoved, Gold +0.5% at $1412/oz, Oil $89/bbl
EUR/USD closed in NY at 1.3410 and we have spent the Asian session consolidating the big move higher after the NFP data. Fears in the market that Ben Bernanke would announce a much more aggressive QE2 amounted to little and these USD shorts were forced to cover. Additionally, talk of more disquiet within the EU kept the EUR heavy on the crosses. Ranges: EUR/USD 1.3334/1.3420, EUR/CHF 1.3027/95
Most of the movement happened in the EUR with most of the other currency pairs trading in 30 pip ranges. USD/JPY found support in early trade from talk of decent bids ahead of 82.50. Strong bids were also reported in the EUR/JPY around 110.40. Ranges: USD/JPY 82.59/92, EUR/JPY 110.53/111.08
Cable and USD/CHF were quiet with most movement in the crosses. Ranges: Cable 1.5738/74, EUR/GBP .8472/.8511
AUD/USD was unaffected by either the jobs or inflation data and has drifted lower ahead of good sized offers towards .9950. Ranges: .9865/.9926.
Pretty hard to argue with anything in this article, in my very biased opinion.
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