KRACKER FIND....GOOD FIND!!! THIS REALLY SUMS IT ALL UP....WONDER WHICH ONE WILL "BURP" FIRST????
Five world markets themes in the coming week
Fri Nov 20, 2009 9:57pm IST
LONDON (Reuters) -
Following are five big themes likely to dominate thinking of investors and traders in the coming week and the Reuters stories related to them/
1. BERNANKE SPEAKS OUT
It took a while, but Fed Chairman Ben Bernanke's remarks on the dollar this week finally appear to be sinking into the market. Their timing, wording, similarity to his Barcelona speech last year, and the fact he chose to make them at all are significant. They are significant for all the dollar-related correlation trades that have seen gold, stocks, commodities and emerging markets surge in recent months. Will these correlations now start to fray? Gold and oil already appear to be diverging, while the "risk on" trade is looking increasingly tired. The dollar has been used as the world's funding currency in recent months, and dollar Libor is hitting new lows on a daily basis. But for how long? And what happens if/when dollar Libor starts to inch up above yen or Swiss franc Libor? Financial markets should be complacent at their peril. > Fed's Bernanke watching dollar drop closely Bernanke gets defensive about the U.S. dollar. Euro zone officials back Bernanke on strong dlr
2/ EURO AT $1.50. DOES CHINA HOLD THE KEY?
Can the euro regain its upward momentum, break and finally hold above $1.50? The Fed is going nowhere on rates for a very long time, perhaps not even until 2012. Or will Bernanke's remarks (echoed by Fisher, Lacker, Trichet and Juncker - a coincidence?) put that idea to rest? Options pricing suggests traders are comfortable with recent ranges and see no break soon, although a move lower would trigger more volatility than a break to the upside. As ever, China could be key here. Initial indications are that Obama did not get much from his visit, but some analysts say a gesture or move from Beijing could be the catalyst for a sustained euro move above $1.50. On the other hand, a yuan revaluation might boost Asian currencies vs the dollar and ease the upward pressure on the euro and other free-floating currencies. Obama's been and gone, now it's Trichet's turn to visit Beijing, on November 28. > China's caution on yuan signals no early move >Euro zone to urge China for more flexible FX > Yuan move could up emerging FX gains; knock euro
3/ GROWING PAINS?
Markets will have plenty of clues to the pace of economic recovery in the coming week, with key data due including euro zone flash PMIs, the German IFO index and euro zone business and consumer sentiment indices along with revisions to UK and German GDP numbers. The OECD in its latest Economic Outlook expects global growth of 3.4 percent next year after a 1.7 percent contraction in 2009 but investor nerves were rattled on November18 by below-forecast U.S. housing starts numbers, which knocked stocks. With the expectation of a return to growth a key factor in the recent rally in risk assets, further downside surprises would cast a pall. Corporate results from Porsche and Tiffany will also give a flavor of sentiment among the well-heeled. The OECD also sees debt exceeding GDP in its member countries in 2011. Bond markets have already shown their concern at Greece's deficit and the Greek/Bund yield spread and credit default swaps will be closely watched. Euro zone heavyweight France is also triggering some concerns with its plan to issue a special loan. The OECD said that would complicate long-term efforts to improve the country's fiscal position. > Asia helps feeble West in global recovery -OECD> Greece aims for 9.1 pct deficit in 2010 budget > French commission eyes priorities for "big loan"
4/ SUBMERGING RISK APPETITE
Staying with risky assets, a flood of hot money into emerging markets has led a number of countries, including Brazil, South Korea and Taiwan, to impose capital controls. These and other nerves in the emerging sector have rattled investors in some bigger markets, prompting some to take risk off the table, especially with the year-end looming. The high-yielding Australian and New Zealand dollars will be in focus and the VIX volatility index leapt this week. But it is worth noting that options show market participants are not yet worried about big reductions in risk appetite in the near term. > Controls prompting gradual rethink on emerging markets> FX options show risk appetite intact to yr-end > Stories on global flows, investment strategy
5/ EDGING TO THE EXIT
They may well keep interest rates on hold at virtually zero for months on end -- maybe even into 2012 as the Federal Reserve's Bullard was interpreted as suggesting and the Bank of England's dovish inflation outlook seemed to indicate -- but central banks appear to already be in the very early stages of exit strategies. Policymakers at the very least are preparing the market for the eventual withdrawal of the huge quantities of emergency liquidity they have provided. In this context, year-end deleveraging could be a big driver for FX rates and flattening of government bond yield curves in coming weeks. > Fed eyes dollar drop, hews to low-rate pledge > Fed's Bullard says shrinking reserves key to exit > BoE split 3 ways on QE, mulled reserves change> Trichet warns banks risk addiction to support
The weekly item on key financial market themes for next week can be retrieved by using MKT/THEMES code on a news search.
(Compiled by Nigel Stephenson; Editing by Patrick Graham)
Five world markets themes in the coming week
Fri Nov 20, 2009 9:57pm IST
LONDON (Reuters) -
Following are five big themes likely to dominate thinking of investors and traders in the coming week and the Reuters stories related to them/
1. BERNANKE SPEAKS OUT
It took a while, but Fed Chairman Ben Bernanke's remarks on the dollar this week finally appear to be sinking into the market. Their timing, wording, similarity to his Barcelona speech last year, and the fact he chose to make them at all are significant. They are significant for all the dollar-related correlation trades that have seen gold, stocks, commodities and emerging markets surge in recent months. Will these correlations now start to fray? Gold and oil already appear to be diverging, while the "risk on" trade is looking increasingly tired. The dollar has been used as the world's funding currency in recent months, and dollar Libor is hitting new lows on a daily basis. But for how long? And what happens if/when dollar Libor starts to inch up above yen or Swiss franc Libor? Financial markets should be complacent at their peril. > Fed's Bernanke watching dollar drop closely Bernanke gets defensive about the U.S. dollar. Euro zone officials back Bernanke on strong dlr
2/ EURO AT $1.50. DOES CHINA HOLD THE KEY?
Can the euro regain its upward momentum, break and finally hold above $1.50? The Fed is going nowhere on rates for a very long time, perhaps not even until 2012. Or will Bernanke's remarks (echoed by Fisher, Lacker, Trichet and Juncker - a coincidence?) put that idea to rest? Options pricing suggests traders are comfortable with recent ranges and see no break soon, although a move lower would trigger more volatility than a break to the upside. As ever, China could be key here. Initial indications are that Obama did not get much from his visit, but some analysts say a gesture or move from Beijing could be the catalyst for a sustained euro move above $1.50. On the other hand, a yuan revaluation might boost Asian currencies vs the dollar and ease the upward pressure on the euro and other free-floating currencies. Obama's been and gone, now it's Trichet's turn to visit Beijing, on November 28. > China's caution on yuan signals no early move >Euro zone to urge China for more flexible FX > Yuan move could up emerging FX gains; knock euro
3/ GROWING PAINS?
Markets will have plenty of clues to the pace of economic recovery in the coming week, with key data due including euro zone flash PMIs, the German IFO index and euro zone business and consumer sentiment indices along with revisions to UK and German GDP numbers. The OECD in its latest Economic Outlook expects global growth of 3.4 percent next year after a 1.7 percent contraction in 2009 but investor nerves were rattled on November18 by below-forecast U.S. housing starts numbers, which knocked stocks. With the expectation of a return to growth a key factor in the recent rally in risk assets, further downside surprises would cast a pall. Corporate results from Porsche and Tiffany will also give a flavor of sentiment among the well-heeled. The OECD also sees debt exceeding GDP in its member countries in 2011. Bond markets have already shown their concern at Greece's deficit and the Greek/Bund yield spread and credit default swaps will be closely watched. Euro zone heavyweight France is also triggering some concerns with its plan to issue a special loan. The OECD said that would complicate long-term efforts to improve the country's fiscal position. > Asia helps feeble West in global recovery -OECD> Greece aims for 9.1 pct deficit in 2010 budget > French commission eyes priorities for "big loan"
4/ SUBMERGING RISK APPETITE
Staying with risky assets, a flood of hot money into emerging markets has led a number of countries, including Brazil, South Korea and Taiwan, to impose capital controls. These and other nerves in the emerging sector have rattled investors in some bigger markets, prompting some to take risk off the table, especially with the year-end looming. The high-yielding Australian and New Zealand dollars will be in focus and the VIX volatility index leapt this week. But it is worth noting that options show market participants are not yet worried about big reductions in risk appetite in the near term. > Controls prompting gradual rethink on emerging markets> FX options show risk appetite intact to yr-end > Stories on global flows, investment strategy
5/ EDGING TO THE EXIT
They may well keep interest rates on hold at virtually zero for months on end -- maybe even into 2012 as the Federal Reserve's Bullard was interpreted as suggesting and the Bank of England's dovish inflation outlook seemed to indicate -- but central banks appear to already be in the very early stages of exit strategies. Policymakers at the very least are preparing the market for the eventual withdrawal of the huge quantities of emergency liquidity they have provided. In this context, year-end deleveraging could be a big driver for FX rates and flattening of government bond yield curves in coming weeks. > Fed eyes dollar drop, hews to low-rate pledge > Fed's Bullard says shrinking reserves key to exit > BoE split 3 ways on QE, mulled reserves change> Trichet warns banks risk addiction to support
The weekly item on key financial market themes for next week can be retrieved by using MKT/THEMES code on a news search.
(Compiled by Nigel Stephenson; Editing by Patrick Graham)