Germany ready to do whatever it takes
Typical of a Monday morning, financial markets are yet to get going so far. The early bias is for further weakness, but so far the selling pressure is mild. The dollar index has reached its highest level since March, while stock markets look like they will struggle at the open.
The pound is continuing to show some relative strength this morning with the EUR/ GBP falling 0.29%. This seems to be more a function of euro weakness than pound strength with the EUR/ USD down 0.25% as the pair heads for levels not seen since January. John Mauldlin has some excellent analysis out in his recent newsletter (H/T Marketbeat: http://blogs.wsj.com/marketbeat/2012/05/13/shades-of-weimar-only-the-ecb-can-save-europe-john-mauldin/)) "Will it buy time? Yes, but time for what? To fix government deficits? To deal with bank debts? Sovereign debt? To somehow solve the massive trade imbalances between Germany and the European periphery? To force voters to accept a fiscal union? In the midst of a crisis? If there is some conspiratorial cabal that has a secret plan, they have kept it well hidden. Because from here it looks like they are making up the ??plan?? as they go along. Their actual intentions are no secret. They will do whatever it takes to keep the European Union and eurozone together. And whatever it takes is a very open-ended plan. But it is going to cost them trillions of euros".
Coming up today we have European industrial production figures at 10.00 with a slight drop in output expected.
The NZD/USD has resumed its trending bias, this time to the downside. The economic outlook remains uncertain, but the odds favour a continuation of the NZD/USD down move.
A good way to play this might be a LOWER trade on BetOnMarkets.com predicting that the NZD/USD closes below 0.7775 in 1 days time. This could return 147% if successful.
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