Monday, December 12, 2011

Eurousd -upward biased.

Expect Euro to move up as it is oversold and macd shows upward biased.

Wednesday, December 7, 2011

'No Way' Europe Will Hold Itself Together: CIO

The European debt crisis has revealed that the euro zone is in a final phase and cannot be saved as a single entity, David Murrin, chief investment officer at Emergent Asset Management, told CNBC.

"Europe is in a terminal phase of its life. There is no way I can see a glomeration being a successful way of smaller entities into bigger entities without growth. There will be fractures. (There is) no way Europe is ever going to hold it together," Murrin said.

He added that the management of the crisis by European leaders had now become desperate.

"It's fascinating watching the European politicians desperately trying to hold the system together, which is bankrupt financially and in terms of its mechanisms for encouraging growth economies that move forward. Now they have to make pacts with each other, their desperation is very apparent," he said.

However, he said that Germany—which is in an incredibly strong position now—will never let anything lower its standard of living, but the "end phase" for Europe had already begun.

"We're right in the end phase right now. The general appreciation of these constant political meetings which produce absolutely nothing is that there is no substance behind the proposals with European leaders," Murrin said. Read more

Friday, December 2, 2011

Ten days of secret planning to rescue markets

Ten days of secret planning to rescue markets
December 02, 2011

Bank of England governor Mervyn King presents the Financial Stability Report in London December 1, 2011. — Reuters pic
LONDON, Dec 2 — Britain orchestrated this week’s bold move by central banks to stave off a cash crunch in global markets, helping drive a plan that began to take shape around 10 days ago.
For months, central bankers have tracked with growing concern how the deleveraging among European banks, hurt by the tumbling value of euro-zone debt, was hurting global funding as banks sold off assets and brought cash back home.

Indeed, some central banks had urged the Federal Reserve for some months to put in place cheaper dollar funding, but the Fed had resisted, said a source with direct knowledge of this week’s deal.

Last week, conditions grew particularly acute after a German bond auction failed to attract enough buyers. The Federal Reserve and the European Central Bank started serious discussions around the middle of last week, banking officials in Europe and the United States told Reuters.

Bank of England Governor Mervyn King said he called the meetings that led to the decision by six of the world’s major central banks to cut dollar funding rates to keep money flowing through the world’s financial arteries.

“It was the result of conversations which I initiated as chairman of what used to be known as the G10 governors, now the economic consultative committee, among a limited number of central banks,” he told a news conference in London yesterday. Read More

Tuesday, November 29, 2011

Moody’s Signals Possible Cut for Europe Banks

Banks in 15 European nations, including the largest lenders in France,Italy and Spain, may have their subordinated debt ratings cut by Moody’s Investors Service Inc. to reflect the potential removal of government support.

All subordinated, junior-subordinated and Tier 3 debt ratings of 87 banks in countries where the subordinated debt incorporates an assumption of government support were placed on review for downgrade, the ratings company said in a statement today. The subordinated debt may be cut on average by two levels, with the rest lowered by one grade, Moody’s said.

Lenders in Spain, Italy, Austria and France have the most ratings to be reviewed as governments in Europe face limited financial flexibility and consider reducing support to creditors, the rating company said. Moody’s has said that a “rapid escalation” of Europe’s sovereign debt crisis threatens the entire region. U.S. President Barack Obamarenewed pressure on European leaders to prevent a dismantling of the euro. More

American Airlines Parent AMR Files for Bankruptcy

AMR, the parent company of American Airlines, filed for voluntary Chapter 11 bankruptcy protection in a New York court on Tuesday.

American Airlines
AP

The company [AMR 1.62 0.01 (+0.62%) ]listed assets of about $24.72 billion, while it has liabilities of $29.55 billion. more

Monday, November 28, 2011

Further consolidation for KL stocks in near term

Mah Sing, MRCB, UEM Land and Dialog should see stronger buying interest on dips for medium-term gains, says a head of research.


Blue chips extended their slump for a fourth week in volatile trade as investors shunned the local stock market due to worries over further downside volatility in global markets. The lower-than-expected US third quarter GDP growth of two per cent, contraction in China factory output, disappointing German bond auction and resistance from Germany on the issuance of euro-bonds to contain the debt crisis all combined to dampen sentiment last week.

As a consequence, the blue-chip benchmark FTSE Bursa Malaysia Kuala Lumpur Composite Index (FBM KLCI) slumped 22.85 points, or 1.57 per cent last week to 1,431.55, with about 70 per cent of the losses coming from Maybank (-30 sen), Genting Bhd (-58 sen), MISC (-65 sen) and Petronas Chemicals (-26 sen). Average daily traded volume and value declined to 1.45 billion shares and RM1.1 billion from 2.18 billion shares and RM1.45 billion in the previous week. Trading momentum on the ACE Market and in penny stocks dwindled further as they fell into correction mode.

External concerns dictated the FBM KLCI's direction last week and this trend will last. Issues stemming from Europe continue to evolve and do not show any signs of dissipating anytime soon. There are no easy solutions either with even the bigger and stronger European countries trying to walk a tight rope, worried that any wrong moves will affect them as well. Germany's failure to secure takers for all its bonds in an auction last week underscored reducing risk appetite among investors if the return from the corresponding investment does not match its risk profile. So, it is not surprising to see Germans being adamant in not wanting a joint eurobond as it is tantamount to the largest economy in Europe carrying the burden of guarantee on its shoulders.



Read more: Further consolidation for KL stocks in near term http://www.btimes.com.my/Current_News/BTIMES/articles/marketoutlooknov28/Article/index_html#ixzz1ez04Vgo2

Saturday, November 26, 2011

KL stocks expected to head south

Share prices on Bursa Malaysia are expected to be lower next week with the market barometer, FTSE Bursa Malaysia KLCI (FBM KLCI), likely to hover around the 1,400-level due to deteriorating outlook in global markets.

Affin Investment Bank head of retail research, Dr Nazri Khan, said more downside risk remained in view of the lack of confidence in the market on fears of the impact from the escalating debt crisis in Europe.

"More investors are unlocking European assets because they expect tough capital requirement for European business with rising funding cost," he said.

He said the local bourse now was oversold and counters looked cheap.


"However, there is no short-term profit. People are looking for markets to calm down and for the debt crisis in Europe to end. However, this will take time," he said.

Nazri said currently, there were no new leads to boost the local market and external factors would still dominate sentiment.

During the week just-ended, the local bourse was mostly lower reflecting weaknesses in regional markets dominated by fears of escalating debt crisis in Europe and the still fragile US economy.


Read more: KL stocks expected to head south http://www.btimes.com.my/Current_News/BTIMES/articles/20111126112036/Article/index_html#ixzz1emwlWioZ

Monday, November 21, 2011

Moody's Warns On French Rating Outlook

A rise in interest rates on French government debt and weaker growth prospects could be negative for the outlook on France's credit rating, Moody's warned in a report on Monday, adding to pressure on European debt markets.

France
Zap Art | The Image Bank | Getty Images

Worries that France has the weakest economic fundamentals among the euro's six AAA-rated countries have drawn the euro zone's second largest economy into the firing line in the debt crisis this month.

The rating agency said the deteriorating market climate was a threat to the country's credit outlook, though not at this stage to its actual rating.

"Elevated borrowing costs persisting for an extended period would amplify the fiscal challenges the French government faces amid a deteriorating growth outlook, with negative credit implications," Senior Credit Officer Alexander Kockerbeck said in Moody's Weekly Credit Outlook dated Nov.21.

"As we noted in recent publications, the deterioration in debt metrics and the potential for further liabilities to emerge are exerting pressure on France's creditworthiness and the stable outlook (though not at this stage the level) of the government's Aaa debt rating," the Moody's note read.

The yield differential between French and German 10-year government bonds rose above 200 basis points last week, a new euro-era high. Read more

Thursday, October 27, 2011

Euro Zone Strikes Deal on 2nd Greek Package, EFSF

Euro zone leaders struck a deal with private banks and insurers on Thursday for them to accept a 50 percent loss on holdings of Greek government bonds as part of a plan to lower Greece's debt burden and try to contain the two-year-old euro zone crisis.

M. Lorden | Taxi | Getty Images

In an agreement reached after more than eight hours of sometimes harsh negotiations, the private sector said it would voluntarily accept a nominal 50 percent cut in its investments to reduce Greece's debt burden by 100 billion euros, cutting its debts to 120 percent of GDP by 2020, from 160 percent now.

At the same time, the euro zone will offer "credit enhancements" or sweeteners to the private sector totaling 30 billion euros. The aim is to complete negotiations on the package by the end of the year, so that Greece has a full, second financial aid program in place before 2012.

The value of that package, EU sources said, would be 130 billion euros — up from 109 billion euros when a deal was last struck in July, an agreement that subsequently unraveled.

"The summit allowed us to adopt the components of a global response, of an ambitious response, of a credible response to the crisis that is sweeping across the euro zone," French President Nicolas Sarkozy told reporters afterwards. Read more

Friday, October 14, 2011

Asian Stocks Decline as Spain Downgrade Deepens Global Recovery Doubts

Asian stocks fell, ending a six-day winning streak for a regional benchmark index, after Standard & Poor’s cut Spain’s credit rating, fueling concern Europe’s debt crisis will continue to weigh on Asian economies and corporate earnings.

The MSCI Asia Pacific Index dropped 0.3 percent to 117.38 as of 9:09 a.m. in Tokyo, snapping a 9.7 percent advance over the previous six days. The gauge climbed four days this week after German Chancellor Angela Merkel and French President Nicolas Sarkozy pledged at the weekend to deliver a plan to recapitalize banks and address Greece’s debt crisis. Read more

Spain Credit Rating Downgraded One Notch by S&P

Ratings agency Standard and Poor's downgraded the long-term credit rating of Spain by one notch to "AA-" from "AA" with a negative outlook, due to weak growth, tightening fiscal conditions and high private sector debt.

Spain
Grant Faint | The Image Bank | Getty Image

"Despite signs of resilience in economic performance during 2011, we see heightened risks to Spain's growth prospects due to high unemployment, tighter financial conditions, the still high level of private sector debt, and the likely economic slowdown in Spain's main trading partners," S&P said in a statement.

It added it expected continuing deterioration in financial system asset quality while the incomplete state of labor-market reform will contribute to structurally high unemployment that will be drag on economic recovery.

Friday, October 7, 2011

US Facing 'Dangerous' Threat From Euro Debt: Greenspan

The U.S. economy and stock market face severe consequences from the European financial crisis, which will not resolve itself without major debt restructuring, former Federal Reserve Chairman Alan Greenspan said.

Alan Greenspan
CNBC

"I think it's very dangerous," Greenspan said in a CNBC interview. "Everyone's got their fingers crossed."

As global policy makers struggle to find a solution to the daunting problems Greece and other nations face with sovereign debt[cnbc explains] , the primary debate in the U.S. is how much contagion there will be for the domestic economy.

For Greenspan, there is no question: The threat from Europe is real and it is substantial.

While U.S. banks don't have a comparatively high level of exposure to the sovereign debt itself, he said the domestic financial system is nevertheless reliant on the stability of its European counterparts.

The stock market, meanwhile, has been heavily influenced on the daily news reports coming out of Europe and the plethora of proposed solutions that emerge. Read more

Wednesday, October 5, 2011

Moody's slashes Italy credit rating

(Reuters) - Moody's lowered its rating on Italy'sbonds by three notches on Tuesday, saying it saw a "material increase" in funding risks for euro zone countries with high levels of debt and warning that further downgrades were possible.

The agency downgraded Italy to A2 from Aa2, a lower rating than it holds on Estonia and on a par with Malta and kept a negative outlook on the rating.

The euro pared gains against the dollar and Japanese yen immediately following the announcement which comes after Moody's rival Standard and Poor's cut its rating on Italy by one notch to A/A-1 on September 19.

The cuts underline growing investor concern about the euro zone's third largest economy, which is now firmly at the center of the debt crisis and dependent on help from the European Central Bank to keep its borrowing costs under control. Read more

Greek Default 'Inevitable': Former Government Minister

As strikes threatened to bring struggling Greece to a standstill Wednesday, pessimism about the future of the euro zone--in its current form, at least--continued to plague the Continent.

Mike Kemp | Getty Images

Speculation that the Mediterranean country would have to default on its debt repayments has grown in recent days, after the government there announced that it will not meet deficit reduction targets for 2011.

If Greece were to default, it would hit the balance sheets of many European banks, and potentially even lead to the end of the euro[EUR=X 1.3304 -0.0043 (-0.32%) ] itself.

Petros Doukas, a former Greek deputy finance minister, told CNBC Wednesday that default is "inevitable" and called for an "organized" and "orderly" haircut on the debt to try and stop a run on the banks in the event of a default.

"The capacity of the Greek people to pay taxes is really at the limit," he said. "People like me are paying taxes out of their savings and by selling off assets, not by generating new income."

Greece needs to reduce its deficits and start selling off state-backed assets in order to meet the terms of a second bailout by the International Monetary Fund (IMF) [cnbc explains] and the European Central Bank, agreed upon in July. However, the Greek protestors are chafing at government-imposed austerity measures. Read more

Wednesday, September 28, 2011

forex-Eurousd

As expected, it rebounded and more upwards. More upside expected before moving further down.

Sunday, September 25, 2011

Global Stocks in Bear Market, And US Is Probably Next

Global stocks officially entered a bear market this week as the benchmarkMSCI World Index fell more than 20 percent from its most recent high in May. Investors say the U.S. is next.

Darrell Gulin | Stone | Getty Images

The selloff—which pushed markets from China to Portugal into bear territory—came as fears of a Greek default escalated and economic data around the globe hinted at a worldwide recession.

“You can make an easy argument that theDow Jones Industrial Average [.DJIA 10771.48 37.65 (+0.35%) ] will play catch up by 10 percent to other developed nations,” said Dan Nathan, an options and equities trader who runs Riskreversal.com. “Sixteen of the Dow 30 get more than 25 percent of their revenues from Europe. Something has to give because if 2008 taught us anything, it is that developed economies do not de-couple.”

The Dow hit its bull market high on April 29, closing at 12,810.54. The benchmark Friday is about 17 percent off from that high after its worst week in almost two years. Read more

Art Cashin: 'Massive Rally' Expected Soon

Stocks could be in for very choppy trading on Friday following the heavy sell-off in the previous session, but get ready for a “massive rally” sometime next week, said Art Cashin, director of floor operations at UBS Financial Services.

“We look like we can be shaping up for a 'Thursday-Monday [scenario]',” Cashin told CNBC.

Based on historical trading patterns, Cashin explained that a "Thursday-Monday scenario" occurs when there’s a huge decline on Thursday, followed by volatile markets the next day and throughout the weekend into the start of the following week.

“Friday tends to be choppy—but it’s not going to be quite as bad as what you saw yesterday,” said Cashin. “And then you go into the weekend with great hopes and what often happens is they open the trapdoor on Monday, which could be if nothing comes out of Europe and you get capitulation[cnbc explains] selling.” Read more

Saturday, September 24, 2011

Forex-Eurousd -oversold



went down as expected and resting on the trendline which is acting as a support line ( as per weekly chart). I expect it to rebound upward as it is in oversold position. But overall, the trend is still downward biased.

Tuesday, September 20, 2011

Forex-Eurousd -lacks upward force

Since Euro is unable to even touch the trendline which acts as resistance, I would expect it to move further down.

Greek Default Could Tip US Into Recession

Despite being more than 5,000 miles from Washington D.C., a default in Athens could trip up the global banking system just enough to tip the U.S. into a recession, investors and economists said.

“Due to financial trading relationships and off-balance sheet exposure to European banks, the U.S. banking system will not go unscathed,” said Michelle Meyer, a Bank of America Merrill Lynch economist, in a note to clients Friday. “If the crisis in Europe escalates, it could be the shock that pushes the U.S. economy into recession[cnbc explains] ."

While this is not the base case predicted by Bank of America [BAC 6.99 -0.24 (-3.32%) ], the firm does still prepare its clients for this possibility by laying out how the Greece crisis could quickly become a “Lehman event.” After all, a 50 percent haircut on Greek sovereign debt [cnbc explains] would mean a very manageable $60 billion, or just two percent, of total bank foreign claims for U.S. banks, according to the report. But that’s just director exposure.

There are five major ways the U.S. is connected: trading counterparty risk and derivative ownership with heavily-exposed European banks, overall market confidence, central bank funding, money-market funds [cnbc explains] and trade flows. Read more

Friday, September 16, 2011

Forex-Eurousd - Resistance at the trendline.



As expected, it rebounded from the trendline. Expect resistance from the trendline as marked with the arrow. So take profit upon hitting that trendline.

Euro Collapse Could Lead to War: Polish FinMin

A collapse of Europe’s monetary union would likely lead to a breakup of the European Union as a whole, posing significant risks to the region and even raising the possibility of war in the long term, Poland’s Finance Minister told CNBC late on Thursday.

Franck Fife | AFP | Getty Images
A tramway pass in the center of Warsaw on June 8, 2011. Poland and Ukraine will co-host the 2012 European Football Championship.

"If the euro zone were to fall apart then it's hard to exclude the possibility of EU falling apart as well," Polish finance minister Jacek Rostowski said in an interview.

"The EU has been one of the two great pillars of European peace and security of the past 60 years," he said.

"Therefore the danger in a longer-time horizon, in 10-20 years, in the absence of one of the key elements of our security system and one of the key elements of our political system, which ensures we deal with problems in this peaceful, democratic way we've developed, the risk of all sorts of authoritarian political movements, and therefore even war, in the long horizon, rises,” he said.

On Friday, Treasury Secretary Timothy Geithner will join EU finance ministers at a meeting in Poland, which holds the rotating EU presidency, to urge them to take decisive action in response to the euro zone debt crisis. Read more

Monday, September 12, 2011

Eurousd supported by trendline.


Euro broke through the trendline and now sitting on another weekly trendline. Expect a rebound from this trendline.

Dow Could Crash to 3,000 in 2013: Author

he recent gyrations in global stock markets are just the beginning, says U.S.-based economist and author Harry Dent, who believes the Dow will fall below 10,000 in the near term before crashing to around 3,000 in 2013.

"I think the stock crash started in late April. This is just the first wave down...I think the crash really starts some time in early 2012," said the Founder and CEO of economic research company HS Dent and author of upcoming book "The Great Crash Ahead".

He pointed to the selloff during the last global financial crisis, when the Dow

[.DJI 10978.78 -13.35 (-0.12%) ] lost around 8,000 points in the period between October 2007 and early 2009.

Dent basis his bearish predictions squarely on the changing spending habits of global consumers.

"Baby boomers around the world, and all the developed countries — Europe, North America, Australia — they have peaked in their spending cycles...they've been driving up real estates prices and stock prices and the economy for decades, and now they're going to be saving and not borrowing," Dent said.

Accentuating the problem is the deleveraging of U.S. private debt, which has doubled to $42 trillion from $20 trillion in the last eight years, according to Dent, and is now valued at three times the size of the nation’s public debt.

"That debt is deleveraging, and that's actually causing deflationary trends. It won't matter how much stimulus the government throws at the system, because baby boomers with their already huge debt burdens will not want to borrow money and spend more,” said Dent. Read more

Thursday, September 8, 2011

Forex-Eurousd - sitting on trendline

Euro sitting on trendline and at the base of the horizontal channel. For those going for sideway trading might be ok to buy with stop loss to cut when break trendline after certain points, but for those who are risk adverse, just while for it to break the trendline.

A Market Bear Since June, This Pro Says It’s Time to Buy

Standard and Poor's global equity strategist, Alec Young has been bearish on stock markets since June this year, but like many other market commentators, he’s turned bullish in recent days.

Rose | Mueller | Stock4B | Getty Images

"A lot of (the) bad news has been priced in as a result of the pretty dramatic volatility that we've seen around the world in the last couple of months," Young told CNBC on Thursday. "You can't be a bear forever. I think we were a little ahead of the curve with our caution in June, it's worked extremely well."

It’s time, he says, for investors to rebalance their portfolios with a tilt towards equities, particularly after the global sell-off in August.

“In light of the declines, we are starting to see value and a lot of the allocations for our clients - whether it's emerging market equities, Asian equities, U.S. equities, Europe,” he said.

Major indices like the S&P 500 [.SPX 1200.21 1.59 (+0.13%) ], Britain's FTSE 100 [.FTSE 5331.49 12.90 (+0.24%) ] and Japan's Nikkei [.N225 8793.12 29.71 (+0.34%) ] have shed around 10 percent over the past three months.

"We think the risk-reward equation has improved for global equities," Young added, referring to the increasingly attractive price-to-earning ratios (P/E) of major markets. The FTSE 100, for example, now trades at a one-year P/E of 10.4; the S&P 500 at 13 and the Nikkei at 14.5. That's lower than the 12 times earnings the FTSE was trading at in June, and 15 times earnings for both the S&P and Nikkei. Read more

Wednesday, September 7, 2011

Dow Rebound Likely, Could Reach 12,400: Charts

What will the U.S. market recovery look like? We don't know exactly, but the history of chart behavior suggests several patterns we should look for, and it involves an alphabet soup of L, V and W shape rebound patterns.

Several factors help shape the pattern. First, is what I suspect will be some form of a further quantitative easing (QE3), be it direct financial stimulus or a further debasement of the U.S. dollar which will help export industries.

Counter this against continued high U.S. unemployment rate of around 9 percent, unmanageable budget deficits and credit downgrades.

When the head-and-shoulder uptrend reversal pattern ends there is no set outcome. The downtrend may continue, or a consolidation pattern may develop. It's the nature of the consolidation pattern that points the way to the future trend development.

The Dow, for one, is in the early stages of consolidation.

Dow Weekly Chart

There are five potential consolidation rebound patterns and most of them are bullish. This includes the V- and W-shaped rebounds from support and also the inverted head-and-shoulder pattern. These are low probability because of their directional bias.

The rebound patterns that include a margin for a bearish fall are the most valid recovery patterns in the current market condition. This is the L-shaped recovery pattern shown in the chart. The trading band consolidation is a sideways movement in a trading band defined by support and resistance levels. Often the volatility within the band remains high, although the exceptional current volatility is unusual.

The breakout, when it comes, is rapid because it's in response to a major change in conditions. This might include a policy announcement such as QE3. The breakout target is calculated by measuring the width of the trading band. This can be an upside or downside breakout. Often these targets are associated with historical support or resistance levels. Once the target is achieved the trend often continues. Read more

Monday, September 5, 2011

Euro's Future—When Will Rioting Start?

On the future of the euro, and when the serious rioting might start.

I read dozens of articles and analyst reports each week; the most interesting piece I saw this week was an interview in the German newsmagazine Spiegel with economic historian Hans-Joachim Voth.

Voth has examined the history of 28 European countries over the last 90 years. His conclusion:

1) "Austerity and anarchy are closely linked"

2) "Savings [budget cuts] amounting to just one percentage point of GDP are accompanied by social unrest. And when they reach two or three percentage points, it massively increases."

The cuts being asked in Greece — and likely Italy — far exceed two to three percentage points. The debate on the Italian austerity budget begins in Parliament next week.

Nor are they likely to be implemented: "There's no reason to believe that the scale of reforms currently needed to move things forward economically is politically feasible."

On the future of the euro: he gives the euro another five years, but says it is Germany that should quit the euro, not Greece:

"It would be much easier for Germany than for Greece because it's always the banks that are the problem in such cases. The second the country that is about to have a soft currency steps out of the euro network, all of its citizens are going to plunder their accounts and ask for their money in cash. Then the banking sector is broke."

The main problem: countries can no longer devalue their currency: Read more

Eurousd - Still sideway


Market still going sideway. So still stay out and wait.

Thursday, September 1, 2011

Dead Cross' Triggered

Are large-cap stocks about to nosedive?

The "Dead Cross"—a bearish technical indicator that occurs when a market's 50-day moving average crosses below its 200-day moving average—was triggered at the end of trading for large-cap [cnbc explains] stocks on Tuesday, according to Dow Jones Indexes. The Dead Cross is sometimes known as the "Death Cross."

As a result, Dow Jones says the stock allocation for its Dow Jones Golden Crossover U.S. Large-Cap Total Stock Market Index will "gradually decrease" within the next five days to 25 percent from 100 percent.

David Krein, senior director, product development and analytics of Dow Jones Indexes, says that this condition has occurred once or twice a year over the past decade, sometimes more, sometimes not at all. With regard to large-cap equities, the "Dead Cross" means that a downward trend in the market has begun or is about to begin.

"This is the only index that tracks this occurrence," he says. "The index is making the decision that investors would have had to make themselves." The indicator is a warning, says Krein that investors in large-cap equities "should begin exiting from the market" and move into less-risky assets.

A dramatic example of the "Dead Cross" occurred following the market peak in 2007 through the market trough in 2009.

In this case, investors who've tracked this technical indicator would have cut their losses by more than half and would have fully recovered losses by November 2009. Read more