By Esteban Duarte July 14 (Bloomberg) -- Spanish banks borrowed a record 126.3 billion euros ($161 billion) from the European Central Bank in June as investors shun the debt-ridden nations lenders. Spanish banks increased borrowing 48 percent from 85.6 billion euros in May, according to daily averages compiled by the Bank of Spain. That compares with a drop of 4 percent to 496.6 billion euros provided to lenders by the ECB in the whole euro area.
I like both GBP and AUD vs the USD, but like the GBP more than AUD. Gillard is now coming under a bit of pressure. Her post-Rudd honeymoon did not last very long and I will wait to see the resolution of this before considering a longer term timeframe.
One thing of concern regarding the UK is Alan Budd's resignation, signaling some dissent in the Office of Budget Responsibility.
I am overall bullish on GBP and have been adding positions on dips, not as a short-term trade, but with the expectation that it will outperform USD, EUR, and JPY. The UK has had its elections, there is no political uncertainty in that regard, and the coalition has firmly committed towards fiscal consolidation. They get it. I subscribe to the amalgam of theories (Keynes, Von Mises, Fisher, Friedman) but believe that fiscal consolidation in hindsight will have been the correct application and that the market is rewarding this both in the current time and will do so in the future. Currencies like GBP, AUD are my strong hands.
The expiration of the 12-month repo drains the excess liquidity from the system, though this will still take some time are there is still the 3-mo LTRO and weekly MRO available.
Since the full-allocation repos were introduced, banks took more liquidity than needed, evidenced by the recycling of this excess at the ECB deposit facility. This drove EONIA down close to the Deposit Rate. When liquidity is equal to need (no excess), EONIA should trade close to the refi rate. Banks pay 75bps in negative carry when depositing at the ECB. Banks will only be willing to incur the 75bps of negative carry for so long.
This all assumes there is no looming catastrophe that reinforces the demand for excess liquidity. A big assumption to make.
Try publishing this in the UK weekend papers: Traders bet BankofEngland will raise rates to 6.25% --highest since 1… https://t.co/GWXrTEAk4R(11 months ago)
Poor start to a slow market day as Ezone PMIs disappoint. Im still keeping an eye on the rare (-2%) USD-GOLD combo,… https://t.co/UyRzWsRbs7(11 months ago)
-5% YTD is not good, while -7% from the year highs can be tough. Gold traders have their eyes fixated on this for n… https://t.co/NV5UMKsfNo(11 months ago)
ما وراء هبوط الدولار مع الذهب و من منهما يتمكن الارتداد؟
موعدنا الآن في غرفة شركة إكس أم لجلسة الأسواق
https://t.co/Y7tD0RxCS2
@XM_COM (11 months ago)
Jobless claims > 300k before next FOMC meeting would be ideal for Fed to make up for any CPI upside surprise (11 months ago)
"Cook & Eat at Home" scheme may come next to defeat UK inflation... (11 months ago)
Earlier in the week gold selloff was attributed to smaller than exp China EASING. Metal is now holding v well despi… https://t.co/ZW9cmXTPWW(11 months ago)
إستعمال تحليل الإنترماركت والتحليل الفني الكلاسيكي لتداول الذهب و الناسداك و السندات. شاهد هنا
Using intermarket technicals analysis to trade XAUUSD Nasdaq100 and Bonds.Watch here.
Latest Hot-Chart - May 16
Dax 200 DMA Deviation
You remember we went short Dax40 in late March based on the 13% 200 DMA extension, which gave us at least a 500-pt gain.
View Hot-Chart..
July 14 (Bloomberg) -- Spanish banks borrowed a record
126.3 billion euros ($161 billion) from the European Central Bank in June as investors shun the debt-ridden nations lenders.
Spanish banks increased borrowing 48 percent from 85.6 billion euros in May, according to daily averages compiled by the Bank of Spain. That compares with a drop of 4 percent to
496.6 billion euros provided to lenders by the ECB in the whole euro area.
One thing of concern regarding the UK is Alan Budd's resignation, signaling some dissent in the Office of Budget Responsibility.
Since the full-allocation repos were introduced, banks took more liquidity than needed, evidenced by the recycling of this excess at the ECB deposit facility. This drove EONIA down close to the Deposit Rate. When liquidity is equal to need (no excess), EONIA should trade close to the refi rate. Banks pay 75bps in negative carry when depositing at the ECB. Banks will only be willing to incur the 75bps of negative carry for so long.
This all assumes there is no looming catastrophe that reinforces the demand for excess liquidity. A big assumption to make.