Cultural Differences Between France and Germany

The European Union is an amazing attempt at merge many governments and economies that are not only seperated by religion, politics and social reforms, but also by cultural differnces. All 17 members of the Euro agree there are major economic and political pressures facing each individual government. They all agree that radical changes need to be instituted. They all agree that they need to help the countries facing economic problems. They all agree that each country should maintain independence. They all agree that they need to work together for the common good. They all agree that government debt must be lowered, government services need to be move to private sectors. They all agree they need to be competitive in the global markets.

What they can not agree on is how ?

The problems facing the EU is as old as the problems in the middle east. The cultural differences, the way the people think and the way they deal with issues.

Split Decision

Germany and France still divided on healing euro woes

Merkel

Wants automatic sanctions against budget sinners

  • Rejects issuing euro bonds to help alleviate crisis

Sarkozy

  • Grudgingly accepts ‘more automatic’ sanctions
  • Favors issuing euro bonds to protect market access

The Arabs and the Nomads, the Christians and the Jews, the Islamics and the Secular have been fighting for years, the reason that peace is not easily obtainable is because they view the problems and the solutions differently because of their culture and history. Palestine and Israel will most never find peace, not because the people actually hate each other, not because the sides want war and not because of land, it is their cultural difference, it is their viewpoint and their perspective that is different.

This has become very evident recently in the battle between President Sakozy and Chancellor Merkel. They can ageed on the problems, they can agree on the solutions, but when it comes to the fine points and the decisions, they bump heads.

Surrendering sovereign powers, including the Parliament’s mastery of the budget process, would amount to a risky political gamble for Mr. Sarkozy five months ahead of France’s presidential election next spring. For its part, France has insisted that deeper integration also should yield increased solidarity.

The chancellor wants to focus on what she sees as the root causes of the crisis by creating a long-term regime of fiscal discipline, while changing the European Union’s treaty to give European authorities new powers of enforcement.

In a speech to Germany’s parliament on Friday, she warned that euro members would have to accept a loss of national sovereignty, and that there is no quick fix to the crisis.

In the past week, we have heard from the President of the ECB, from the Director of the IMF, from Chairman of the Bank of England. Everyone is prepared to assist to find solutions and offer assistance. The IMF was able to get pledges from most of the G20 nations. China has decided to assist the IMF. Central Banks from around the globe joined forces this week to aid the EU banks to maintain liquidity until the December 9the EU summit.

Towards the end of the week, there was rumor and announcements, statements and press that Merkel and Sarkozy were able to find a path. David Cameron from the UK met with the leaders on Friday and insisted that they find a way to resolve the EU debt crisis. And to discuss the possiblitly of rewriting the EU treaty that covers each country as a member of the EU. Mr. Cameron was there to represent the UK and other nations that are part of the EU but are not part of euro currency, to make sure they were not pushed to second place. There are pressures on the EU from all directions.

But the most powerful leaders of the EU are still at odds. On Friday Chancellor Merkels speech and the statements from President Sarkozy seemed to take almost opposite positions.

On Monday the markets will react to this new uncertainty. Markets soared from midweek on the news of agreements, understanding and road-maps. But it seems that the news was premature, as the IMF and the ECB can not act without the EU.

This is plan number 12.. its their last chance to get things right.

 

 

EUR/GBP Forecast for the Week of December 5, 2011, Technical Analysis

The EUR/GBP pair fell for the start of the week, only to have the market bounce again over the last several sessions. The pair formed a hammer at the end of the week, and this was preceded by a shooting star. This shows how conflicted traders are in this market presently. The pair is simply a battle between two very ugly currencies, and should continue to be choppy at best going forward. Because of this, we are not trading this pair for longer-term trades at the moment.

EUR/GBP Forecast for the Week of December 5, 2011, Technical Analysis EUR/GBP Forecast for the Week of December 5, 2011, Technical Analysis

EUR/GBP Forecast December 5, 2011, Technical Analysis

The EUR/GBP pair rose during the session on Friday, but gave up most of the gains by the end of the session. The resulting candle looks like a shooting star, and we see this as a short-term opportunity that could produce another fall down to 0.85 in the meantime. The breaking of the bottom of the Friday range is a bearish enough sign to have us short this market.  We aren’t interested in buying the Euro at all currently.

EUR/GBP Forecast December 5, 2011, Technical Analysis EUR/GBP Forecast December 5, 2011, Technical Analysis

A BIT OF A PLAN FROM THE ECB… but not the ROADMAP that was PROMISED

A week or so ago European Central Bank President Mario Draghi, assured the world that he would have a “roadmap” prepared and ready to present at the December 9th meeting of the EU. Yesterday, Draghi, began to release some of the details to assure the markets and the politicians that the ECB was taking positive action to resolve the issues facing Europe. Yesterday, simultaneously David Cameron was meeting with Sarkozy and Merkel, to pressure them on several matters. One was to reiterate the need for decisions and guidance, no more talks and meetings. He also stressed the need for austerity measures; just bailing out countries would not help Europe. Good budgeting and good finances are required. Cameron also was in serious talks regarding new policies and requirements that the EU would be placing on member states. Cameron wants to make sure that the UK is not given a second seat to France and Germany.

The Central Bank President only assumed his role last month and this is his first appearance and public statement. He called on euro-zone governments to quickly craft a “new fiscal compact,” calling it “the most important element to start restoring credibility.” He added that “other elements might follow, but the sequencing matters.”

“There cannot be a single currency without economic convergence,” he said in the southern French city of Toulon. “Or the euro zone will explode.”

Mario has come intense pressure from politicians to commit to massive purchases of government bonds in order to stabilize yields and give governments time to enact convincing deficit reduction. The ECB bond purchases can bring down countries’ borrowing costs, making it easier for governments to refinance debt.

The European Central Bank so far has resisted the pressure, keeping purchases in the €5 billion to €10 billion ($6.7 billion to $13.4 billion) range each week. This has been enough to keep the borrowing costs of Italy and others from spiraling out of control. Bond yields in country after country, not only the debt-plagued nations on Europe’s southern periphery, have been hitting.

Mr. Draghi stopped short of promising unlimited purchases of euro-zone bonds, as a number of European policy makers have recently demanded, but his comments nevertheless raised the prospect that the ECB is willing to do significantly more.

France and Germany, and euro-zone nations are working on new rules that would make budget discipline binding and enforceable by European authorities—possibly shortcutting the laborious and uncertain process of amending existing treaties. ECB officials welcomed the emergence of such a plan over the weekend, saying it would address “moral hazard” concerns.

Despite Mr. Sarkozy’s statements Thursday, there is still disagreement on how far to go—including between him and Chancellor Merkel. Economists said Mr. Sarkozy’s specific proposals may fall short of Germany’s demands for full fiscal submission to a euro-zone budget supervisor.

EUR/GBP Forecast Dec. 2nd, 2011, Technical Analysis

EUR/GBP rose during the session on Thursday as the markets were fairly quiet all around. The pair remains in the middle of a consolidative area from 0.85 to 0.8650. The candle for the day had a decent range to go with the gains, but as it is in the middle of the overall range, it isn’t playable at this point. The pair should continue to consolidate as both economies are struggling at this point, and there are a lot of headline risks involved in both the EU, and the UK via the banks.

EUR/GBP Forecast Dec. 2nd, 2011, Technical Analysis EUR/GBP Forecast Dec. 2nd, 2011, Technical Analysis

Convergence – Divergence and Insurgents

Christine Lagarde, President of the IMF, indicated yesterday that the G-20 countries we willing to come to the aid of the EU to increase the funding to the IMF. Currently, the IMF has 390 billion euros available in their emergency fund, which would most likely not be enough to assist the ailing economies of EU regardless of the leveraging power of the EFSF. Lagarde, indicated that the BRIC nations, which are made up of Brazil, Russia, India and China were willing to increase their funding to the IMF. The BRIC nations have been updated to become BRICS, which now includes South Africa. Lagarde, also noted that Latin America, specifically Mexico were also willing to increase funds. Lagarde, did not indicate the amounts promised or discussed. She is currently in meeting throughout South America. This is the first mention during the turmoil of aid from Russia.

While Lagarde, is pushing the G20 and the IMF to develop plans to assist Europe. The Europe leaders met with their counterpart from England yesterday, where David Cameron told the EU leaders that it was time for some direct action and final commitment and plans.

At the same time that Cameron was meeting with Sarkozy and Merkel, BoE director King, was admonishing UK bankers, to increase capital and to reduce their bonuses. King is trying to keep a tight rein on the bankers.

Recently, economists and financial experts as well as investors have been reviewing the tentative plans for the EFSF, and many have drawn the conclusion that although these European Bonds will help raise the funds necessary to assist the ailing economies of the EU, that the final effect will be an increase in borrowing costs for countries such as Germany and France who have low bond rates and will reduce the interest paid by countries such as Italy, Spain, and Greece. It will end up being a weighted average bond. This will help those with high borrowing rates but cause a damaging effect to those with strong economies. Investors have been playing the game, buying up high yield bonds in the hopes that they will not have to take a haircut and will have the bonds backed by the EU or the economies saved by the EU and therefore make huge profits.

The markets have adjusted to the reality that they were reacting to news and not improvements in business and economics. News can only sustain markets for a short period of time, between the Ups and Downs, but news alone cannot drive the markets without the achieving real economic improvement. This past week has demonstrated just how much rumor and news can move markets. The week started off with Black Friday, moved to Cyber Monday, moved to rumor Tuesday (IMF assistance to Italy) and continued on to Central Banks Coordinated Effort Wednesday. By Thursday, investors were exhausted and stressed from chasing markets and news. Markets retracted slightly, while they took the time to digest the week’s news.

Friday is still to play out.

The EU turns to the IMF

In a surprise turn around, EU finance ministers are turning to the IMF for assistance with the growing debt problems throughout the eurozone.

EU leaders have been meeting and are in discussion on how to use the European Financial Stability Facility. The massive amount of money needed to bail out Italy, Spain, Greece and possibly Belgium is a staggering sum which cannot be raised by the 17 eurozone countries without using leverage to extend the reach of the facility. This also exposes the EU to much larger losses and the fears that it might not be enough to stop the contagion or leave a cushion if other countries need bailouts. European leaders said the fund could be increased to as much as €1 trillion as a result of the leverage scheme, which involves partially insuring government bonds and creating special investment vehicles to attract capital from private sector investors.

Analysts say the amount is closer to €750 billion, since the EFSF has only about €250 billion that is not already earmarked. The International Monetary Fund which measures its funds in a basket of currencies and has about $390 billion to work with.

That compares with an estimated €2 trillion in funding needs for the most troubled euro area economies, including Italy and Spain.

Beyond the lack of sufficient funds, there are serious questions about how much risk the IMF would assume if it began intervening in the sovereign debt market.

Central Bank Directors and National Leaders all agree that a plan is necessary and not a bandage. The news keeps saying the plan has to be a bazooka otherwise the markets will crash.

The EU has been dragging this on for way to long and Investors are at their wits end. The next announcement needs to be a complete and all inclusive plan, without speculation and guestimates. The markets are looking for a complete roadmap, ready to roll out immediately.

The Central bank scheme announced yesterday is a stopgap measure designed to help for only a short term it is not a fix or a roadmap. The EU leaders have promised to have a complete plan ready for their December 9th meeting.

The question the markets are asking, is where the funds would come from to meet a need of 2 trillion dollars, even with support and assistance from the US, China and the UK, there is a shortfall and not enough money. Each country is facing their own economic and debt crisis and cannot offer all the assistance that maybe needed.

In the meantime the markets wait.

 

 

Markets Over React to the Central Bank Annoucement.

Strategists said Europe’s sovereign debt problems will continue to be the key driver for the euro. The EU and IMF must now do something positive to help the debt crisis and protect the euro.

Markets Over React to the Central Bank Annoucement.

The news today can be best interpreted from what investors and analysts are saying this morning.

“As Europe dithered, monetary policy makers acted, even if their ‘actions’ have more symbolism than significance,” said strategists at RBC Capital Markets. “Markets breathed a huge sigh of relief.”

Yesterdays move by the Central Banks signaled leadership and direction. This is what the markets are looking for. Investors jumped head first into the markets.

The move is an attempt to “ease strains in financial markets and thereby mitigate the effects of such strains on the supply of credit to households and businesses and so help foster economic activity,” the banks said in a statement.

“It’s the first time we’ve seen this type of global coordination since November 2008,” said Michael James, a senior equity trader at Wedbush Morgan. “The degree of coordination sends a message to the markets that global leaders are going to do whatever they need to do to instill confidence in the markets.”

“The fundamentals just keep marching forward despite the market turmoil,” said Doug Cote, chief investment strategist at ING. “The real economy seems indifferent to the EU debt headlines.”

Central banks are “hoping the rate is so attractive that hitting the swap line makes business sense as opposed to signalling vulnerability,” he said. “They hope if they draw enough institutions, the stigma will decline, stresses on the liquidity front will ease and that will ease some of the bearish demeanor towards the euro.”

“The price action was because the market was short, not being bought by people entering new long positions in euros and equities,” he said. “It’s people closing shorts.”

This morning’s coordinated action also implies that the central banks feel conditions are much worse than they would otherwise lead us to believe, which is why more liquidity is needed immediately,” said Kathy Lien, director of currency research at GFT. “The markets are always relieved to see central banks put up a unified front, especially on the heels of a similar increase in liquidity from China.”

Removing the risk of liquidity problems increasing further as year-end approaches provides a major relief to financial markets,” said Greg Anderson, senior currency strategist at CitiFX in New York.
“The level of cooperation and responsiveness being shown by the G7 central banks suggests that policy makers are now highly engaged and likely to come forward with further measures in coming days.”

“The big deal is just saying they are going to be involved. It’s not like they brought out the tank, they brought out the six shooter,” he said.

“It’s not enough. It’s a temporary liquidity initiative which is good, but it won’t solve the problem, because in a couple of days, the problems will put on their hats again,” De Leus said.

 

EUR/GBP Forecast Dec. 1st, 2011, Technical Analysis

EUR/GBP rose during the session as the Euro found relief in the form of major central banks relaxing their rates to borrow Dollars. The move makes the repeat of a bank collapsing like Lehman Brothers did in 2008 much less likely. As a result, the markets took off. The Euro initially surged, but so did the Pound. This created a choppy day in this pair, with the Euro coming out on top in the end, albeit barely. This pair will continue to be highly volatile as long as the EU’s problems are still around. We expect this pair to continue to consolidate between 0.85 and 0.8650.

EUR/GBP Forecast Dec. 1st, 2011, Technical Analysis EUR/GBP Forecast Dec. 1st, 2011, Technical Analysis

The Euro Returns to Reality

Early this week, investors, economists, reporters, columnists, analysts, were all swept away on the American Dream. Consumers were once again spending and the world was right once again.

Unfortunately, sooner or later the bubble has to burst. On Tuesday, George Osborne’s econimic speech was booed and hissed at. The papers and his fellow politicians swore at him. For once, the UK government was speaking the hard truth and the UK public just doesn’t want to hear it.
Sure everyone likes the American version, where you just spend, spend and spend some more, until everyone is happy, and our National Debt will be left as an inheritance to our grandchilder. The UK combination of David Cameron and George Osborne, have laid down a roadmap for the Commonwealth, to lead them back from the financial abyss.

The rest of the world should be watching these men, they have not taken the easy course, they have not taken the popular course, they have taken the course that is right for their country. It is not winning them votes and unfortunately, they will not receive praise for years to come, when history is written.

They have adopted the term “austerity” they have set their course and they are true.

Regardless of your personal belief, you have to respect the men for standing their stead. For keeping their path against all the odds.

Atleast the UK is not following in the paths of the European destruction. The UK has ringfenced their financial institutions, implemented austerity programs, reduced spending and unfortunately cut jobs. But it is a neccessity. If this was a private company, we would see their stock soaring.

Today’s news has now added India into the mix, one of the bright spots of the BRIC program, the development of the Indian Economy has been one of the more positive goals set by the IMF and the BRIC pact. India has truly bloosomed, but now that they have they are exposed to the global economic forces. Economic data released today, should India’s GDP fell and their growth rate dropped to 7% from an estimated 8.5 projection.

The euro begin to fall this morning ,the single currency was at $1.3280 against the dollar, from $1.3316

 

 

The Euro Returns to Reality

The European Markets were all tumbling as the dream of Black Friday and Cyber Monday, the not so complete news about the EFSF and the likelyhood of a final deal evoliving at the Decemeber 9th meeting of the EU. Monday, the markets were mislead by erroneous news about the IMF and Italy, which was complete falsehood. Tuesday the markets were hoping that there would be some plan emerging from the EU leaders meeting. There was bits of news, odds and ends, but nothing that could be called a real plan. Today, markets are reacting to the lack of leadership and direction.

Banks are falling, after the downgrades by Moodys and S&P yesterday. Bond yeilds are rising.

What is an investor to do… sit on the sideline or run to Gold, USD and other safe havens.

Financial Headlines from Around the Globe

Wednesday morning news can best be summed up in the headlines of the International Financial Newspapers

 

THE LIGHT AT THE END OF THE TUNNEL HAS JUST GOT DIMMER FOR US ALL.. The Hearld in response to George Osborne’s speech. BRITAIN’S squeezed middle is just about to get squeezed some more.

 

EUROZONE FINANCE MINISTERS LIKELY TO MISS RESCUE TARGET..Plans to expand the eurozone’s debt rescue fund to about 1tn euros ($1.3tn; £860bn) look unlikely to be achieved. BBC News.

 

The International Business Times opened with S&P DOWNGRADES 37 LARGE BANKS and continued with EUROPEAN SHARE RALLY ENDS

 

MARKET TO ECB: DOSOMETHING! From CNN Money with a second story entitled A FRENCH DOWNGRADE COULD DERAIL EUROZONE RESCUE

 

MOST ASIAN STOCKS DECLINE AS S&P CUTS U.S. BANKS’ CREDIT RATINGS the cover of BusinessWeek

 

BRITAIN BRACED FOR AGE OF AUSTERITY from API

Not a word about Black Friday, Cyber Monday. The magicians act worked for a day or two, but now the smoke and mirrors are gone and reality is about to set in.

Last night S&P and Moodys, got out their red pen and began slashing ratings. Bank of American dropped to a new low nearing the critical point of 5.00 per share.


Asian markets are the first to react to the late news from yesterday. Most Asian stocks fell after Standard & Poor’s reduced credit ratings for lenders including BofA., Goldman Sachs Group Inc. and Citigroup Inc. as Europe’s debt crisis cuts the global earnings outlook.

Bank of America, Goldman Sachs and Citi had long-term credit grades reduced to A- from A by Standard & Poor’s after the ratings firm revised criteria for dozens of the largest global lenders. China Construction Bank Corp.and Bank of China Ltd., the nation’s No. 2 and No. 3 lenders, were upgraded to A from A-, joining Industrial & Commercial Bank of China Ltd., the world’s biggest bank by market value on higher ratings than their U.S. rivals. Sumitomo Mitsui Financial Group Inc. Japan’s second- biggest bank by market value, fell 1.4 percent. The MSCI Asia Pacific Index fell 0.3 percent to 112.81.

The markets are also reflecting dissapointment Europe, effort to expand its bailout fund which seems to be falling short, forcing euro-area finance ministers to consider greater roles for the International Monetary Fund and the European Central Bank to insulate Spain and Italy from the debt crisis.

An agreement hammered out last month to expand the European Financial Stability Facility’s firepower to 1 trillion euros with leveraging will be “very difficult to reach,” was quoted by a Finance Minister .

The European situation is still at the center of market concerns, Investors will likely sell shares to lock into profit after recent gains.

EUR/GBP Forecast Nov. 30th, 2011, Technical Analysis

The EUR/GBP pair fell hard on Tuesday as traders bought the Pound in general. The Euro continues to be plagued by poor bond auctions with the Italians having to almost pay 8% on their 10 year notes now. The capital seems to be flowing out of Europe and heading into the UK, and the pair looks set to test the 0.85 support area. If we can get a daily close below it – we are short of this pair. Otherwise, we expect the consolidation to continue between the 0.85 and 0.8650 levels as neither one of these currencies are showing strength on the longer-term charts.

EUR/GBP Forecast Nov. 30th, 2011, Technical Analysis EUR/GBP Forecast Nov. 30th, 2011, Technical Analysis

American Markets Soar Like the Eagle

America is a country of hopes and dreams. A novice trader could have predicted Monday’s market response to the headlines of every newspaper “ Black Friday sets record sales up 16%”.

When the markets are in dispair, they are looking for any news to buy or sell. Monday’s market was a god sent for day traders, they love markets that surge. Institutional and Investment Brokers were in the markets as they opened or before they opened and by mid day were reversing their positions taking huge profits. This is the game, the strategy.

American Markets Soar Like the Eagle

The early morning surge was pushed upwards on the false news from the IMF about a deal being negotiated with Italy, which proved total untrue. Before the markets could react, Reuters reported that officials have agreed on draft operational rules for the European Financial Stability Facility, the euro area’s bailout fund. This was just the newsthe markets needed. They were waiting for some direction, some leadership from the EU. The news was just that news, as the actual meeting with take place today.

With European markets moving rebounding, the US markets opened with a roar. The negative news from the OECD report did not even make a blimp on the monitor.

Continued news of poured into the markets on retail sales from Black Friday and the demand on Cyber Monday.  As the day drew to a close the markets rallied to close The Dow Jones Industrial Average rallied 291.23 points, or 2.6%, to 11,523.01. After a seven-session losing streak, the S&P 500 Index rose 33.88 points, or 2.9%, to 1,192.55.

The Nasdaq Composite Index climbed 85.83 points, or 3.5%, to 2,527.34.

Volume topped 3.8 billion.

U.S. online sales rose 14.9% percent on Cyber Monday, topping out at approximately $1.03 billion for the first time. Reports indicate CyberMonday far exceeded retailers hopes. This was the news that fueled the end of the day rally on Monday.  Asian shares are trading higher Tuesday morning fueled by the US markets and the news from the EU.

 

EUR/GBP Forecast Nov. 29th, 2011, Technical Analysis

EUR/GBP fell during the Monday session after going both positive and negative during the session. Both of these currencies are presently being thrown around by the events unfolding in the EU, and as a result this pair should remain choppy. The candle for the session looks very much like a doji, and shows just how directionless the pair is at the moment. This really is a contest between two unwanted currencies, so until we get close to a support zone in the form of 0.85 or resistance zone in the form of 0.8650 – we are flat in this market.

EUR/GBP Forecast Nov. 29th, 2011, Technical Analysis EUR/GBP Forecast Nov. 29th, 2011, Technical Analysis

On A Positive Note

The euro remained steady its early morning rise on false information.

All eyes and ears will be on tomorrow’s meeting of the EU where they will be discussing leveraging the European Financial Stability Facility. By using leverage the EFSF can increase their lending ability many times over. Leveraging is a tool used by Forex and Option traders, who use small amounts of the portfolio to purchase large amounts of currency, commodities and options. It is a good tool when used wisely, it also allows for much larger losses.

The hopes of global investors are at least a firm plan and a course of action by the EU and a meeting of the minds so to speak between French President Sarkozy and Chancellor Merkel. These two have been at odds over risk and growth. The pair has taken on the role of leadership in the past many months, but have recently been at odds, which has upset economists and investors. With the turmoil throughout the EU, leadership and command are required. Plans of Action are needed, guidance and stability are required.

The markets today were up on the good news from the US and the chance that tomorrow’s meeting will finally have some firm directions for the Eurozone.

Economic news from the US continues to reflect an improvement in the economy. Early results on Cyber Monday, the day dedicated to internet holiday shopping, the counterpart to Black Friday show great promise for incredible results.

The disturbing report release by the OECD the Organization for Economic Cooperation and Development might really upset the markets tomorrow.

The growth figures for the US were positive and give some hope that it might be the US that is the locomotive with the power to pull the global economy back from the edge. Just a few months ago, we were hoping that Germany might be the driving force, but that is not the case. The new report released paints a bleak picture for Europe and the United Kingdom. The report predicted rising unemployment in the UK, with the jobless rate increasing from 8.1% in 2011 to 9.1% by 2013 even as the economy recovers. For the UK, the OECD’s predictions are a 0.03% contraction in growth this quarter and a further 0.15% next. And the eurozone would shrink in the fourth quarter by 1% and by 0.4% in the first quarter of 2012.

The overall report was bleak with the US and Japan showing some positive results.

Overnight, investors and economists, traders and politicians will begin to digest and factor in this report which might have some negative effects on the markets.

The worrisome news today was the treasurys, rates continued to rise. Yields on the 10-year note added 14 basis points to 2.03%, touching a high of 2.08%. A single basis point equals 1/100th of a percentage point. Watch the markets closely for clues tomorrow.

The News Heard around the globe

The International Business Times, reported the following this morning.” Asian shares jumped and the euro firmed Monday on hopes that Europe will come up with some concrete steps this week toward activating a crucial euro zone bailout fund and reports that the International Monetary Fund is considering helping Italy.”

This morning the euro rose 0.6 percent to $1.3322 after Italian daily La Stampa said the International Monetary Fund is preparing a 600 billion euro ($794 billion) loan for Italy without saying where it got the information. The IMF money would give Italy’s Prime Minister Mario Monti 12 to 18 months to implement policy changes without having to refinance the country’s existing debt, the Italian daily reported. Monti could draw on the money if his planned austerity measures fail to stop declines in Italian debt, La Stampa said.

The story began to spread around the globe within mintues, social net-workers were tweeting and online news centers were spreading the artilces. Reuters reported on Monday morning that contact between the IMF and Rome have intensified recently, but that it was unclear what support Italy could be offered.

In a short time, IMF chief Christine Lagarde, publicly denied the story and reiterated that the IMF was not negotiating with Italy and reiterated her earlier statement that the IMF only had an emergency fund of 285billion euro, not nearly enough to help, Greece, Italy, Spain and Portugal.

Investors are hoping for any news, especially good news, their nerves are shattered and raw and the slightest indication that the EU has a way to avoid multiple defaults, any signs of guidance or policy would boost the markets.

European markets were already responding the Black Friday news from the US, but these numbers are not firmed, all weekend the reports ranged from 6% to 16.% sales increases. Internet retailers were singing joy and claiming as much as a 35% increase. It didn’t take much news for weary traders to jump back into the markets.

The Italian Government today sold inflation-linked bonds  at a  yield of  7.3 percent, the second time in a week that the Treasury auctioned debt above the 7 percent threshold that led Greece, Portugal and Ireland to seek bailouts.  The false rumors regarding the IMF assured a successful sale. Demand was 2.16 times the amount sold.

Watch the markets closely to see investors reactions to the retraction of the news. The euro, should trade lower later today, as the dollar surges based on retail sales in the US.

are hoping for any news, especially good news, their nerves are shattered and raw and the slightest indication that the EU has a way to avoid multiple defaults, any signs of guidance or policy would boost the markets.

European markets were already responding the Black Friday news from the US, but these numbers are not firmed, all weekend the reports ranged from 6% to 16.% sales increases. Internet retailers were singing joy and claiming as much as a 35% increase. It didn’t take much news for weary traders to jump back into the markets.

The Italian Government today sold inflation-linked bonds  at a  yieldof  7.3 percent, the second time in a week that the Treasury auctioned debt above the 7 percent threshold that led Greece, Portugal and Ireland to seek bailouts.  The false rumors regarding the IMF assured a successful sale. Demand was 2.16 times the amount sold.

Watch the markets closely to see investors reactions to the retraction of the news. The euro, should trade lower later today, as the dollar surges based on retail sales in the US.

EUR/GBP Forecast for the Week of Nov. 28th, 2011, Technical Analysis

The EUR/GBP pair initially rose during the week, but was sold off in the second half as bond auctions went very poorly throughout the EU. The markets are starting to abandon the EU in general and the Euro as a result. However, the UK is highly connected to the EU and the results of that area. The UK exports over 30% of its goods to the EU, and as a result – poor economic news in the EU is poor economic news for the UK as well. The Pound is being sold off as a result now, and this pair is certainly a fight between two unwanted currencies. That will make this pair choppy, but the bias is more than likely to the downside. The two preceding weeks formed supportive hammers before this week’s shooting star. This pair appears to be winding up for a move, but the direction won’t be clear until we either get above the 0.8650 level, or below the 0.85 level. Until then, we are sitting tight in this pair.

EUR/GBP Forecast for the Week of Nov. 28th, 2011, Technical Analysis EUR/GBP Forecast for the Week of Nov. 28th, 2011, Technical Analysis

EUR/GBP Forecast Nov. 28th, 2011, Technical Analysis

EUR/GBP continued to fall on Friday as traders run from the Euro in general. The Pound is also not very liked at the moment, so the down move in this pair is going to be much slower than you would see in other Euro or Pound related crosses. The 0.85 level looks like it will be visited soon, but to be honest – we would rather sell both of these currencies in other crosses until that level gets broken to the downside.

EUR/GBP Forecast Nov. 28th, 2011, Technical AnalysisEUR/GBP Forecast Nov. 28th, 2011, Technical Analysis

EUR/GBP Forecast Nov. 25th, 2011, Technical Analysis

EUR/GBP rose during the Thursday session on a bounce from the 0.86 area. The pair looks very bearish though, and because of the 0.8650 level being so important, we aren’t willing to buy at this point. In fact, we are looking for weakness to sell from. The problems in the EU are simply too far along to consider buying the Euro at the moment. The Pound will suffer as a result of the Euro, and as a result this pair is a contest of two ugly currencies at the moment. The direction is down, but it could be a grind instead of a clean break.

EUR/GBP Forecast Nov. 25th, 2011, Technical AnalysisEUR/GBP Forecast Nov. 25th, 2011, Technical Analysis

EUR/GBP Forecast Nov. 24th, 2011, Technical Analysis

EUR/GBP fell hard during the Wednesday session as we pointed out it could on Tuesday. The Germans had a poor bond auction, propelling this pair lower as a result. The 0.86 level as slowed down the descent, and could produce a slight bounce, but the rout seems to be on, and the 0.85 level should be seen next. This pair can be sold on rallies in our opinion.

EUR/GBP Forecast Nov. 24th, 2011, Technical Analysis EUR/GBP Forecast Nov. 24th, 2011, Technical Analysis