This Thursday’s summit of European Union leaders could well represent the last chance for EU lawmakers to convince global markets that the Eurozone concept is viable and worth defending.
“Nobody should be under any illusion: the situation is very serious. It requires a response, otherwise the negative consequences will be felt in all corners of Europe and beyond,” European Commission President Jose Manual Barroso told a news conference.
At the top of the summit’s agenda is the question of how to ensure the sustainability of the so-called PIIGS (Portugal, Italy, Ireland, Greece and Spain) and the growing concerns that debt contagion is spreading across the continent.
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In the broadcast today: Is the CHF on Its Way to Parity with the EUR? As uncertainty about the EU debt crisis and the U.S. debt ceiling debate continues to rattle the financial markets, we focus on the main beneficiary of the current risk-averse environment and explore the potential for continuation of the bullish trend of the CHF against the EUR and the USD, we analyze the latest trend developments with the EUR/CHF and USD/CHF currency pairs, we examine the renewed weakness of the EUR as the EUR/USD pair falls back towards the $1.40 level, we take a look at the NZD following the inflation report from New Zealand, we highlight the market’s reaction to the EU bank stress tests, the deadline for U.S.
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We have sovereign debt crises in three of the top three economies—US, Japan and Europe. Japan is out of the spotlight because nearly all its debt is held domestically, but the amount of indebtedness is still too high. As for both Europe and the US, we see default of some sort in both places. In the US, we say the bond market is wrong to imagine the Gang of Six proposal has “credibility” and will be accepted. When Aug 2 rolls around with no deal, Obama may have the chops to take the Constitutional back-door and issue an Executive Order lifting the debt ceiling, but such an action is not a solution. While
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– Inflation in New Zealand increased more than expected in the June quarter, driven by higher costs of food and petrol, Statistics New Zealand said Monday. Consumer prices rose 1 percent quarter-on-quarter, faster than the 0.8 percent increase in the March quarter.
The increase in the consumer price index, or CPI, reflects higher prices for petrol, food, air travel, and electricity, Statistics New Zealand manager Chris Pike said.
The concern for Reserve Bank officials now will be that, following the elevated quarterly second quarter CPI result, headline inflation likely will be above the central bank’s 1-3 percent target zone by year-end, said Helen Kevans, an economist at J.P.Morgan.
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July 14th, 2011
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One more rally in bonds before rolling, or are the highs in?
It was a relatively exciting day on the economic front, and action in Washington D.C. wasn’t far behind. Early this morning traders were fed several pieces of economic data; including PPI, initial claims, retail sales and business inventories. Later in the day, it was Chairman Bernanke’s semi-annual Senate Banking Committee testimony, and then a 30-year bond auction.
Initial claims were reported at a better than expected 405,000 (the prior was 418,000). Over 400,000 claims for unemployment is a horrible number in regards to historical standards but in this new world of stagnant growth, it was a pleasant surprise.
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– Homebuilder confidence has improved by more than anticipated in the month of July, according to a report released by the National Association of Home Builders on Monday, with the NAHB/Wells Fargo Housing Market Index partly offsetting the notable drop seen in June.
The NAHB said the Housing Market Index rose two points to a reading of 15 in July after falling three points to a reading of 13 in June. Economists had been expecting the index to edge up to a reading of 14.
