TRIMBROKER (TRIMBROKER)
Markets  |  November 26, 2012 14:47:38

Budget fiasco


After the sabbaths, on Friday returned to the stock market traders-only abridged seance, but also during the few hours managed to smother stock indexes higher. Underpinning were better macroeconomic data from Europe as well as from China. Before publishing the Chinese PMI of manufacturing sector had ended at the highest level for the past 13 months. Index was also better managers of the shopping area of ??the PMI and IFO sentiment from Germany, which also monitors the activity of managers in the manufacturing sector. Fridays cocktail stock: Dow Jones +1.35% SP500 +1.30%, Nasdaq Composite +1.38%.

Shares welcomed the absence of bad news

Last week was the stock markets in the name of profit and SP500 index recorded the strongest weekly increase since June. Expectation of reaching agreement on a cliff fiškálnom were signed also by this growth. Until this week, but to become aware, or indeed the Democrats and Republicans moving towards agreement or compromise indications were intended only for it to cause no deterioration in mood at the table sviatočnom Americans. Humored helped behold still-long truce between Hamas and Israel.

Bankruptcy as a starting point

It, but what makes the wrinkles on the forehead, is still Europe. Negotiations for Greek rescue will be carried out even today politicians to find consensus about further aid distribution. Everyone is is clear that the Greek debt is unsustainable. Len politicians have to cover your eyes because of their heads vzišiel idea to other countries lend to Greece.The International Monetary Fund but still insists that the other countries as well as bearing the ECB's losses on Greek debt and help the country out of the problems. ECB sees scope for States to help Greece, but the entire haircut States refuse. Why? Since you admit defeat and mainly tell taxpayers that fail, is political suicide. Deputy Merkel as Germany, which lend to Greece at most, on Friday said that this is all according to plan, that Greece gets new money, and also rejected the Greek haircut. How long will phase's refusal to take is debatable. Finally, but perhaps unavoidable losses landscape. Greece is in the final analysis also may consider bankruptcy as a solution.

The Greek debt redemption will only work on paper


As a way of reducing the Greek debt is mentioned also shift the profit that the ECB is holding back the Greek debt to Greece, but is probably the best way of redemption of the Greek bond market. Then the debt of Greece, could significantly fall. One euro debt is Greece may repurchase for 30 cents. But the politicians who dealt whence money to repurchase debt obtained Greece, Hellenic Republic bond prices rise, as markets expect that skúpenie bonds from the market could drift. But it can help you with? Hard. Prices in očakávaniach redemption degrees so that a large part of the effect of debt skúpenia removed. Consequently, this option will only work on paper. In reality had hit the dealers who will want also to make a purchase Greek bonds. Should the Eurogroup held immediately like the ECB, which, if announced purchases of Greek bonds so well with them just started, this should much greater effect.

Budget fiasco

That Europe does not know how to negotiate, show also talks about the budget of the EU. Tie fail, as they were not willing to Britain which navršovať budget, also added a country like Germany, Sweden, Holland behold. Indeed even the bitterness felt by the fact that at the time škrtania EU wants more money. British Prime Minister Cameron said: The European Commission proposed spared neither one euro, the deeply offended all taxpayers. Cameron also criticized eurocrats behold, some of which earn more than he, have employed one of the safest and receive many allowances, which are not justified at all. Tires of each country to veto budget option, will reach agreement really extremely complicated.

Today's view

Today, financial markets will follow the main talks on Greek rescue. This is the third meeting of the Eurogroup to this topic in the last two weeks. The agreement is questionable and frustration absence of consensus could download the single currency down again. Euro already looks after silnom Growth tired and we could see a selection of the profits, which could begin just disappointment of the Eurogroup. The slide to 1.2880 / 70th

EURUSD

Author: John Benaki | TRIM Broker, as | Trading on exchanges TRIM Broker


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