Currencies  |  January 17, 2013 14:45:40

Return monetary military Banks enjoys a growing market realitného

U.S. bank JP Morgan Chase (+1,01%) and Goldman Sachs (+4,06%) yesterday published the excellent results for 4Q and mainly thanks to the explosion of activity in the mortgage market. Real estate sector in the U.S. is starting slowly, and should liven next year to assist in the creation of GDP to fifty The base connectivity. For the bank, it means that you can enjoy excellent results again. Just let us hope that the boom in the market again be associated with such irregularities than in the period 2005-2007. Market yesterday also helped shares bounce Apple (+4,15%), which below the 500 USD attract new buyers to the market, who are preparing to impending corporate-company results.Yester cocktail stock: Dow Jones -0.17% SP500 +0.02%, Nasdaq Composite +0.22%.

Return monetary military

Once more in 2010 Montega Brazil's finance minister said that the world is on the verge of monetary wars, did not realize that his words will fully take effect until two years later. Over the last few days we have heard far too many narážok on this area. Eurogroup chief said that the euro's dangerously high. Norwegian as well as representatives of Sweden highlighted concerns about excessively high exchange rate of their currencies. Czech warns against intervention of crown. The Korean central bank to threaten an active response against the exchange market. Fed member Bullard expressed concern about the activities of Japan, in order to demoralize only. Governor King warned again before the new regime is actively managed by mien.Switzerland's been doing and still actively taken level 1.20, while Japan continues agresívnej monetary policy to stem deflation and demoralize only.

The formula for reducing debts

Examples, that the world has indeed close to each monetary war against anyone is up too much. It shows the fact that economic growth is currently prime way how to get out of debt. The basic pattern of recovery is 20 1035 = 2 Growth at 3.5% of the GDP will double in 20 years, what should be the debt is significantly reduced. Because they expect growth through domestic consumption is too bold, they rely on all exports. Sorry, it is not possible to ensure that all countries in the world exporters. Still, the global export equals globálnemu import.Artificially depreciate its currency and become immediately konkurencieschopným is still a great temptation, and therefore the central banks are doing their best to stabilize the situation on the financial markets, no goal is certainly also the depreciation of its own currency.

The balance of the central banks remain lush

If we look at the most prominent growth trend for the past 10 years we find that compound annualized growth over the period 2002-2011 was global in a population at 1.2%, while real GDP to 3.9%, while the global credit market grew 10.7 paces %. The balance of the central banks of pace, but has risen to unbelievable 16.4% per annum. Monetary stimulus, but which started up in 2007 and also ran around bujnejúci credit market.

Imbalances in the euro area remain

Except in the Competitive devaluation of the euro area. She has a long-term basis, as a whole surplus balance of commercial, but in it the imbalances still remain high. Even if the last two years have decreased, it is still seen that Germany is the main exporter of who he is still the main landscape PIIGS importérom. To address this imbalance was done very little. Rebalansácie attainment, that is enhancing the competitiveness of countries like Spain or Greece, it takes a very long time and usually this is through the painful reductions in wages. But beware Germany. The country begins run riot real estate market and it is possible that very soon they will also translate into pressure on wage growth. Provided that the price of labor in the PIIGS to decline, while in Germany grow, we may be considered a manifestation rebalansácie, but which may in a few years to cause similar crises, such as we see now. But not in the South but in the North of Europe.

For such a situation, the old continent but still a very long way and currently still has major structural problems. Real GDP EMU is about the same level as in 2006 and falling. Eurozone economic growth seen since 3Q 2011th Total employment is šesťročných minimách, whom the unemployment rate at 11.8% rekordnej level.

ECB helped the credit market

Therefore, are growing expectations that the ECB could do more to support the real economy. Unfortunately, the central bank can manipulate active only on the financial markets. The real economic variables central bank has only a very small impact. Activity, it is very easy to see the evolution of the average yields on PIIGS countries dlhopisoch compared with nuclear-income countries. While in the summer of 2012, this difference was nearly 700 bp, the current decreased to about 250 bp.Activity ECB LTRO as OMT or helped in narrowing.

The new standard: negative Deposit rates?

What then can the central bank do now? Despite the fact that Draghi at a press conference following the first meeting of the ECB this year has not spoken anything about the negative of deposit rates to still remain a possibility. Negative rate on the excess liquidity, commercial banks which have stored in the central bank, operates in Denmark, as well as Switzerland. It is also possible that the rates of negative becomes a new trend and will further step policy beggar-thy-neighbor? While it is not our scenárom, we may from negative rates of deposit that what is wrong with the zero rate. Standard.

Back to the beginning

The result would be a gradual weakening of currencies, but in the final analysis would be returned to the markets about the same level. Support for the economy would be short and rather caused by growing economic uncertainty, the light of further developments in the entities exchange rates. So let us hope that monetary war will not proceed.

Redemption LTRO: plus, the euro

Even if Juncker complained about the strong euro, while it none of the others did not follow the EU. The closest stimulus for the euro in the direction of its growth could be 30 January respectively. 27th February, when the commercial banks will be able to repay the loan resources from three-LTRO. If the volume stiahnutej considerable liquidity, the euro may represent a signal that is less liquidity, which will be positive news for the euro. Technically it is a view of the euro The growth continues,

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

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