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Euro Resilience Noteworthy, UK Trade Improvement, Japan Update

March 09, 2011
Peripheral European bonds are under pressure and the euro slipped through yesterday's lows against the dollar, but we continue to suspect the price action is largely technical in nature. The dollar's downside stalled encouraging momentum traders to square up positions. The underlying signal is still one euro resilience as it appears the in…
Euro Resilience Noteworthy, UK Trade Improvement, Japan Update Euro Resilience Noteworthy, UK Trade Improvement, Japan Update Reviewed by Marc Chandler on March 09, 2011 Rating: 5
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Spanish Bonds Decouple from Portugal

March 08, 2011
There have been two main surprises this year. The first is how the jasmine revolutions in MENA. It is one thing to recognize the fragility of those ancient regimes, it is another thing to watch a number of government's collapse. The second is that the European debt crisis seems to be having a marginal influence at best on the global capital ma…
Spanish Bonds Decouple from Portugal Spanish Bonds Decouple from Portugal Reviewed by Marc Chandler on March 08, 2011 Rating: 5
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Yen Notes

March 08, 2011
The yen is largely sidelined as the market's focus is elsewhere--ECB policy trajectory, the European debt crisis, MENA, etc. This is reflected by the fact that dollar-yen volatility (implied 3-month) is sitting on its 3-year low near 9.55%.
At 45 bp, the US-Japan 2-year interest rate spread is a few bp above its 100-day moving average. At 218 …
Yen Notes Yen Notes Reviewed by Marc Chandler on March 08, 2011 Rating: 5
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Turn Around Tuesday?

March 08, 2011
Corrective pressures grip the foreign exchange market today. The short-term momentum traders have been frustrated with the euro's inability to convincingly break above the $1.40 level and sterling's four attempts at $1.6350 appears to be the main impetus behind today's pullback. With today's losses, the euro has slipped through the…
Turn Around Tuesday? Turn Around Tuesday? Reviewed by Marc Chandler on March 08, 2011 Rating: 5
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When Will Portugal Ask for Assistance

March 07, 2011
Portugal will be selling 750 mln to 1 bln euro of 2 1/2 year bonds on Wednesday. It will be the first bond offering since the syndicated offering in mid-Feb. It has been trying to buy back bonds that expire this year, but these have generally seen lukewarm interest. Portugal is trying to raise funds not only to cover this year's deficit, but i…
When Will Portugal Ask for Assistance When Will Portugal Ask for Assistance Reviewed by Marc Chandler on March 07, 2011 Rating: 5
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CNBC: Choice Currency Plays CNBC: Choice Currency Plays Reviewed by magonomics on March 07, 2011 Rating: 5
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Canada and Oil: More Complicated than One Might Suspect

March 07, 2011
It seems clear. Canada is one of the few developed countries that is a net exporter of oil. Oil prices have soared and the Canadian dollar is at its best level against the US dollar since late 2007. But a closer look suggests a more complicated picture. Since February 15, oil prices have shot up by around 25%, while the Canadian dollar has rallied…
Canada and Oil: More Complicated than One Might Suspect Canada and Oil: More Complicated than One Might Suspect Reviewed by Marc Chandler on March 07, 2011 Rating: 5
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ECB Rate Outlook Dominates

March 07, 2011
It appears the foreign exchange market is being driven by one overriding consideration and that is that the ECB is going to raise rates as early as next month. The debt crisis on the periphery has been ignored. Fitch cut the outlook for Spain before the weekend, noting that the financial sector may need another 38 bln euros and the euro bulls wher…
ECB Rate Outlook Dominates ECB Rate Outlook Dominates Reviewed by Marc Chandler on March 07, 2011 Rating: 5
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Euro and Yen: Surprising Correlations

March 04, 2011
It looks so easy. Risk on and risk off. When risk trades are being put on, equity market and commodities prices, like gold and oil, rise. The euro appreciates and the yen sells off. When risk trades come off, just the opposite takes place.
Euro and Yen: Surprising Correlations Euro and Yen: Surprising Correlations Reviewed by magonomics on March 04, 2011 Rating: 5
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