Daily Forex Brief
London: Monday 15th August 2011 |
Much ado about nothing
For all the volatility and trauma, it's remarkable how little most things moved overall last week. The S&P was down less than 2%, despite the 8% price range. In FX, EUR/CHF was more than 9% lower on the week at one point, but for the week as a whole ended up around 0.7%. Perhaps the main exception was some of the peripheral debt markets in the eurozone, with yields on Italian debt nearly 75bp lower on the week and Spanish bonds down by nearly the same amount. The ECB's decision to start buying Italian debt had a significant impact and has bought some time for politicians to piece together a route-map for the way ahead. The potentially positive step over the weekend was a report that the German government may not longer be against the issuance of eurozone bonds, according to the Welt am Sonntag newspaper. If true (the FT reports that the German finance minister remains firm in his opposition), it could be a significant moment, given that, in terms of keeping the eurozone together long-term, some degree of fiscal union (and the partial political integration it would require) is the only viable way ahead from here. |
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Also in today's Daily Forex Brief: - Yen and franc starting the week nervous
- ECB funding and bond-buying
- US spending keeping head above water
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