Bobbys Corner-Open Market-January.26.2012

Good Morning:

With the ongoing sage between the Greek government and private investors continuing-there have been reports of the private sector accepting a interest rate of less than 4%.  This is a major barrier that will now allow Grrece to seriously revamp their debt.  Greece has a 14 billion euro payment due in March-and without the help of the IMF or ECB-they will not be able to meet this deadline.
This news pushed the EUR/USD pair into the mid 1.31 handle (1.3173).
Italy sold 4.5 billion euro worth of 3 year notes-with the lowest yield since last August.  The yield was 3.763% versus 4.853 on the last 3 year note auction.

Yesterday’s press conference by Fed Chairman Bernanke brought the possibility of a third round of QE to the markets if unemoloyment remains high-so I guess we will see more QE by the 3rd quarter of this year.
He also talked about keeping interest rates low through 2014.

Gold, Silver and Oil are all higher-as are equities and futures.

HAVE A GREAT DAY & GOOD LUCK

IMF Comments to the G-20

• G20 countries can help EU expand size of bailout, and advanced countries’ monetary policy should remain accomodative
• ECB should expand the balance sheet for banks and debt crisis
• CNY is appreciating faster than previously, and China needs to continue to allow the CNY to appreciate
• G20 markets assign low likelihood of Iran-related oil supply disruption, and Iran oil export disruption would push prices up USD 23-30 per BBL.

Christine LaGarde, IMF Chief Comments

• No doubt on political will on Greece
• Greece’s default is not an option, Greece and creditors will reach an accord
• Confidence can be restored with Euro firewall, and understands Germany’s reluctance to introduce Euro bonds
• Bank recapitalization is under way across Europe

IMF Headlines

• Lowers world growth outlook to 3.3% in 2012 from September forecast of 4%.  Sees 3.9% growth in 2013
• Without action, debt crisis may force 4% Euro-area contraction
• 2012 recession in Italy of -2.2% and -0.6% in 2013, Spain -1.7% in 2012
• Maintains US growth forecast at 1.8%, projects 2.2% for 2013
• Governments avoid responding to any unexpected growth downturn by tightening policies
• Eurozone set to enter mild recession in 2012 at -0.5% and resume growth at 0.8% in 2012
• Japan 2012 growth forecast cut to 1.7% from September forecast of 2.3%
• China 2012 growth forecast cut to 8.2% from September forecast of 9.0%
• Sovereign financing stress has increased
• Global finance system remains fragile
• Important for Euro-funding area instruments to take direct stakes in troubled banks
• Intensification of European crisis could lead to world-wide recession

Bobbys Corner-Open Market-December.5.2011

Good Morning:

The euro was stronger against the JPY and USD to start the week.  The Italian government approved a new deficit reduction plan ahead of this week’s European summit to discuss the Euro Zone’s sovereign debt issues.  The new plan will include new taxes on luxury items, delay in state employee’s retirement age, and a levy on first time home buyers.
The Euro strength came on the heels of a proposal for ECB loans to be channeled through the IMF.
The proposal is loaded with problems of it’s own.  Many feel that the IMF is just not big enough to sustain large financing for the Euro Zone.  Also, there is concern that members of the undeveloped member countries will feel that too much of the IMF’s funds and resources will be diverted to the Euro Zone.

World equity markets are higher-as are US Futures.

Oil is slightly higher-but Gold is lower.

HAVE A GREAT DAY & GOOD LUCK

IMF Issues Statements on Euro Crisis

Says:

• IMF says it will need ‘more resources’ if Euro crisis worsens
• Bilateral loans would come from members central banks

Treasury’s Collyns on the Wires

Says:

• Obama administration very ‘closely engaged’ with Europe
• U.S. not making taxpayer commitments to Europe
• U.S. can be supportive of Europe through IMF
• IMF plays constructive role in Europe
• IMF has supplementary role in Europe
• Emerging markets could play even stronger role
• Emerging markets could boost domestic demand
• IMF playing ‘crucial role’ in Europe
• IMF has played role without risk to U.S taxpayers
• U.S. has “serious fiscal issue” medium term

Bobbys Corner-Open Market-Sept.27.2011

Good Morning:

The Aussie and Kiwi rallied in overnight trading-as Asian equity markets also rallied-indicating that investors are seeking higher-yielding assets in these uncertain economic times.
In Euro Zone business-The Greek Finance Minister stated that the EU should stick with the deal that was agreed to in July. He feels that the EZ should be focused on growth-not looking for a default.  The Greek Parliament has a vote scheduled today regarding additional austerity measures that were imposed by the ECB,EU and IMF so that additional bailout funds can be distributed to the country.  One of the austerity measures is a new property tax which is going to be a tough sell to their fellow countrymen-but is expected to pass during today’s vote.

World equity markets rallied, as US Futures are also posting higher numbers as we speak.  So it looks like the equity markets will open higher-and let’s hope they stay that way during the day.

Gold and Oil are also trading in positive territory this morning.

HAVE A GREAT DAY & GOOD LUCK

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