Weekly markets perspectives august 27Presentation Transcript
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Weekly Markets Perspectives August 27, 2012 .Fincor- Sociedade Corretora, S.A. provides services of reception, execution, and transmission of orders. The contents mentioned in this document do notconstitute (nor should they be interpreted as to form) any kind of counseling, or investment recommendation, or a record of our trading prices, or anoffer or solicitation to trade in any financial instrument. Fincor- Sociedade Corretora, S.A. will not accept any responsibility resulting from any use referring tosaid content or about any resulting effect that could have occurred.
Greece – Anything else Sir?-Samaras met Juncker, Merkel and Hollande. All the Leaders said that a decision about a delay to implementthe austerity measures in Greece will be taken only after Troika’s visit to the country in September. They allsaid that if Greece wants to remain in the Eurozone, must accomplish the program designed.-But, as usual, there is already opposition from some European Leaders about giving more time to Greece.More recently, both the Finance and Economic Ministers of Germany said that they were against thisdecision as it would harm creditors and it isn’t a sustainable solution for the country. Greece: Government Deficit as % of GDP 15,60% 9,80% 10,30% 9,10% 6,50% 5,20% 5,70% 2005 2006 2007 2008 2009 2010 2011Last year Greece had a deficit of 9,1% of your GDP, so until when will this unsustainable situation last?
We are still waiting Spain: A bailout is closer andfor you: ECB closer…-There is a lots of talk in the markets saying that theECB will define a limit to the Yields of each country, -They issued €4,5MM in 12 and 18 months treasuryand if that value is exceed they will intervene buying bills. There is still the rumor that Spain is close toSovereign Bonds. ask for a bailout as its financing costs are still at unsustainable levels.-The Central Bank of Germany opposed immediatelyto this, and even Pimco’s El-Erian said this was a bad Spain: 10Y Government Bond Yieldidea. 8 7,5 7 6,5 6,421 6 5,5 5 4,868 4,5 4 1-2-12 2-2-12 3-2-12 4-2-12 5-2-12 6-2-12 7-2-12 8-2-12 Until when are they going to resist?
Rest of Europe-France issued again treasury bonds with negative Yields.-And Germany issued 2 Year government bonds with an Yield of 0%. Germany: 2Y Government Bond Yield 0,4 0,3 0,2 0,1 -0,012 0 -0,1 Jan-12 Feb-12 Mar-12 Apr-12 May-12 Jun-12 Jul-12 Aug-12
Rest of Europe-Manufacturing data shows that the region continues slowing down. PMI Manufacturing 65 60 55 Germany 50 France Eurozone 45 40
A QE3? Does even the FED knows what should be theirnext step?-Positive FOMC Minutes: if the economy continues providing signs of contracting, new stimulus should beadded.-And a study from FED revealed that the natural rate for US’ unemployment is 6%, showing that there is stillspace to implement new stimulus in the economy as unemployment is currently near 8%.-But the President of the FED of St. Louis said that he is against a QE3, as the recent economic data in thecountry have been providing signs that the growth of the country is gaining pace again. Bullard is hak and ano voter FED member-All attentions are now centered on Jackson Hole Speech next Friday, where Bernanke should give moreclues about FED policy.
Economic data-This week the focus was on Real-Estate. New Home Sales Existing Home Sales430 5410 4,8 4,6 4,47390 372 4,4370 4,2350 4330 3,8 3,6310 3,4290 3,39 3,2270 3
Do you think Michael Phelps is fast? You didn’t met myfriend Apple. Apple 700 662,63 600 500 400 300 200 192,05 100
Rest of the World Japan: Trade Balance (Billion Yens) 293,899-“Buy on the rumor and sell on the fact”, but as 60,341 25,41for China it has been all just rumors. Are CentralBank providing more stimulus? -87,099 -205,57 -281,814-Japan trade balance still negative. -523,924 -517,382 -690,422 -779,569 -917,212 -1481,467
Weekly PreviewEurope The focus will continue to be Spain and Greece. We should follow closely the visit of Juncker and Hollande to Madrid.US Everybody is waiting by the Jackson Hole speech. Last year, Bernanke announced Operation Twist. This year? Hmm… lets wait and see.Rest of China, all politicians said that they are going ton intervene in the economy. We and the marketsthe are backing up. Tensions in Syria, Iran and between China and it’s neighbors are rising up.World
Weekly PreviewMarket IndicatorsWe remain positive for the markets, but there are several risks that can prompt them to fall. Vicious Cycle of Europe. We are currently on level 2. EURUSD 1,28 1,27 1,26 1,2554 1,25 1,24 1,23 1,22 1,21 1,2 1,2053 1,19 Option Skew Monitor. As it is positive indicates us that it is higher the probability of big appreciations on its value.
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