{"id":641592,"date":"2013-02-07T08:22:09","date_gmt":"2013-02-07T13:22:09","guid":{"rendered":"http:\/\/blogs.reuters.com\/globalinvesting\/?p=8578"},"modified":"2013-02-07T08:22:09","modified_gmt":"2013-02-07T13:22:09","slug":"weekly-radar-currency-warriors-meet-in-moscow","status":"publish","type":"post","link":"https:\/\/mereja.media\/index\/641592","title":{"rendered":"Weekly Radar: Currency warriors meet in Moscow"},"content":{"rendered":"

G20\/EUROGROUP\/EURO Q4 GDP\/STATE OF THE UNION\/BOJ\/UST, GILT AND ITALY BOND AUCTIONS\/EUROPEAN EARNINGS<\/strong><\/p>\n

Hiccup. February has so far certainly brought a more sober, if healthier, perspective to world markets.<\/a> Global stocks are off about half a percent this week, letting the air out gently from January\u2019s over-inflated 5 percent surge. The focus is back on Europe, where the threat of a euro FX overshoot (in the face of LTRO paybacks and rising euro interest rates alongside stepped-up “global currency wars”<\/a>) has fused with a plethora of unresolved national debt conundrums and a stream of \u2018event risks\u2019 on the region\u2019s calendar. Euro stocks have retreated to December levels as the currency move and fresh political angst has taken the wind out of earnings and growth projections after such a steep rally over the past six months. Name anything you want \u2013 the tightening race for this month\u2019s Italian elections and Monte di Paschi scnadal there, a delayed Cyprus bailout and elections there this month, the Irish promissory note standoff with the ECB etc etc \u2013 when things turn, they all these get amplified again even if none really are likely to be systemic threats in the way we\u2019d become used to over the past two years. The slight backup in Italian\/Spanish yields to December levels shows sentiment turns still pack a punch, the European earnings season has been mixed so far, there are political murmurs about capping the euro and the political calendar over the next six weeks is a bit of a minefield for nervy markets. All the issues still look resolvable \u2013 the tricky Irish bank debt rejig <\/a>looks on the verge of a resolution; few still believe Berlusconi be the next Italian PM (only 5 percent on betting website Intrade <\/a>think so, for example); and Cyprus is expected by most to get bailed out eventually. Today’s ECB<\/a> will be critical to most of those issues, but next week\u2019s euro group gets a chance to update everyone on its role in them aswell). The issue likely to gnaw deepest at investors is the regional growth outlook\u00a0 and,\u00a0 in that respect, the euro surge is about as welcome as a kick in the teeth at this juncture. (Euro Q4 GDPs out next week). The French<\/a> clearly want to rein in the currency but don\u2019t have the tools or the German backing. Draghi and the ECB will likely have to come to rescue again, though he will not admit to euro targeting and so may drag his feet on this one until the move starts to burn. Interesting times ahead and interesting G20 finance meeting in Moscow <\/a>next week as a result.<\/p>\n

To keep this week’s market wobble\u00a0 in Europe in perspective, however Wall St still continues to hover close to record highs as the Q4 GDP shock was probably correctly dismissed as a red herring; Japan\u2019s TOPIX is now up 35% in three months (well, about 15% in euro terms), and Shanghai is up 18% in just two months. It\u2019s curious to note that Shanghai was the top pick of the year when Reuters polled global forecasters in December and average gains for the whole of 2013 were expected to be… 17 percent. So, stick with the growth and the currency printing regions for now it seems \u2013 even if you do get whacked on the exchange rate.<\/p>\n

So while a market pause at least has been well warranted, the big 2013 theme of a long-term investor retreat from core debt and re-allocation toward\u00a0 equity will likely prevent major corrections as long as the underlying global growth story \u2013 modest as it is \u2013 holds up and builds some steam. ANd that is a long-term story and won\u2019t be decided over a week or even a few months. US Treasury auctions next week may be the ones to watch in that regard.<\/p>\n

\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0<\/strong><\/p>\n

GLOBAL<\/span><\/strong>\u00a0DATA\/EVENTS TO WATCH NEXT WEEK:<\/strong><\/span> <\/strong><\/strong><\/p>\n

UK\/Swiss January inflation Mon<\/strong><\/p>\n

Euro group Mon<\/strong><\/p>\n

Indonesia rate decision Tues<\/strong><\/p>\n

Europe Q4 earnings Tues: ThyssenKrupp, Barclays, Glencore etc<\/strong><\/p>\n

ECOFIN meeting Tues<\/strong><\/p>\n

EZ Dec industrial production Tues<\/strong><\/p>\n

Swedish rate decision Tues<\/strong><\/p>\n

ECB\u2019s Draghi in Madrid Tues<\/strong><\/p>\n

US 3-year Treasury auction Tues<\/strong><\/p>\n

US Obama State of the Union Tues<\/strong><\/p>\n

Europe Q4 earnings Weds: ING, SocGen, Peugeot etc <\/strong><\/p>\n

Italy govt bond auction Weds<\/strong><\/p>\n

US Jan retail sales Weds<\/strong><\/p>\n

US 10-yr Treasury auction Weds<\/strong><\/p>\n

SKorea rate decision Thurs<\/strong><\/p>\n

Japan Q4 GDP Thurs<\/strong><\/p>\n

BOJ decision Thurs<\/strong><\/p>\n

EZ\/Germany\/France\/Italy Q4 GDP Thurs<\/strong><\/p>\n

Europe Q4 earnings Thurs: ABB, BNP Paribas, Nestle, Rio Tinto etc<\/strong><\/p>\n

UK gilt auction Thurs<\/strong><\/p>\n

US 30-yr Treasury auction Thurs<\/strong><\/p>\n

G20 finance ministers and central bankers meet Moscow Fri\/Sat<\/strong><\/p>\n

UK Jan retail sales Fri<\/strong><\/p>\n

US Jan industrial output Fri<\/strong><\/p>\n


\n<\/strong><\/p>\n","protected":false},"excerpt":{"rendered":"

G20\/EUROGROUP\/EURO Q4 GDP\/STATE OF THE UNION\/BOJ\/UST, GILT AND ITALY BOND AUCTIONS\/EUROPEAN EARNINGS Hiccup. February has so far certainly brought a more sober, if healthier, perspective to world markets. Global stocks are off about half a percent this week, letting the air out gently from January\u2019s over-inflated 5 percent surge. The focus is back on Europe, […]<\/p>\n","protected":false},"author":7385,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[7],"tags":[],"class_list":["post-641592","post","type-post","status-publish","format-standard","hentry","category-news"],"_links":{"self":[{"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/posts\/641592","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/users\/7385"}],"replies":[{"embeddable":true,"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/comments?post=641592"}],"version-history":[{"count":0,"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/posts\/641592\/revisions"}],"wp:attachment":[{"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/media?parent=641592"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/categories?post=641592"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/tags?post=641592"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}