Lea Jakobiak
On the eve of a keynote speech by the ECB President, Mario Draghi, one leading economist doesn't hold back in the way he believes the Bank has dealt with the eurozone's faltering recovery.
Article / 13 November 2012 at 11:13 GMT

More fighting over Greek debt; GBPUSD takes a brief hop

Ken Veksler Ken Veksler
Director / Accumen Management
United Kingdom

So here we are some 2 years later, and lo and behold Greece still remains the thorn in everyone’s collective side.

Resolution to the issues at hand seem no closer today than they were two years ago and if anything they are now visibly more ludicrous than back then, to the point where there is now political infighting not just within the Greek nation (between rival political factions) but even more disturbingly (although not a huge surprise) from within the ranks of the Troika.

Disagreement about whether Greece will meet ridiculous debt/GDP targets by a certain time, whether money will be distributed as promised and whether or not further haircuts and concessions on Greek debt will be allowed are now the flavour of the moment, and do little to inspire confidence in a market that has already seen and heard it all before.

Deadlines for decision making, tranche repayments, and aid disbursement keep getting thrown around like the proverbial ragdoll as Belgian caterers seem to be the only ones truly benefiting from this debauchery. With more conference calls slated for the end of the month and beyond it’s anyone’s guess how long the inevitable will now be delayed.

In the meantime Greece has successfully rolled their 5bn in debt this morning while waiting for the next handout.

UK CPI lifts cable

Otherwise we’ve had UK CPI out this morning, higher than expected, which gave the Cable a temporary lift above the 1.5900 handle but only for as long as it took the algos to take profit and last minute longs into the figure. Subsequent to that was the German ZEW index print, which once again highlighted just how dire the situation in Europe is, and perhaps even more importantly that sentiment in Europe’s bankroll is deteriorating at a staggering pace, with only the fence sitters still smalls undecided about how long it is until Germany is considered to be in full blown recession also... Ahhh the fun times just keep rolling.

With regard the FX crosses on the day, tight ranges prevail as the market remains for the most part sidelined. As noted in this piece yesterday, FX volumes globally have shrunk by HALF from a year ago. That’s right folks, HALF. No one is playing out there and thus it’s not difficult to understand the latency in any moves in the FX space.

On the topic of levels...

EURUSD: A purported option expiry at 1.2650 rolling off today has thus far kept the downside limited (even after the ZEW print), while the topside sees some very light offers into the 1.2700 handle, with equally light stops sat above the 1.2740 area.

GBPUSD: Have attempted further downside overnight and failing, the Cable trades its staggeringly tight range of 1.5860 by 1.5900. Stops, if there are any, on the topside will likely be above the 1.5930 area, while bids continue to play around the overnight lows.

AUDUSD: There is nothing that will move the little battler right now and if you can scalp some points between 1.0360/80 support and 1.0430 resistance, then hats off, as the cross moves (like everything else) at a glacier slow pace.

USDJPY: I’ve admitted to liking owning Yen and nothing has changed. Playing this cross from the short side is still the preferred mode of action and anything into 79.70/80 can likely for now be faded.

There you have it, so as always, helmets on and Euromillions tickets purchased...


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