The rare negative trifecta currently weighing on yields, stocks and the US dollar is underlined by a common denominator of disinflationary expectations coupled with fears of a double dip recession. This helps explains the spread between US & German 10 year yields (US minus GE) falling to its lowest level of the year at 34 bps (0.35%) last week. … Read more »

London – 6th July 2010 Yesterday’s US holiday gave the market the perfect excuse to do as little as possible as currencies traded in fairly tight ranges. Concerns about global growth continue to weigh on markets over the last 24 hours after the slowing service data out of China last week, with UK Service sector PMI for June yesterday coming in slightly worse than expected at 54.4, against an expectation of 55.0, its slowest rate for 10 … Read more »

Yesterdays better than expected 3 month European Central Bank lending auction saw a much lower take up of euros than the market had expected at €131.9bn, and this saw the single currency regain some ground, as concerns about the European banking sector subsided a little in lieu of today’s maturity in the 1 year emergency loan facility. … Read more »

London – 29th June 2010 The single currency continues to be the currency market whipping boy as markets continue to adopt a risk-averse approach to currencies with sterling being one of the main beneficiaries of the Euros’ woes. Widening CDS spreads and high interbank lending rates across Europe have increased funding pressures, with interbank rates at 7 month highs. There is also a potential liquidity shortfall of €100bn this Thursday as European banks have to repay … Read more »

As far as currency markets are concerned the subject of sovereign debt and Greece remain the focal point, however there is also concern about what President Obama may say about US plans for new financial industry regulation later today, which could increase rules on banks and force separation of investment banking and retail banking, and this has seen the yen rebound slightly. The Euro has continued to slide lower, with the spread on 10 year Greek … Read more »