Action Forex

European equities have pulled back today but this is entirely normal after last week's rally. Stocks in Europe were up nearly 4% last week on average, and also closed above some fairly significant technical levels. The pan European Eurostoxx index broke above its 200-day sma at 2,448 and managed to

The Greek government has about 24 hours to decide whether it will agree to the Troika conditions for a bailout deal. Financial markets are hardly showing much concern - but there is a non-trivial chance that Greek does the unthinkable and we must consider the fallout if talks break down.

As we begin another trading week we have 2 key factors to consider when it comes to Europe both revolving around Greece. The attention has turned to Athens yet again as there continues to be contentious negotiations around the conditions for the second €130 billion (for now) Greek bailout. European

USD is broadly stronger on risk aversion as there is still no resolution in Greece. Time is running short on a PSI deal as well as the more difficult task of meeting Troika demands for greater austerity. Positive economic data out of the U.S. has also reduced the likelihood of

In Greece there appears to be a new agreement to cut a further 1.5% of GDP in spending amongh the key parties, but the deadline for signing off with the troika is fast approaching tomorrow at 11 a.m. local time. Will Greece agree to troika terms and more importantly,

In light of recent events in Greece and the possibility of a sovereign default it would be wise to look at a previous default example namely Argentina. We look at how a currency devaluation and sovereign default in Argentina distorted the country's subsequent economic data. Many point to Argentina as

The euphoria from Friday's US payrolls number that propelled risk higher has faded today as Greece takes centre stage. The technocratic government led by Lucas Papademos is trying to convince the three main political parties that more austerity is needed. A statement late last night said that an agreement between

European equity indices opened the session lower, led by declines in French equities. European banks are mostly in negative territory amid continued concerns related to Greece and Portugal. Additionally, there has been speculation that European banking officials might have reservations about some of the capital plans presented by banks, while

High yielding currencies continued to outperform as the developed nations central banks have all committed to a sustained period of ultra-loose monetary policy (unlimited free liquidity) and the contraction of volatility has put the carry trade back on the map. As with the crowded dividend trading in the equity markets,

Last week was characterised by better than expected macroeconomic data, giving a boost to equities and broader risk assets. The improvement in the data has been significant for the economic trajectory of the global economy and for the consideration of policy at the three national central bank policy meetings this

The theme for this week could well be 'exit US, enter Eurozone'. In other words, while US data drove markets less week culminating with one of the best US Employment reports in several years last Friday the Eurozone could well take over this week as Greece struggles with spending cuts

On Friday the non-farm payroll data were released in the US; the figure came out at 243,000 against the expected level at 140,000. In addition to the good employment figures, the preceding months’ figure was revised up by 60,000. It is god news that more people have found employment. This

Very little to report from overnight activity as there was little to speak of. I can only imagine everyone was watching Madonna lip sync at the half time show. Of note however was the fact that risk opened Asia with a gap lower and has since then spent most of

The euphoria from Friday's US payrolls number that propelled risk higher has faded today as Greece takes centre stage. The technocratic government led by Lucas Papademos is trying to convince the three main political parties that more austerity is needed. A statement late last night said that an agreement between

Euro zone retail sales declined unexpectedly in December, said the European Union's statistics office Eurostat on Friday. Retail sales fell 0.4 per cent from November after declining by the same amount in October.

On Friday, the payrolls triggered an interesting reaction on the currency market. The strong US labour market report supported the dollar and not risk sensitive currencies like the euro. This weekend, uncertainty on the Greek debt talks is pushing EUR/USD closer toward the first significant support level.

Friday's US employment data was extremely encouraging, with the headline non-farm payrolls coming in much stronger than expected at 243k (compared to consensus estimates looking for 140k), and the unemployment rate unexpectedly dropping to 8.3% from 8.5% prior. The release led to a short-term uptick in risk sentiment characterized by

The combination of an overstretched record short EUR position and the recent announcment by the FED regarding (low) interest rates and the potential for QE3 triggered a round a long dollar liquidation in the week to last Tuesday.

Another week of Greek debt-swap talks is coming ahead after the failure of the Greek government and private sector bondholders to reach an agreement over the size of losses and interest on new loans last week.

The euro appeared weaker against its major counterparts as markets open with Greece running out of time to meet international demands for more austerity. Various reports are suggesting that Greek leaders have been given until noon, to decide on how to react to Troika's demands ,however this time is different.