“As we announced in November, unless credit market conditions stabilize in the near future, our ratings of all EU sovereigns will need to be revisited”
– Moody’s Investors Service
Moody’s Investors Service said it still plans to review EU member countries’ credit ratings in the first quarter 2012, hinting that last week’s agreement between 26 nations failed to deliver “decisive policy measures” to combat the debt crisis.
“Most people come to the conclusion that downgrades on the region’s sovereigns are easily justifiable”
– Nick Sargen, chief investment officer at Fort Washington Investment Advisors
U.S. stocks closed lower on Monday after Moody’s Investors Service said it will still review ratings of EU member countries in the first months of 2012, despite EU agreement on deeper fiscal union.
“There is currently considerable uncertainty regarding the prospects for the U.K. economy”
– Martin Ellis, an economist at Halifax
U.K. housing market will remain broadly unchanged through 2012 on weak demand and shortage of supply, said Monday mortgage lender Halifax, a unit of Lloyds Banking Group.
CHF
“Events last week did not change things fundamentally”
– Luca Bindelli, senior investment strategist at Credit Suisse Asset Management
Swiss stocks declined on Monday after Moody’s Investors Service hinted that last week’s agreement between EU member states failed to introduce fundamental measures to combat the crisis.
JPY
“The BOJ can provide as much money as it wants, but that won’t help end deflation”
– Norio Miyagawa, senior economist at Mizuho Securities Research & Consulting
Japanese wholesale prices increased more than expected in November due to higher energy costs, but strong yen and sluggish domestic demand suggest the nation’s economy will continue to struggle with deflation.
“There still has to be further monetary easing by the ECB to support growth in the euro area for 2012 and beyond”
– Standard Life Investments (based on Bloomberg)
EUR/USD is extremely bearish, as it has just breached through 1.3220. The next level in focus is 1.3145 which is likely to be reached in the near term. Initial resistance is at 1.3381, followed by 1.3550/77.
“[Eurozone] crisis will continue at varying levels of intensity throughout 2012 and probably beyond, until the region is able to sustain a broad economic recovery”
– Fitch (based on Reuters)
Support at 102.99 has been violated and the price is currently headed toward a subsequent level at 102.49. From above the currency pair is capped by resistances situated at 104.91 and 105.72 which should halt rallies.
“In the short term, it should make no difference as all the [EU] structures are in place, but across [the] longer term…we [UK] are going to become less relevant in political decision-making”
– U.K. Steel (based on WSJ)
GBP/USD has turned neutral and therefore is expected to act calmly for now. Resistances are located at 1.5752, 1.5796 and 1.5872. While supports should limit possible dips at 1.5560, 1.5500 and 1.5397.
“The BOJ can provide as much money as it wants, but that won’t help end deflation”
– Mizuho Securities Research & Consulting (based on Reuters)
USD/JPY has distanced itself from 77.11/19, which is a cluster of 55 and 100 day moving averages. At the moment the price is bullish and therefore is likely to advance, encountering resistances at 78.29/30, 78.66 and 80.12 on its way.
“There are slightly diminished prospects for the SNB meeting, with the market seeming less convinced of aggressive SNB action”
– FXPro Financial Services Ltd. (based on Bloomberg)
The American Dollar – Swiss Franc currency pair is making an attempt to finally break through a tough resistance area which lies at 0.9341/99. In case USD/CHF confirms a break of 0.9400, further goal will be set at 0.9776/84.
Eurozone crisis: hopes of recovery recede while recession looms
Gerard Lyons, the chief economist at Standard Chartered predicts that the eurozone will contract by 1.5% next year, while the UK will suffer a fall in output of 1.3%.
Fed likely to stay on sidelines at policy meeting
The Federal Reserve is likely to hold off offering the U.S. economy fresh stimulus at a meeting on Tuesday as it weighs encouraging signs on the recovery against risks coming from Europe.
China gets fresh chance to float the yuan
Economic gloom is deepening in China and abroad, forcing extraordinary measures.