Forex Fundamental Analysis
Just days after figures were released, showing that Japan had emerged from a nine month recession; the Bank of Japan has sounded a note of caution about the nation’s growth prospects.
While you weren’t looking, the British Pound has been under assault. The falling Pound has been masked by the crisis in the EU, and all of the drama surrounding it.
If the crew of the Starship Enterprise was to beam down and look at the global economy right now with their Tricorders and other gizmos, they’d conclude that it was alive and still in a growth phase, if only barely.
Political uncertainty was the watchword for last week in Europe, sending markets and the Euro lower. By the end of the trading week, Greece had a new PM and Italy was well on the way to getting one.
Until recently, the EU was expecting that growth within the 17 member Eurozone to come in at 1.8% next year.
Italy has become the next candidate for a bailout since its borrowing costs on 10-year bonds has risen to an unsustainable 7%. This has rekindled talk of a Eurozone break-up with more indebted and weaker economies forced out of a rump Euro. The consequences of this to the global economy would be impossible to calculate.
The Italian bond market is probably something that most Forex traders don’t pay much attention to. However, the 10 yield Italian bond has suddenly found itself a very important player in the Forex world.
The embattled Italian Prime Minister, Silvio Berlusconi, has survived numerous sex scandals and legal skirmishes related to his business empire involving allegations of tax evasion, fraud, bribery and even collusion with the Mafia.
On Monday, we had comments coming from Swiss National Bank vice-Chairman Thomas Jordan stating that the SNB “Is always looking into the situation.
The sovereign debt crisis is bad news for political leaders – on a personal level.
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