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EUR/USD reached a 2-week high at $1.2868...

Market View | Thursday, November 22, 2012 3:44 AM GMT

Good Morning ,


- EUR/USD reached a 2-week high at  $1.2868 , EUR/JPY cross rose at highest levels since May , at 106.25   .

After failing to reach and agreement on Greek debt Merkel has issued a statement where she is confident there will be a deal reached next Monday. The failure to reduce the debt Greece owes to 120 percent of GDP would require some members to take a haircut on their loans. The IMF, ECB and European finance ministers failed to agree in a 12 hour meeting . The main division between lenders were Greek debt sustainability and reducing its deficit.

-  EU Fin Mins are meeting on Thursday to discuss longer-term budget considerations on proposed €1.03T package

-  Monthly report out of German Finance Ministry forecasting slower growth and exports in Q4 before a recovery sets in later in H1 of 2013. 

Italy announced new plans to boost productivity in a move toward a more flexible labor sector

-  European Union leaders meet in Brussels  for what promises to be an acrimonious fight over the bloc’s central budget with potential consequences far out of proportion to the sums involved. In the context of the EU’s 10.7 trillion euro economy, the disputed budget increase is trivial, but deciding who gets what is always difficult. This year’s budget fight is and should be different. The bloc’s 27 nations will meet in the shadow of a deep financial crisis, which is forcing governments and their electorates into painful change and sacrifice.

-  French private sector output falls at slowest rate in three months as services downturn eases  The weaker overall fall in output reflected a moderation in the rate of contraction of  services activity during November.  Manufacturing production meanwhile decreased at the same sharp pace as in October.


- After France, Britain's AAA credit rating returns to the spotlight .  It is easy enough to see why credit rating agencies would want to downgrade France.  But if France is thought no longer worthy of AAA status, why are they not meting out the same treatment to Britain, with a much bigger, and apparently even more persistent budget deficit?

Our turn will come soon enough, many in the City were saying on Wednesday   With tax revenues continuing to fall short, the UK government looks set to borrow some £10bn to £15bn more this financial year than the Office for Budget Responsibility forecast it would at the time of the last Budget.


-  Better times mean better opportunity for change in China .  Arrival of new party leaders coincides with release of promising economic data, and the opportunity must be seized to proceed with reform. From an economic perspective, the 18th party congress closed at just the right time. New data shows that growth benchmarks in the industrial, investment, export and consumption sectors have been rising for two months, reversing a short-term downward trend. Policy-makers have been more objective in tackling this downturn than they were during the 2008 financial crisis.


-  Japan  ,  While opposition leader Shizo Abe's push for reflationary policies produced a short-term euphoria for Japanese financial markets, it also bears the underlying risk of an unwanted spike in bond yields and a Japanese version of a sovereign crisis. The main opposition Liberal Democratic Party, led by Abe, who is seen as a top candidate to assume the premiership after the Dec. 16 general elections, announced Wednesday its campaign platform, calling for the need to strike an accord between the government and the Bank of Japan to help achieve 2% consumer inflation.


-  SF Fed's Williams Says Fed Not Near Limits On Bond Buying


-  Bank of Canada Deputy Governor Tim Lane repeated on Wednesday the central bank's message that interest rate increases will likely be needed, but only over time. The "over time" phrase was introduced in the bank's key guidance in its rate statement on Oct. 23 as a way of signaling that while the next rate move is likely to be up, such a move was less imminent than it had been.


Have a nice day !

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