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The inevitability of further asset purchases from the Fed, BoE, ECB and BoJ enhance the case for gold and silver. ...

ECB LIQUIDITY & UPGRADES: ECB extends its 3-month fixed rate lending facilities into Q1 2011, which is EUR-positive considering 3-month EURIBOR has fallen to six-week lows at 0.884%. ECBs UPWARD REVISIONS of its Eurozone 2011 GDP forecast to 0.5%-2.3% from +0.2%-2.2% stand in contrast to the Feds...

Ashraf's interview earlier today on BNN discussing the ECB, euro and the US dollar. http://watch.bnn.ca/clip343439#clip343439 ......

STERLING BROADENS WEAKNESS on fresh data disappointment, this time from the slowest monthly rise in Nationwide house price index since Nov 2009 and slower than expected Aug construction PMI (6-month low). GBPUSD drifts around its 200-day MA $1.5427, while attempting to hold above the $1.5390s38%...

ECBs WEBER ROCKS THE EURO with some hawkish comments after saying ECB discussions revolving around removing monetary stimulus around Q1 2011. Irish 10yr yield spreads over Germany back up to 390 bps. While the 1.2730-40 support has been broken intraday, a weekly break would signify 1.2550s. CAD...

GOLD RALLIES after EUR sell-off intensified in early European trade following concerns with Irish debt and talk that Spain would not may not implement full austerity package. Gold was muted at the early stages of yesterdays USD rally before gaining $15 ounces. Gold remains propped by any sign of...

EURUSD BACK BELOW $1.30. NOW YOU KNOW WHY I said it was UNUSUAL for the USDX to break below its 200-day MA without for EURUSD to break ABOVE its own 200-day MA. (read last week's artcile for more detail). THREE DAYS INTO THE WEEK, and EURUSD is already on posting its biggest weekly loss since the...

Pay attention to the EU-USD Spread of Libor rather than isolating EUR & USD libor. ...

Spain's 5-year auction raised EUR 3.5 bln auction, which was deemed good by bond traders considering the negative chatter about a possible Moodys downgrade. CHINAs June PMI may have escaped a decline below the 50 level, but the decline to 14-month lows at 50.4 was sufficient to send the Shanghai...

NZD IS DAYs HIGHEST PERFOMER after the RBNZs 25-bp rate hike, which lifted NZDJPY and NZDUSD to 62.20 and 0.6816 respectively. AUD, NOK and CHF follow behind as strong performers. IT WAS RARE to see Asian stocks rally despite late session turnaround in US indices. Robust jobs figures in Australia...

Mirror, mirror on the wall who's the ugliest of them all could have been the question directed at the pound and the Euro over the past 18 months, as they battled it out for the dubious distinction for the crown of least wanted currency in their own battle of the uglies. It now appears that...

GOLD THE NEW ANTI EURO: Gold price action is increasingly tied to the euros broad performance and less so to the USD. Since March, the yellow metal has proven to be among the few safehavens away from the Eurozone sovereign woes to the extent that the correlation between GOLD/USD and EURUSD has...

ECB Intervention is inevitable, Gold set to catch down with other commodities & Aussie to way down under...

FEAR OF ECB INTERVENTION PULLING FX traders away from selling EUR and GBP, and forcing them to knock down commodity currencies (AUD, CAD & NZD). The massive 200-pip jump in EURCHF in less than 10 minutes (13:00-13:10 BST) followed by an additional 100-pip move is the work of no other than the...

Last weeks EURUSD break below the 1.2700 area, if confirmed on a monthly close could have potentially bearish consequences for the single currency from a technical standpoint. Given the unprecedented size of the bailout from an EU perspective, as well as an IMF point of view, the market...

The latest record high in gold at $1,244 is being especially driven by bond-purchasing measures of the ECB aimed at capping sovereign bond yields, which are an explicit form of quantitative easing (despite ECB's insistence to claim sterilization at a later time). 2009 was a clear manifestation of...

The Euro has continued its slide back from its overnight highs after a slow realisation that the bail-out while welcome from the point of view of bringing down CDS spreads, unless measures are taken to deal with the underlying structural problems affecting the most indebted of Euro zone nations,...

Germany proposed a funding facility of E500 billion with the help of the IMF, E60 billion of which will be in an loans from the European Commission and E440 billion in the form of government-backed guarantees from Eurozone nations. The E500 bln is an addition to the E110 bln announced last week by...

GBP RECOVERS ON DAVID CAMERONs offer to the LDP to form a coalition and build a majority government. If a deal goes through between these two diametrically opposed parties (Conservatives with Liberals), we expect the pound to garner further gains towards $1.53s even though passing policies would...

ECBs PRESS CONFERENCE DOES ANOTHER Business-As-usual, announcing no new policy measures in the midst of Sundays decision to suspend the minimum credit rating requirement. US & European equities may run the risk of extending fresh losses as the worlds second most important central bank avoids...

WHAT CAN THE ECB DO TODAY? Euro hit the 5-year trend line support of $1.2730-50 as dealers pressure the ECB into action ahead of todays interest rate announcement (11:45 GMT) and important press conference (12:30 GMT). Following Mondays decision to abolish the minimum credit rating requirements...

USDNOK GRAVESTONE DOJI CHART http://chart.ly/b689y2 & NORGES BANK DECISION: NORGES RAISED rates by 25-bps to 2.00% today in a decision that was not a surprise. While EURNOK is the more popular currency pair, especially now that Norwegian rates are a full percentage point higher than in the...

The dollar index is set to start its longest MONTHLY winning streak since Jan-June 1999, a year when the USD bullishness and euro gloom was at its maximum...

This weekends announcement of a 110bn aid package over the next 3 years for Greece has been a classic case of buy the rumour sell the fact as the markets doubt Greeces will to follow through on the severe austerity measures required to save the country from bankruptcy. Greek public sector...

ECB SPURNS CREDIT RATING AGENCIES BY ACCEPTING JUNK status bonds from Greece after suspending the minimum credit rating required for Greek government-backed assets used in ECB liquidity-providing operations. Until today, the ECB had required that Greek (and other) Eurozone govt debt to have an...

RISK AVERSION slams commodities as Goldman Sachs drops 10% following the U.S. Securities and Exchange Commission's announcement to charge Goldman Sachs with Fraud in structuring and marketing of collateralized debt obligation tied to subprime mortgages; defrauding investors by misstating and...

GBPUSD breaks past the $1.53 resistance on soaring UK producer prices (highest since Nov 2008). Cable tests the Mar 17 high of $1.5380, and could extend gains $1.543038% retracement of the decline from the $1.6450 high. EURUSD cheers Trichets remarks that ECB wont allow a Greece default. The...

In todays ECB press conference, JC Trichet is expected to reiterate the ECBs accepting of BBB-rate bond collateral beyond year-end in order to extend Greek participation at ECBs regular refinancing operations. As this greases the wheels of sub-standard-liquidity creation in contrast to tightened...

Yield differentials, LIBOR developments and the failure in the CRB and Crude Oil continue to boost USD...

GOVERNMENTS TO THE RESCUE and RENEWED SURGE OF RISK APPETITE deals a fresh blow to JPY and erases some USD gains due to (1) $9.5 billion injection in struggling Dubai World by Dubai Govt; (2) Talk of a 20 billion IMF rescue package to Greece (3) stronger than expected 2.1% increase in UK Feb...