Posts by "macrosam"

outlook negative, BBB-

By Jana Randow
April 9 (Bloomberg) -- European Union officials said they
are ready to rescue Greece if needed as economists at UBS AG
said that a bailout may be imminent as the countrys financing
costs surge.
A support plan has been agreed and we are ready to
activate at any moment to come to the aid of Greece, French
President Nicolas Sarkozy told reporters in Paris. The EU is
ready to intervene, Herman Van Rompuy, the president of the
27-member bloc, was cited as saying by Le Monde today.

It is very close to the time to re-enter my GBP/USD short. I think the recent GBP strength vs. the EUR will be abating and turning into weakness. GBP/EUR is approaching the descending upper trendline of a symmetrical triangle (daily time frame 2008 - 2010). This, of course, assumes that EUR/USD and GBP/USD continue in their downtrends, though it can be argued that GBP/USD has put in a double bottom, though I don't believe so.

Ashraf, you touched on this in today's IMT but to further expound, how unusual do you find it that the yield spreads on the other euro zone peripherals such as Spain, Italy, Portugal and so on (Ireland appears to actually implement their austerity measures well so I exclude them) have not blown on nearly to the extent that Greece's has? Is one way to interpret this as the bond market not seeing the contagion spreading beyond Greece, i.e. betting on a market accpetable (delay and pray) resolution? I saw Greece's yield curve go inverted today and was then astounded to observe the spreads to the Bund on the other peripherals.

What outcomes would be beneficial to the euro in terms of near-term appreciation? Aside from an ECB rate hike, which is unlikely, would a withdrawal of Greece from the monetary union actually boost the value of the euro? Would any IMF, EU, or combination of the two funded solution create anything other than a short-term short covering rally?

Thank you

No longer inverted after Trichet's comments likely caused a bit of short covering, 2yr now trading at 7.23