Intraday Market Thoughts

Archived IMT (2010.11.05)

by Ashraf Laidi
Nov 5, 2010 18:27

EUR vs EZONE SPREADS CHART: *** HOW COULD EURUSD rise 3.5% during the same 2 weeks when Irish/Greek/Spanish 10 year spreads rose 20-25% relative to Germany? Anticipation of Feds QE2 has been the main catalyst. But the euro can no longer sustain those highs solely on the back of the Fed asset purchases, while shrugging the ensuing widening in corporate spreads. Irelands ambitious new budget (yet to be approved in parliament) aims at cutting the deficit to 9.25%-9.5% of GDP in 2011 from the current 11.9%.


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