A new front in currency wars

The surprise news out of Cyprus last week certainly intensified dollar strength we’ve seen over the past month. The chart above shows the year to date performance of the US Dollar (USD, green area curve) compared to the Euro ($XEU, red line), Pound Sterling ($XBP, pink line) and the Yen ($XJY, black line). Since [...]

Whatever it takes

Just a few months ago things were looking pretty grim for Europe. Greece melting down, Spain wobbling, Portugal, Ireland, Italy all looking positively creaky when viewed through the prism of bond yields, let alone investor’s perceptions. But what’s this? The chart above shows the Euro ($XEU, Euro Index, black line) compared to the US [...]

Europe on sale

The economic news out of Greece is dreadful, with another quarter of collapse documented that calls into question future bailouts. Frustrated by what is perceived as Greek obstinance, Merkel has threatened to cut off the next tranche of funding leading to renewed fears of a currency collapse. As the chart above shows, the Euro [...]

US Dollar why so strong?

The chart above shows the startling strength of the US Dollar, rising some 6.20% since May 1st 2012. Given the dreadful state current of the American economy, the excessive debt levels and negative outlook, why is the US Dollar so strong? Two words: capital flight, or money fleeing weaker nations and moving into the [...]

US Dollar why so strong?

US Dollar, 2011 to March, 2012

As the chart above illustrates, the US Dollar has exhibited some unusual strength as of late. Of course many point to renewed optimism about the US economy and the well-known Eurozone problems as drivers. As I’ve mentioned before, America has its economic own problems (and plenty of them!) [...]

Declining Euribor where is the risk?

1W Euribor, January 2011 to February 2012, daily

Euribor is rate of interest that Eurozone banks charge each other for short term, uncollateralised loans. By its nature, Euribor reflects the degree the riskiness banks perceive in the financial system. As that perceived risk increases or decreases, so does Euribor.

The chart above details [...]

Greece: all over but the crying

GDP and Unemployment for selected EU nations Q4 2011

The chart above shows Gross Domestic Product (GDP) and unemployment for five peripheral nations as well as Germany, France and The UK. Greece’s economic problems seem to increase daily even as the nation’s political stability weakens.

Keep in mind this situation didn’t suddenly arise. [...]

Money leaving the Eurozone, moving into US equities?

Correlation between S&P 500 and Euro – January 2011 to January 2012

Correlation (10 day) between the S&P 500 and the Euro has gone negative recently. The chart above has two sections; the upper window shows the weekly performance of the S&P 500 compared to Dollar / Euro. The chart below tracks the [...]

The ECB’s Quantitative Easing and spot gold

Spot gold and ECB Euro Long Term Refinancing Operations – August 2011 to January 2012

The chart above shows the effect of the ECB’s injections of capital and the spot price of gold. Since August 8th 2011 the ECB has injected 901B Euros and a further 259B US dollars (not illustrated) into the market. [...]

What does government debt have to do with new cars?

EU 17 – % change in government debt 2001 to 2011 compared to % change 2010 to 2011 new passengar car registrations

I’m continuing to merge datasets and finding interesting (and sometimes obvious) relationships. Here I’ve taken the % change in EU 17 Government debt over the past decade, comparing it to the % [...]