It's been almost a month since the last post, and guess what, nothing seems to have changed.
Greece still dominates the headlines, threatening to throw the financial world into turmoil even as European officials struggle to save the day. The Greek parliament meets this week to vote on austerity measures, and nobody really expects the vote to fail, but implementation is a totally different matter. So while a slight sense of optimism creeps into the market, it feels more like players getting tired after the recent sell-off. In case anyone has a short memory (that's all of us traders), Greece has a glorious history of defaulting on its debt to save its behind, and the only thing keeping them from doing so now is the somewhat illogical tie to the EUR.
EURUSD - Still some life left? |
But why worry? China comes to the rescue! Chinese Premier Wen Jiabao and company are on a European tour offering the west a chance to sell their troubled souls to save their tainted faces. Who's your daddy?!?! The one with the fattest wallet, of course. And he attempts to save the world, calming fears of endless tightening in China and even, according to some, signaling a move towards easier monetary policy. So we're all safe now, no worries, go invest all your cash.
Unless you're in the UK. Officials have finally come clean and admitted the possibility that further easing might be needed, as the current bout of inflation is expected to be transitory, of course. Witness the crude sell-off last week (thank you for the oil, IEA!). And growth remains elusive.
GBPUSD - we've seen happier days |
So let's end this little update with a look at the S&P, as good as any a barometer of the health of the Global Economy.
S&P - teetering on the edge |
The chart says it all. We're just about going over the edge but not quite. There's still some optimism left but like it says in the song...'sometimes I feel so fragile'....
Will we fall into the abyss, or will China save the world? Stay tuned, but don't hold your breath....
Peace
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