IIFT Daily Note with Peter Brown

One thing is clear, they don’t know what they are doing!

Posted by:  |  Time: 7:49 am  |  Topic:  |  Comments: 1
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Mr Dijsselbloem has put a spanner in the works by saying Cyprus is the new blueprint for Eurozone countries in crisis. This means deposit holders will be burned in Italy and Spain. Really? Later he had to retract the statement as the market went into meltdown. These peolpe have no clue what they are doing. They are making it up as we lunge from one crisis country to another. This Euro is a train wreck in slow motion. The Spanish banks are in deep trouble and a run on deposits would tip them over the edge. Whether deposits are leaving the system will take some time to come through so in the meantime expect Euro ministers to insist Cyprus is a one off. Remember that rubbish was what they said about Greece.

All this has left the euro market vunerable although we may have come a bit far in one day. Expect a small bounce this morning but it is a sell on rallies.

US cannot avoid this story. Deposits and runs on banks are big news. The S&P has failed to punch to new highs so be careful of a deeper correction here.

This is not an easy market to trade from the S&P standpoint and if you buy it a short hedge position on the Euro could be a good idea. Europe is just a sell from any bounce.

Levels are S&P 1560  1538  1532   Euro 1.2920  1.2840  Staying out of USD/JPY until month end. IBEX missed it yesterday (damn) too low needs a bounce.

 

One Comment

Austin Bourke

March 26, 2013

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Brilliantly incisive and accurate comment from Mr.Browne, one of the few people in Ireland who knows what he is talking about.