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Global Financial Markets A Big Theme On Friday

2012/4/9 20:58:00 37

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Financial Markets The Euro The Central Bank

The following are the five themes that investors and traders think about and related reports this week, according to Reuters.

The chances of a new stimulus fade.

Europe

equity market

Since the 3 months since the fall, it is largely due to the decline of the ECB's 1 trillion Euro fund injection plan effect, or the natural response to the bright rise of the season.

However, if the positive effect of central bank funds is more sustained, the economy must grow.

The US non farm employment data indicate whether the recent performance of the US economy is better than that of Europe. In addition, investors will pay attention to the first quarter gross domestic product (GDP) in China in the coming week, which is expected to slow down to 8.3%, so as to assess the global economic outlook.

In addition, concerns about Spain's fiscal slide will escalate into broader concerns that the euro zone will fall into another round of debt crisis. The main factor will be evidence of economic recovery.

Risk spread of debt crisis

Spanish bonds

Rate of return

The rising cost of insurance with debt default also contributed to the rise in the yields on Italy's treasury bonds and the cost of debt default insurance, exacerbating investors' concerns over the risk of a comeback from the European debt crisis.

Because the European Central Bank (ECB) does not seem to be buying a bond buying plan in the short term, the yield on Spanish 10 - year bonds looks likely to return to the level of the central bank before the first three years of the market in December.

Although the performance of Spanish bonds is still less than that of Italy bonds, the bet on spreads between the two sides is no longer one-sided because the possibility of debt crisis spreading to Italy remains high.

Italy's mid - and long-term bond auctions on Thursday will be closely watched by investors in search of signs of weaker demand.

Spanish bond auctions showed a rise in borrowing costs in the country.

The trend of politics in France and Ireland has also been made.

Investor

More nervous.

With the first round of elections approaching, the French campaign is increasingly escalating; and if Ireland's opponents of austerity find more supporters than expected, then the referendum in the market may cause more intense reaction in the market than before.

Toxic shock

Spanish bond yields rose, due to the impact of the country's slash measures, and the ECB's cash injection effect diminished.

This has dragged down Spain's stock market by 11% this year and has hit analysts' expectations of profits for the fourth largest economies in the euro area.

The growth momentum of Spain's corporate profits has diverged from the neighboring countries, and the prospect of the latter has improved.

European stock market volatility hit a month high, the first two months of this year, the stock market slowed down slowly, followed by a significant fluctuation.

The company's performance will also show the degree of divergence between the various regions, as well as the

equity market

Whether the European stock market is expected to see a wave of growth driven by economic growth or a deeper pullback?

Euro or downward breakthrough

The euro fell to 1.20 against the Swiss franc for the first time since the Swiss central bank set the Swiss Franc exchange rate limit in September last year, at a time when the euro was at a disadvantage because investors were worried that the new eurozone crisis would soon be triggered in Spain.

The Swiss central bank has defended the exchange rate limit, pushing the euro back to 1.20 above.

The two key concern is whether investors will start to really test the determination of the Swiss central bank after the Easter holiday. Although the SNB has reaffirmed its commitment to maintain the CHF exchange rate limit, it is possible to stop this effort in the next few weeks or months.

The exchange rate ceiling has been maintained for seven months. Does the Swiss Franc break the cap as a sign that the euro will fall further? If so, the euro is likely to fall below certain key levels, such as $1.30 or 0.8000.

Hurriedly looking for

Euro

Alternative investors may again push yen buying demand, triggering concerns among the BoJ policymakers.

The Bank of Japan will hold a meeting in the coming week.

French general election

Closer to the first round of voting in the French presidential election, the greater the market's scrutiny of the country's public finances is.

As the latest wave of tension weighs down on Spanish bonds, the next president of France will have to assure the market that it can strike a balance between economic growth and slacken measures to remove the doubts that French bonds are embroiled in.

Analysts said that if the incumbent president Sarkozy wins the election, it will give the market a short-term relief; if the French Socialist leader Hollande (Francois Hollande) wins the prospect of improvement, the French bond spreads may widen.