The markets were full of contradictions last week. Take for example the turmoil in the Middle East. In past crises, investors flocked to the U.S. dollar. But not this time. The U.S. dollar futures contract fell to 76.41 last week.

Another contradiction: the U.S. jobs report was the best in two years, with 192,000 new jobs added. The stock market should have rallied strongly. Instead the Dow fell 88 points. The crises in Libya and elsewhere overshadowed the favorable jobs picture.

Continue reading Euro Trades Above $1.40 on Expectation of Higher Rates

Euro Trades Above $1.40 on Expectation of Higher Rates originally appeared on BloggingStocks on Mon, 07 Mar 2011 07:00:00 EST. Please see our terms for use of feeds.

The trends that drove gold prices higher in 2010 are still in place. In the U.S., the Federal Reserve is buying $600 billion in treasuries in an attempt to keep interest rates low. Low interest rates encourage higher gold prices.

In Europe, the situation is still unstable. The European Central Bank (ECB) has stepped up its purchases of member nations' bonds. Spain is still on the table as a country teetering on verge of a bailout. Until the European mess is settled, gold remains a surrogate currency.

Continue reading Analysts Forecast Higher Gold Prices in 2011

Analysts Forecast Higher Gold Prices in 2011 originally appeared on BloggingStocks on Sun, 02 Jan 2011 14:15:00 EST. Please see our terms for use of feeds.

In an interview with CNBC, Warren Mosler, principal broker dealer with AVM, lays out his argument for the euro's rise to $1.50.

His main argument is that Europe is creating austerity measures that are curbing inflation and thus strengthening the euro. Notwithstanding the fact that the European Central Bank (ECB) is buying bonds from weaker members like Greece, Ireland, Spain and Portugal, these moves will not create inflation. No longer can speculators attack a single country like Greece and in doing so take down the entire eurozone.

Continue reading Will the Euro Rally to $1.50?

Will the Euro Rally to $1.50? originally appeared on BloggingStocks on Thu, 07 Oct 2010 12:40:00 EST. Please see our terms for use of feeds.

Both the Bank of England (BOE) and the European Central Bank (ECB) signaled they believe their economies need further help from cheap money as they announced Thursday morning that they will be leaving interest rates low and unchanged.

The BOE left interest rates at 0.5% -- where they have been since March 2009. The ECB left interest rates at 1% -- the same level they have been at since May 2009.

Continue reading BOE and ECB Leave Interest Rates Unchanged

BOE and ECB Leave Interest Rates Unchanged originally appeared on BloggingStocks on Thu, 08 Jul 2010 11:50:00 EST. Please see our terms for use of feeds.

Without giving much detail, George Soros says "The euro is a patently flawed construct."

Let's elaborate on this point. The greatest flaw in the euro is that it's a currency without a country. Instead you have a group of 16 countries that have agreed to use the euro as legal tender. This means that 16 separate political systems have agreed in principle to follow the rules of engagement, to use a military term. Those rules state that each country must keep its debt level to 3% of GDP.

Continue reading Soros: Euro Is a 'Patently Flawed Construct'

Soros: Euro Is a 'Patently Flawed Construct' originally appeared on BloggingStocks on Fri, 02 Jul 2010 12:00:00 EST. Please see our terms for use of feeds.

Just a week or so ago, traders and analysts were looking for the euro to trade at parity with the U.S. dollar. Now it seems that the markets got turned upside down.

The euro has powered higher for the last several days and is now trading above $1.25 The reason given was traders were worried that banks would have to borrow heavily from the European Central Bank (ECB) to meet their financing needs. However, they borrowed less than anticipated. Then there was the fear that Spain would not be successful in issuing 3.5 billion euros of five-year bonds. That also did not happen.

Continue reading The Euro Soars While the U.S. Dollar Gets Hammered

The Euro Soars While the U.S. Dollar Gets Hammered originally appeared on BloggingStocks on Fri, 02 Jul 2010 08:00:00 EST. Please see our terms for use of feeds.

So, how is that Summer of Recovery working out? Following Tuesday's drop, the market was slightly lower Wednesday morning thanks in part to the ADP payroll report. According to the report, employers added 13,000 jobs in June, falling short of the consensus estimate for 60,000 jobs. This data looks at private-sector jobs only and suggests that payroll gains were tame in June thanks to small businesses that were cutting jobs.

All of Wednesday morning's news wasn't bad, as the European Central Bank (ECB) offer of three-month funds came in short of expectations. This data means that the region's banks may not be as ECB-dependent as some thought. In addition, the financial sector is prospering as the exposure to European banks was made to appear a bit less toxic. Furthermore, Democrats in Congress decided to take a bank tax off the table in the new financial overhaul bill. This move has helped bring Republicans on board and makes the bill look like it may pass.

Continue reading Dow on Verge of Worst Second Quarter Since 2002

Dow on Verge of Worst Second Quarter Since 2002 originally appeared on BloggingStocks on Wed, 30 Jun 2010 11:45:00 EST. Please see our terms for use of feeds.

Spanish banks are scrambling to borrow record amounts from the European Central Bank (ECB) for fear that they will not be able to borrow from international capital markets.

Last month, Spanish banks borrowed 85.6 billion euros from the ECB, double the amount borrowed during the Lehman collapse, and amounting to 16.5% of all loans granted by the ECB. This is the highest amount since the launch of the eurozone in 1999.

Continue reading Spanish Banks Borrow Record Amounts from the European Central Bank

Spanish Banks Borrow Record Amounts from the European Central Bank originally appeared on BloggingStocks on Wed, 16 Jun 2010 14:20:00 EST. Please see our terms for use of feeds.

The European mess is still smoldering. The greatest fear among traders is that eurozone governments will be unable to enact or follow through on the austerity measures needed to bring deficits under control.

Last week Hungary joined the club of distressed nations. Yet, over the weekend, Hungary's government sought to reassure investors saying that the country is not facing a sovereign credit default.

Continue reading Selling Pressure in the Euro Continues into This Week

Selling Pressure in the Euro Continues into This Week originally appeared on BloggingStocks on Mon, 07 Jun 2010 10:00:00 EST. Please see our terms for use of feeds.

Continue reading ECB Intervention Calming Bond Market

ECB Intervention Calming Bond Market originally appeared on BloggingStocks on Thu, 13 May 2010 16:40:00 EST. Please see our terms for use of feeds.

The EU and the IMF have agreed on a €720 billion loan guarantee fund to stabilize the eurozone. The plan was formulated over the weekend to calm markets throughout the world and stabilize the euro.

As part of the plan, the European Central Bank stands ready to buy eurozone government debt if needed.

Of the €720 billion, €440 billion would be provided by eurozone members and a further €60 billion supported by EU members through the expansion of balance of payments facility. The remaining €220 million would provided by the IMF.

Continue reading EU and IMF Form €720 Billion Rescue Fund

EU and IMF Form €720 Billion Rescue Fund originally appeared on BloggingStocks on Mon, 10 May 2010 09:30:00 EST. Please see our terms for use of feeds.

With reference to the Greek debt crisis, Moody's said: "banking systems faced very real common threats if doubts were raised about their governments' abilities to pay debts."

Moody's was referring specifically to the UK, Irish, Italian, Portuguese and Spanish banking systems. Banks shares have fallen sharply across Europe. In France, Societe Generale (SCGLY) was the biggest loser, with its share price falling 7%. It holds $3.8 billion of Greek government debt.

Continue reading Moody's Warns of Contagion Risk to European Banks

Moody's Warns of Contagion Risk to European Banks originally appeared on BloggingStocks on Sat, 08 May 2010 09:40:00 EST. Please see our terms for use of feeds.

When the financial meltdown occurred, the U.S. Federal Reserveslashed interest rates to zero and bought U.S. treasuries to keep interest rates low.

The European Central Bank (ECB), which represents the 16 countries in the eurozone, does not have this power. Nevertheless, investors are looking for the ECB to intervene in the markets to stem the fall of the euro. In fact, ECB president said the matter was not discussed at their recent meeting.

Continue reading European Central Bank Fails to Act on Greek Crisis

European Central Bank Fails to Act on Greek Crisis originally appeared on BloggingStocks on Fri, 07 May 2010 12:10:00 EST. Please see our terms for use of feeds.

Continue reading ECB's Trichet Breaks Rules to Aid Greece, Prevent Contagion

ECB's Trichet Breaks Rules to Aid Greece, Prevent Contagion originally appeared on BloggingStocks on Tue, 04 May 2010 17:30:00 EST. Please see our terms for use of feeds.

Thursday's events in Europe provided some encouragement, if not universal calm, regarding the Greek debt saga, including the promise that Europe and the International Monetary Fund will now move relatively swiftly to put together a suitable package that will assist the Mediterranean nation's transition to fiscal solvency.

But even if Europe again show signs of "snatching defeat from the jaws of victory," investors should not anticipate a sudden return to the barter system, globally.

Continue reading One 'Trump Card' Left Should EU, IMF Talks Disappoint Again

One 'Trump Card' Left Should EU, IMF Talks Disappoint Again originally appeared on BloggingStocks on Fri, 30 Apr 2010 12:30:00 EST. Please see our terms for use of feeds.

Continue reading Closing Bell: The DJIA Passed 11,000 Once Again! (NBG, PALM, CELG, WMT, MEE, LCC)

Closing Bell: The DJIA Passed 11,000 Once Again! (NBG, PALM, CELG, WMT, MEE, LCC) originally appeared on BloggingStocks on Fri, 09 Apr 2010 16:20:00 EST. Please see our terms for use of feeds.

Continue reading Europe and England Keep Interest Rates Level

Europe and England Keep Interest Rates Level originally appeared on BloggingStocks on Thu, 08 Apr 2010 18:00:00 EST. Please see our terms for use of feeds.

It's a good old fashion standoff, and this time it's on the world stage. Germany and the European Central Bank (ECB) want Greece to tighten further. Specifically they want Greece to add 1% to 2% to its value-added tax and cut wages further in exchange for financial assistance.

Greece is balking. They want to postpone any decision on further measures until mid March when officials from the European Union, ECB and the International Monetary Fund complete their inspection of Greece's deficit cutting plans.

Continue reading Germany Wants Greece to Tighten More; Greece Refuses

Germany Wants Greece to Tighten More; Greece Refuses originally appeared on BloggingStocks on Mon, 15 Feb 2010 11:40:00 EST. Please see our terms for use of feeds.

Continue reading As Expected, ECB, BOE Keep Key Interest Rates the Same

As Expected, ECB, BOE Keep Key Interest Rates the Same originally appeared on BloggingStocks on Thu, 04 Feb 2010 15:40:00 EST. Please see our terms for use of feeds.

Continue reading In Rarity, ECB's Trichet Voices Public Support for Bernanke Reappointment

In Rarity, ECB's Trichet Voices Public Support for Bernanke Reappointment originally appeared on BloggingStocks on Thu, 28 Jan 2010 16:20:00 EST. Please see our terms for use of feeds.