EU Archive

EU trade surplus

This is seriously strong euro stuff: European Union : Merchandise Trade Highlights The seasonally adjusted trade balance was in a record E23.3 billion surplus in December, up from a stronger revised E21.6 billion print in November. Unadjusted the black ink stood at E24.3 billion, nearly double the comparable outturn a year ago. ...Read More

flow news in 2014 is bad for the Euro

So I still see all the fundamentals/trade flows favoring the euro vs the $US, with the EU running a trade surplus and the US a deficit, and low oil prices ‘helping’ the EU trade balance while ‘hurting’ the US’s. But the portfolio shifts continue to go the other way, including this report ...Read More

Comments on Greece

A couple of ‘fundamentals’ A default/restructure/debt reduction of any form removes euro financial assets and is a contractionary/deflationary bias that makes euro ‘harder to get’ and thereby firms the currency. Also, Greece has been running a budget deficit, which adds net euro the global economy, making euro easier to get, etc. so ...Read More

euro update, q3 gdp update

Seems trade flows and ‘inflation’ continue make the euro fundamentally stronger even as portfolios shifting due to ECB rhetoric keep it under pressure. Should the shifting run its course, I would not be surprised dramatic appreciation. New figures released by the Federal Reserve Bank of New York on Tuesday show that mortgage ...Read More

Italy Surrenders

Reads like Renzi sold out to Brussels and the Italian exporters: Italy Revises Budget to Avoid Clash With Brussels  (WSJ) Italy backed away from a clash with the European Commission over its 2015 budget on Monday by agreeing to use a €3.3 billion ($4.18 billion) reserve it had initially earmarked for tax cuts to reduce ...Read More

Euro vs $US

The euro is up vs the $US today in spite of near universal positioning for it to fall, including technical indicators pointing to further declines. I see lots of positives for the euro and one negative. Positives: 1.  $US went up/euro down due to portfolios buying/selling for the ‘wrong’ reasons (for example- ...Read More

today’s observations

Not much sign of any move towards higher deficits today. Just talk of more bank liquidity, which doesn’t matter, and more to weaken the euro, which doesn’t work either. Hard to say why the euro has been going down, but it’s not ECB policy per se which, while meant to weaken the ...Read More

Time to say goodbye? Schauble Calls on Italy to Pursue Structural Reform

Schäuble Calls on Italy to Pursue Structural Reform By Andrea Thomas July 16 (WSJ) — German Finance Minister Wolfgang Schäuble called on Italy to pursue its ambitious structural reform efforts if it wants to boost its economic-growth prospects. “Especially since growth forecasts for Italy have been reduced recently, it’s important to reform ...Read More

concern over euro strength

As previously discussed, the ‘missing piece’ from the standard export model is buying the currency of your target market, as Germany used to do, and as the EU can’t do for ideological reasons- they don’t want to give the appearance that dollar reserves back the euro, and they want the euro to ...Read More

A few comments on overnight news

The threshold may be high but there is one somewhere up there: Fed should be ‘very patient’ in cutting stimulus: Rosengren (Reuters) The high number of part-time workers who would rather work full-time, the still-high unemployment rate, and very low inflation suggest significant “slack” in labor markets and “call for a very ...Read More