The Mario Bro Show

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Forex Market News

Asia

Not much out in Asia recently, steady as she goes. The G20 despite all the hype in Australia is largely ignored elsewhere and produced nothing, why have it? Australia is signing up a deal with China. Whilst they love to buy rocks from our land and sell it back as products that we don’t need, we now will sell food and services too. Not sure what value we will get in return. Japan still struggling, new elections coming up and a sales tax too. Still selling the yen.

UK

Carney is now worried about inflation, or disinflation as the UK economy slows down. This out the day before the inflation numbers which are due today/tonight. It is still growing but not as fast as it was in 2013. So rates are now looking to be stable until late 2015.

Europe

Mario Draghi. At it again. Testified overnight to the EU Parliament. Nothing new, still saying he may and can do this, whilst noting the poor performance of the economic zone. He can do more but is worried about pulling the trigger, most of his colleagues do not want QE. Interestingly he took the opportunity to ask for help. As I wrote a few weeks ago, it is far better to have structural reform rather than going into debt via a QE program. There may be riots on the streets but better that than the slow decay of living standards as the lower classes languish under debt created by the wealthy to protect their assets. Here is what he said: ”2015 needs to be the year when all actors in the euro area, governments and European institutions alike, will deploy a consistent common strategy to bring our economies back on track, monetary policy alone will not be able to achieve this. Monetary policy has done a lot. It can do more if structural reforms are implemented. It can’t do everything.” Bring in Luigi.

North America

Along with China, the Yanks are poking along. As with everyone else, they wish the Japs and Europeans would sort their shite out. The stock market is holding at highs, despite major merger and acquisitions announced last night. US$ bulls seem to be taking a breather for the moment and I get the sense that things are on tenterhooks right now. My thinking is that we will continue to rally into Christmas but beyond that, things get a good deal murkier. The chase for yield will be hard with Australia, Europe, UK, America and Canada all pledging to keep rates low for the foreseeable future.

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