Continuing our series on trading the euro from different angles, rating agency Fitch announced it’s cutting 18 Spanish banks’ ratings less than a week after cutting Spain’s sovereign debt rating.
Traders received what seemed to be great news over the weekend with European Union finance ministers agreeing to bailout Spanish banks for 100 billion euros. This is a much larger bailout than analysts thought needed to shore up Spain’s banking system.
Risk-on returned to Asian equities, commodities and the forex market on G8 talks wanting to keep the euro zone together. Markets are reacting to the G8 statement over the weekend by leaders “maintaining a firm commitment to implement fiscal consolidation” for Europe.
Asian markets were mixed as they adapted to Greek and euro zone unpredictability. Overnight Greece put in place a caretaker government and set a fresh restart for elections next month.
The world’s largest economy has now taken it on the chin in the last 9 out of 10 sessions with global and emerging market following. The old saying “sell and go away in May” seems to have been the right call for those that did just that. For the rest of us a healthy diet of risk off assets appears to be the name of the game.
U.S. futures point to a positive open on the back of the euro zone being green across the board with a ray of light penetrating the European cloud of uncertainty.
U.S. futures are pointing much lower in electronic trading this morning, as trader digest the fallout from JPMorgan’s $2 billion trading loss. The U.S. markets, along with India and other emerging markets, will be under pressure as they work through the slew of headlines over the weekend.
The socialist leader of Greece’s Pasok party and former finance minister Evangelos Venizelos may be close to forming a coalition government.
One of the most important features for emerging market investors going long is sound management in a company with a respect for the rights of minority shareholders.