Editor, Investment Strategy. Europe, Middle East and Africa, London
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Mar 4, 2013
Mar 1, 2013

Keeping faith as crisis rumbles again

LONDON, March 1 (Reuters) – The global financial crisis is
clearly far from over but few long-term investors feel we are
back to square one either.

The current situation might be best summed up by filmmaker
Orson Welles, in a famous quote cited by Brown Brothers Harriman
strategist Mark Chandler this week: “If you want a happy ending,
that depends of course, on where you stop your story.”

Feb 27, 2013

Investors fret that Italy may undermine ECB backstop

LONDON (Reuters) – Italy’s fractious election results this week have raised investor suspicions that the euro zone’s protracted debt crisis has reached a critical juncture.

The European Central Bank’s support mechanism for the euro’s ailing government debt markets – which has brought six months of relative calm across the region’s markets – remains a powerful force in preventing another series of rolling creditor strikes.

Feb 27, 2013

Analysis – Investors fret that Italy may undermine ECB backstop

LONDON (Reuters) – Italy’s fractious election results this week have raised investor suspicions that the euro zone’s protracted debt crisis has reached a critical juncture.

The European Central Bank’s support mechanism for the euro’s ailing government debt markets – which has brought six months of relative calm across the region’s markets – remains a powerful force in preventing another series of rolling creditor strikes.

Feb 21, 2013
via Global Investing

Weekly Radar: Bernanke, Berlusconi and bumps on the road

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Financial markets have had one of those weeks of frenetic activity when each asset class blames the other for driving direction, few agree on an overall driver and it’s hard to square relative moves.  What seems to be true is that idiosyncratic and locally-focussed factors are back in vogue – witness the lunge in sterling as the BoE nods at more QE and higher inflation, or the sudden dive in commodities even as global stock markets nudged 5-year highs. Micro or national issues are getting more play as the stress busting of recent months seems to have reduced cross-market correlations  that characterised every ebb and flow of the overarching ‘global crisis’ for years.

To be sure, the longer-range theme of global reflation, the return from “safe haven” bunkers, and a gradual rotation out of low-yielding bonds remains the big backdrop and has helped explain the buoyancy of stock markets to date, the relative weakness of sterling and the yen as persistent  money printers into the recovery, and the rise in core US/German/UK government borrowing rates alongside a sturdy bid for Italian and Spanish bonds.

Feb 20, 2013

Squaring investor optimism with tighter euro credit

LONDON (Reuters) – Investor optimism about the euro zone may actually tally with what at first sight appears to be an untimely credit squeeze within the bloc over the past couple of months.

Although a new year surge in world markets has levelled off this month, February’s survey of investors and analysts by the German ZEW think tank showed sentiment toward Europe’s biggest economy rising to its highest in three years.

Feb 20, 2013

Analysis: Squaring investor optimism with tighter euro credit

LONDON (Reuters) – Investor optimism about the euro zone may actually tally with what at first sight appears to be an untimely credit squeeze within the bloc over the past couple of months.

Although a new year surge in world markets has leveled off this month, February’s survey of investors and analysts by the German ZEW think tank showed sentiment toward Europe’s biggest economy rising to its highest in three years.

Feb 15, 2013

Awaiting proof of the “Great Rotation”

LONDON (Reuters) – The jury’s out on the big investment theme of 2013 – the so-called “Great Rotation” out of expensive bonds back into undervalued equity – and don’t hold your breath for a verdict any time soon.

Only six weeks into a new year is early to judge what many see as a glacial shift that could take more than 10 years to play out, reversing a move into bonds by major pension and insurance funds that itself took a couple of decades.

Feb 8, 2013

Currency sparks rekindling volatility

LONDON, Feb 8 (Reuters) – Sudden swings in currency rates
are refiring measures of future global markets volatility,
pushing these risk gauges back towards what some will see as
more realistic and even healthier levels.

Many blame fresh talk of “currency wars” between the world’s
major trading blocs, which have been implicitly or explicitly
depressing currency rates for trade and export gains to give
themselves an edge in a growth-starved world.

Feb 7, 2013
via Global Investing

Weekly Radar: Currency warriors meet in Moscow

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G20/EUROGROUP/EURO Q4 GDP/STATE OF THE UNION/BOJ/UST, GILT AND ITALY BOND AUCTIONS/EUROPEAN EARNINGS

Hiccup. February has so far certainly brought a more sober, if healthier, perspective to world markets. Global stocks are off about half a percent this week, letting the air out gently from January’s over-inflated 5 percent surge. The focus is back on Europe, where the threat of a euro FX overshoot (in the face of LTRO paybacks and rising euro interest rates alongside stepped-up “global currency wars”) has fused with a plethora of unresolved national debt conundrums and a stream of ‘event risks’ on the region’s calendar. Euro stocks have retreated to December levels as the currency move and fresh political angst has taken the wind out of earnings and growth projections after such a steep rally over the past six months. Name anything you want – the tightening race for this month’s Italian elections and Monte di Paschi scnadal there, a delayed Cyprus bailout and elections there this month, the Irish promissory note standoff with the ECB etc etc – when things turn, they all these get amplified again even if none really are likely to be systemic threats in the way we’d become used to over the past two years. The slight backup in Italian/Spanish yields to December levels shows sentiment turns still pack a punch, the European earnings season has been mixed so far, there are political murmurs about capping the euro and the political calendar over the next six weeks is a bit of a minefield for nervy markets. All the issues still look resolvable – the tricky Irish bank debt rejig looks on the verge of a resolution; few still believe Berlusconi be the next Italian PM (only 5 percent on betting website Intrade think so, for example); and Cyprus is expected by most to get bailed out eventually. Today’s ECB will be critical to most of those issues, but next week’s euro group gets a chance to update everyone on its role in them aswell). The issue likely to gnaw deepest at investors is the regional growth outlook  and,  in that respect, the euro surge is about as welcome as a kick in the teeth at this juncture. (Euro Q4 GDPs out next week). The French clearly want to rein in the currency but don’t have the tools or the German backing. Draghi and the ECB will likely have to come to rescue again, though he will not admit to euro targeting and so may drag his feet on this one until the move starts to burn. Interesting times ahead and interesting G20 finance meeting in Moscow next week as a result.

    • About Mike

      "Mike Dolan is Reuters' Investment Strategy Editor in Europe. He has been a correspondent and editor for the past 20 years, working for Reuters from London and Washington DC in a variety of roles covering global policymaking, economics and investment trends."
      Hometown:
      Tralee, Co Kerry
      Joined Reuters:
      1995
      Awards:
      Reuters Editor of the Year, 2009. Reuters multimedia journalist of the year award, 2011
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