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Macro Stuff - Commentary
The BOJ intervened again last night to curb yen strength again with little
effect. The effort seems half-hearted at best; certainly it
is true that the stronger yen makes the huge increase in oil prices (always
priced in dollars) more palatable. This rather odd
currency configuration where the dollar and yen outstrip European
currencies has to be a huge boon to Asian economies at this
point to the detriment of Europe. Unemployment in Europe is still very high
(France registered a fall in October from 11.1% to
11%), and further interest rate increases would likely be harshly punitive
to the less than robust recovery there. European stock
markets should be able to thrive in this environment; historically European
stock buyers are inspired by export-led economies
which improve as one's currency devalues. There is no reason at this time
to postulate a near term change in these trends.
** Common Sense Is Not Common **
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