Part 2 : Coming Week Market Movers & How To Profit
EU: Radical Changes Coming- 4 Big Choices Weighed
The source of the likely big news is still the EU. Whatever path the EU takes, it will represent a radical change for the EU, be it in policy, its makeup, or even the existence of the EU as we know it. Here’s a quick look at what to watch this week.
1& 2: Will Germany Let The ECB Put A Ceiling EU Sovereign Bond Yields?
1. The consensus is that the only way to stave off a wave of sovereign and bank defaults that engulfs the EU (if not global) economy is for it to essentially forget about certain inconvenient laws and treaties and let the ECB print as much money as it needs to buy up as many bonds as needed to keep sovereign borrowing costs down. This solution too involves lots of pain, risks gutting the value of the Euro, etc. News on this issue will likely be THE market mover this week.
2. Inaction: With no other plan on the menu, the alternative inaction risks an EU collapse that could easily go global.
3. Who Stays, Leaves, EU
As John Mauldin points out here, behind closed doors a number of nations are examining whether it’s cheaper to leave the EU or stay. Leaks on that front could also be market moving.
4. Capital Controls Coming To An EU Near You? No Where To Run
Bruce Krasting reported this past week that the EU is attempting to force the Swiss government and its banks to transfer assets of all Greek citizens back to the rather unstable Greek banks from which they came. The goal is to prevent capital flight that is killing Greek banks, even if it risks Greek citizens’ losing everything they have in the not so unlikely event of a Greek banking crisis.
If that happens, what’s to stop Brussels from “repatriating” (read: stealing) EU citizens’ money that was sent to safer havens for the sake of propping up shaky EU banks that could well fail and take that money with them? Yes, that does sound like outright government theft.
US Deficit Super Committee
This bipartisan group was supposed to come up with a relatively small $1.2 trillion in cuts by November 23rd. Failure to do so risks another US credit downgrade and blow to US growth from across the board spending cuts that would follow. See here for details.
Top Calendar Events
USD: Preliminary GDP, FOMC Meeting Minutes
CNY: HSBC flash manufacturing PMI
EUR: French, German, EU flash manufacturing and services PMIs
USD: Durable goods
German Ifo sentiment
USD: Thanksgiving holiday, liquidity gone from market for the rest of the week, little follow through possible but could be volatile if major news released while there are too few buyers or sellers to absorb the news.
Disclosure/disclaimer: No positions. The above is for informational purposes only. All trade decisions are solely the responsibility of the reader.