Monday, January 19, 2015

We are seeing the Eurozone transform real time

Denmark Goes NIRP-er; Slashes Rates To -20bps Amid Currency Peg Fears

Another buyer of Euros will disappear if Denmark breaks its Euro peg. I doubt it can survive QE. Basically, ECB has lost Switzerland and possibly Denmark, to gain, Greece? Chump change?! Terrible investment!

Posted by libertas @ 03:31 PM (2211 views)
Please complete the required fields.



5 thoughts on “We are seeing the Eurozone transform real time

  • Again, they report this as if the Danes had any control over global capital flows. Following the Swiss debacle, speculators are smelling blood, and the flows of capital seeking a quick buck in Danish currency will be difficult if impossible to stem. The Danes are reacting rather than pre-empting, and at some point they are likely to decide that purchasing that much Euros, with QE on the horizon, is unsustainable for their balance sheet.

    Do not listen to their intentions, since they do not control the situation nor outcome and should never have created the peg in the first place.

    Reply
    Please complete the required fields.



  • Sweden and their peg leg are not far behind. Down to minus 0.075 today on the 2yr:
    http://uk.investing.com/rates-bonds/sweden-2-year-bond-yield

    Speculators have shifted from short the pegged currencies to long, and ECB’s actions can only accelerate that. Looks like Germany was right and ECB should have been run by Bundesbank.

    Reply
    Please complete the required fields.



  • Finland seriously negative at minus 0.139
    http://uk.investing.com/rates-bonds/finland-2-year-bond-yield

    The Euro core, that would have strong currencies outside a Euro are also seeing seriously negative rates:

    Germany, minus 0.168
    http://uk.investing.com/rates-bonds/germany-2-year-bond-yield

    France, minus 0.093
    http://uk.investing.com/rates-bonds/france-2-year-bond-yield

    What surprises me is that the pound is not more bid, because it has a floating exchange rate, and so ploughing money into Sterling nigh on guarantees appreciation relative to Euros. Maybe uncertainty around Scotland cast a shadow, and maybe they believe the baloney about rates going up?! But UK 2yr rates are hanging around at just under 0.4%, just below base rate. Much further and BOE will have to cut rates to avoid Gilt auctions being over-subscribed, resulting in excess currency appreciation. Chelsea’s 1.24% rate may yet look expensive in a year’s time, and I suspect that houses will start slowly rising up until the election and, following a Tory win, will take off.

    Reply
    Please complete the required fields.



  • Denmark down to MINUS 0.235 now. Negative rate doubling in a day. This could become exponential.

    Reply
    Please complete the required fields.



  • Germany smashing down to MINUS 0.175

    Record negative.

    Reply
    Please complete the required fields.



Add a comment

  • Your email address is required so we can verify that the comment is genuine. It will not be posted anywhere on the site, will be stored confidentially by us and never given out to any third party.
  • Please note that any viewpoints published here as comments are user´s views and not the views of HousePriceCrash.co.uk.
  • Please adhere to the Guidelines

Your email address will not be published. Required fields are marked *

You may use these HTML tags and attributes:

<a href="" title=""> <abbr title=""> <acronym title=""> <b> <blockquote cite=""> <cite> <code> <del datetime=""> <em> <i> <q cite=""> <s> <strike> <strong>