News & Analysis at your fingertips.

We use a range of cookies to give you the best possible browsing experience. By continuing to use this website, you agree to our use of cookies.
You can learn more about our cookie policy here, or by following the link at the bottom of any page on our site.

0

Notifications

Notifications below are based on filters which can be adjusted via Economic and Webinar Calendar pages.

Live Webinar

Live Webinar Events

0

Economic Calendar

Economic Calendar Events

0
Free Trading Guides
Subscribe
Please try again
EUR/USD
Bullish
Oil - US Crude
Mixed
Low
High
of clients are net long.
of clients are net short.
Long Short

Note: Low and High figures are for the trading day.

Data provided by
Wall Street
Mixed
Gold
Mixed
GBP/USD
Bearish
USD/JPY
Bearish
More View more
Real Time News
  • Looking for a new way to trade reversals? One of the most used reversal candle patterns is known as the Harami. Like most candlestick formation patterns, the Harami tells a story about sentiment in the market. Get better with trading reversals here: https://t.co/rfwUWJfbz9 https://t.co/jmcAIW4w5k
  • It’s important for traders to be familiar with FX spreads as they are the primary cost of trading currencies. Understand a pair's spread here: https://t.co/zEEUHZBx7g https://t.co/M9isuvnzqF
  • The British Pound is giving back some of its multi-month gains with some pairs testing notable support despite a positive fundamental backdrop. Get your market update from @nickcawley1 here: https://t.co/6Ct5R0H41F https://t.co/c4rXmMjMrv
  • Dealing with the fear of missing out – or FOMO – is a highly valuable skill for traders. Not only can FOMO have a negative emotional impact, it can cloud judgment and overshadow logic. Learn how you can control FOMO in your trading here: https://t.co/lgDf5cVYOn https://t.co/4dhCP5pnxM
  • Gold is facing the neckline of a Double Bottom Pattern after bouncing off a confirmed longer-term trendline. Is a bullish reversal in order? Get your market update from @FxWestwater here: https://t.co/kLXZewWBMd https://t.co/w1Nu0z569m
  • Central banks often deem it necessary to intervene in the foreign exchange market to protect the value of their national currency. Learn how central bank intervention can impact your trading here: https://t.co/8G8mUX4so6 https://t.co/Gn41XsGktg
  • Rollover is the interest paid or earned for holding a currency spot position overnight. Learn how to earn rollover interest on your open positions here: https://t.co/SRsG8CxjEn https://t.co/2AR1qgx0tz
  • The New Zealand Dollar is in a tricky spot. On one hand, rising stocks can propel NZD. On the other, a dovish RBNZ ahead could cool bond yields as the government tackles soaring housing costs. Get your market update from @ddubrovskyFX here: https://t.co/5rjm2gr3EL https://t.co/aLwhWHMPqz
  • Knowing how to accurately value a stock enables traders to identify and take advantage of opportunities in the stock market. Find out the difference between a stock's market and intrinsic value, and the importance of the two here: https://t.co/QszmdZFxlk https://t.co/obH0RFLKhC
  • It was a big Q1 for $USDJPY but so far Q2 has been a far different tone. Which side will prevail? Get your market update from @JStanleyFX here: https://t.co/TxlD3zoglZ https://t.co/rUQnokAx30
Euro, Swiss Franc, European Bond Markets Eye Yellow Vest Protests

Euro, Swiss Franc, European Bond Markets Eye Yellow Vest Protests

Dimitri Zabelin, Analyst

TALKING POINTS – EURO, SWISS FRANCE, YELLOW VEST PROTESTS

  • French Yellow Vest protests re-emerging
  • Fiscal spending may douse political fires
  • What are the longer-term consequences?

See our free guide to learn how to use economic news in your trading strategy!

France’s “gilet jaunes” or Yellow Vests protests are re-erupting after a brief period of respite. President Emmanuel Macron is once again on the defensive and has vowed to crack down on the violent outbursts. This comes after he attempted to appease the protesters by repealing his proposed fuel tax and introducing new minimum wages laws to address the high cost of living.

His new policy measures may take France beyond the EU-wide fiscal regulation of a 3 percent deficit constraint and could rattle European markets and make Euro bulls jitter. Italy – which notoriously shook up the bond markets in 2018 – had to trim down its ambitious budget plans because it violated European laws. If France were allowed to bend them, it could make Brussels look hypocritical and biased in its application of the law.

This in itself would have broader political ramifications that could undermine Eurozone growth and stability. If you want to learn more about this, you may follow me on Twitter @ZabelinDimitri.

If France were to use fiscal measures to provide an economic boost, the key question is whether that growth is sustainable. If it is, then the debt incurred could then be offset by the productive ends it achieves. However, if the funds are not allocated to address key structural reforms and only jolts the economy before shortly evaporating, it poses longer-term risks which could destabilize regional financial activity.

Another big concern is: if France goes on a fiscal spending spree, will it then – as a core Eurozone economy – set a precedent for fiscal exceptionalism (arguably like Italy), and will it be able to service the debt? If multiple member states undergo a similar endeavor and end up with greater debt with little to no change to the longer-term growth trajectory, that could sound the alarm of insolvency in the bond markets.

As in the case of Greece, when the perception of a government’s ability to service its debt is compromised, it often fuels capital flight and sends yields higher, making repayment more difficult. This increases the risk of the bond even more, and causes interest rates to rise, and so on and so forth. It is not outlandish to suggest that a Eurozone contagion effect could emerge if states undergo a radical fiscal program that undermines their economy in the long-run if it is executed poorly.

Macron’s proposals of new minimum wage laws and tax cuts for pensioners are estimated to cost between 8-10 billion Euros. The bigger question is, can France financially – and the Eurozone, politically – afford it? The ECB has limited tools to address such a crisis with rates already below zero and new liquidity provisions in the form of TLTRO’s introduced at the last policy meeting.

In such an outcome, the Euro would probably take a hit – as it did during the Greek debt crisis – with local, and possibly global equity markets hurting as well. However, the anti-risk Swiss France (CHF) may rise during this time as investors shift from chasing yields to preserving capital. CHF may outperform relative to the Japanese Yen and US Dollar because of its regional proximity to the European-based event risk.

Chart Showing EUR/CHF Falling as Geopolitical, Economic Risks Rise in Europe

Chart Showing EUR/CHF

FX TRADING RESOURCES

--- Written by Dimitri Zabelin, Jr Currency Analyst for DailyFX.com

To contact Dimitri, use the comments section below or @ZabelinDimitrion Twitter

DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.

DISCLOSURES