NEW YORK (Reuters) - Elections in Greece and France over the weekend have ushered in a new period of uncertainty for financial markets that could stand in the way of the easy-money rally that boosted stocks at the start of the year.
We’ve long maintained that Japan is ground zero for the “QE works vs QE doesn’t work” debate. The Fed’s economic models, and 99% of the economic models employed by Central Banks in general, believe that monetary easing can bring about an economic recovery. The primary argument for this crowd if QE has thus far failed to produce a recovery is that the QE efforts have not been big enough.
Submitted by Jen Alic of OilPrice.com, It hasn’t been a great year for Chesapeake Energy (CHK), just coming down from a management meltdown and now giving up on its leases in New York over the state’s ban on high-volume fracking.
Like a cartoon character whose legs continue to pump even after he has run off a cliff, Hong Kong's house prices have remained buoyant even as purchasing activity in the real-estate sector has crashed to levels not seen since the slump at the start of the millennium. The situation cannot continue indefinitely: sooner or later prices will follow sales down.
Marc Chandler submits:The US dollar is mixed at the start of the new week. The absence of London markets is serving to dampen turnover. The reluctance of the Bank of Japan to get ahead of market expectations saw the yen recover smartly after the greenback neared JPY86. Initial support for the dollar near JPY84.50 is likely to be tested shortly. For its part, the euro has been confined to its pre-weekend range. Three times in as many sessions, the euro was turned back from approaching $1.2780.
Italy has a debt rollover needs and the market just shut off efficient funding across the entire yield curve. There is no place to hide while waiting for the long-end of the curve to calm down.Yields are above 7% from 2-year bonds all the way to 10-year bonds, with an inversion in 3-year and 5-year yields vs. 10-year yields. Moreover the 2-year yield is very close to inversion as well.Sovereign Debt Table Italy vs. Germany
The Mole submits: With the US and much of Asia out on holiday Monday, and little in the way of substantial economic news, it should be no surprise that the price action has been very limited and subdued over the past 24 hours. European equities generally advanced modestly.