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• ForexLive North American wrap: They had bears for dessert
• Poll: Is the yen turn for real?
• Greece PM: Debt Talks To Go “Until The Last Minute”
• Best trade this week: Long EUR/JPY
• Cracks in the Australian mining boom
• Next Wk/US: Beige Bk, Chi Rpt, Rev GDP, Housing Data,Durables
• Portuguese tax revenue continues to fall
• S&P 500 closes at the high of the day
• Another reason to sell the yen
• After Thanksgiving, hunger downgraded
• Fresh highs
• EU Budget Talks End With No Deal; To Resume Early 2013
• ECB Merkel: Reject Greece Haircut;Want To Find Other Solution
• Cutting through the levels
• Rajoy says Spain wants Greek problem fixed next week
• Germany Schaeuble: Confident Will Find Solution For Greece
• European stocks close out a sparkling week
• Cameron says EU institutions living in a ‘parallel universe’
• Van Rompuy sees potential for EU budget deal in early 2013
• Schaeuble: Confident on solution for Greece

ForexLive North American wrap: They had bears for dessert Posted: 23 Nov 2012 01:25 PM PST Canada Oct CPI +1.2% y/y vs +1.1% exp Schaeuble: Confident on solution for Greece Rajoy says Spain wants Greek problem fixed next week Belgium business sentiment -13.4 vs -13.5 in October BOE not looking at alternatives to QE or funding for lending – Miles EU summit to discuss long-term budget called off – RTRS Van Rompuy sees potential for EU budget deal in early 2013 Hungary downgraded to BB from BB+ by S&P Gold +$23 to $1753 — 5-week high S&P 500 +1.3% to 1409 EUR leads, USD lags Americans ate turkey for dinner on Thanksgiving but the market ate up the bears on Black Friday and spit them out. It was a one-way train with the US dollar and yen falling against everything else in US trading. There wasn’t a clear spark for the moves so it remains to be seen whether they will continue on Monday. I warn that stocks gained every day this week, so the odds are against it. Have a great weekend.

Poll: Is the yen turn for real? Posted: 23 Nov 2012 12:16 PM PST I think it is. Almost every strategist I know thinks the same thing. The problem is that we have all been here before. The speculative market has wanted to short the yen since 2008 but has been repeatedly stifled and scarred. If this is the turn, knowing that the market is gun-shy tells you something. It tells you that the would-be yen shorts are waiting on sidelines. They want to jump in but they’re nervous because they’ve been burned before. Once they’re convinced, they are going to jump in with both feet and the move will be swift and relentless and more and more people chase the move. If this is the turn, my feeling is that you always want to hold a small yen short. If not, chasing the moves will tear you apart.

Greece PM: Debt Talks To Go “Until The Last Minute” Posted: 23 Nov 2012 11:40 AM PST BRUSSELS (MNI) – Talks for a Greek debt deal and disbursement of a long-delayed E31.5 billion loan tranche will continue “until the last minute” and at all levels, Greece’s Prime Minister Antonis Samaras said Friday. Speaking at a press conference at the end of a two-day EU leaders’ summit here, Samaras expressed optimism that the euro area finance ministers would reach an agreement at their meeting on Monday evening. “I believe there is real progress at all levels. Indeed, we can push for a solution that will be beneficial for our country,” Samaras said. “The past two days I have met with many of my counterparts and discussed the EU cohesion funds issue and the loan tranche.” Among the officials Samaras spoke to were German Chancellor Angela Merkel, French president Francois Hollande, Italian and Spanish premiers Mario Monti and Mariano Rajoy, and Eurogroup head Jean-Claude Juncker, as well the prime ministers of Ireland, Portugal, Belgium, Slovenia and Britain. “Most of them are supporters of Greece, but I cannot tell you more [about an evolving agreement],” Samaras said. He expressed satisfaction at a change of sentiment towards Greece, saying “it is of prime importance that the view that Greece is to blame for all delays has ceased to exist.” Asked to elaborate on the deal now being discussed to reduce Greek debt, Samaras refused to give details. He said he was prepared for any outcome and he had contingency scenarios for them, but added it was not wise to talk about them. As regards the debate on the allocation of EU cohesion funds, Samaras said that he “put up a big fight” so Greece would have preferential treatment. “The data used for the new funds now allows us to refer to the period before 2009,” Samaras explained. “We want a recalculation based on the current data and the 6-year recession Greece is in, and the problems we are facing.” He added: “Our request was received positively.” Greek government officials said later that Greece had done more than it was asked to do and it was now time for the lenders to live up to their side of the bargain. These officials argued that fact Greece has done what it promised shows that the real reason behind the inability to reach agreement so far is the discord among Eurozone governments. The same officials explained that a final deal on Greek debt had not been possible at the Eurogroup meeting Tuesday night, because there were too many complications and technical difficulties with the calculations. “It was fortunate that we did exactly what we were asked to and passed all 72 prior actions [required by the official lenders],” one government official said. “Because if we hadn’t, then the Eurogroup wouldn’t have disagreed on Tuesday. They would have agreed – to kick us out of the Eurozone.” Samaras will not return to Athens immediately. Instead, he will remain in Brussels since he is scheduled this evening to speak on the telephone with IMF Managing Director Christine Largarde and U.S. Treasury Secretary Timothy Geithner. On Saturday, at 1530 GMT/1030 ET, the Eurogroup finance ministers are expected to hold a teleconference to prepare for Monday’s meeting. –Athens bureau; apapamiltiadou@mni-news.com [TOPICS: M$X$$$,M$Y$$$,M$$EC$,MGX$$$,M$$CR$]

Best trade this week: Long EUR/JPY Posted: 23 Nov 2012 11:30 AM PST Big moves in the world of FX this week but none bigger than EUR/JPY, which gained 3.1%. The pair had its best week since February and gained +350 pips. The yen has been the laggard for two weeks in a row and EUR/JPY has gained 700 pips in that time. Last Friday, I showed a similar chart and warned the yen crosses were on the cusp of breaking out. It’s a beautiful move above the range that has persisted since August and it has broken the 61.8% retracement, which points to an eventual move to 111.44. Before we get the next leg higher, I expect a retracement back to the old range in order to relieve some overbought conditions. The risk is that the dip is shallow before the climb continues.

Cracks in the Australian mining boom Posted: 23 Nov 2012 11:05 AM PST The Age talks about the looming slowdown. There are growing signs the investment peak will be smaller, and occur sooner, than expected. The $6 billion Oakajee port and rail project in Western Australia was put on ice this month, and claims of cost blowouts are dogging the country’s largest resource development, Chevron’s Gorgon liquefied natural gas project. Aside from the boom’s long-term legacy, these cracks in the investment pipeline raise a more immediate concern: what will fill the gap after mining investment peaks some time next year? Australia will export more natural resources as projects are completed but the value of those exports will be a fraction of the the dollar-value of the investments. It is inevitable that AUD begins to fall in 2013.

Next Wk/US: Beige Bk, Chi Rpt, Rev GDP, Housing Data,Durables Posted: 23 Nov 2012 11:00 AM PST By Kasra Kangarloo WASHINGTON (MNI) – The week ahead will feature a number of prominent releases, including housing data, consumer confidence and the preliminary third-quarter GDP report, revising October’s advance report. Regional releases include the November MNI Chicago Report Friday at 9:45 a.m. ET, the November Dallas Fed manufacturing index Monday at 10:30 a.m. ET, and the November NAPM-Milwaukee manufacturing index Friday at 9:00 a.m. ET. The housing market has so far maintained its recent gains for the month of October, with higher-than-expected sales of existing homes and housing starts. New home sales and pending home sales, to be released Wednesday at 10:00 a.m. ET and Thursday at 10:00 a.m. ET, respectively, are next in line for October. House price data include the September Federal Housing Finance Authority’s home price index, to be released Tuesday at 10:00 a.m. ET, and the September S&P Case Shiller house price index, to be released Tuesday at 9:00 a.m. ET. Housing prices have also started to gain traction in recent months, as the surplus of lower-priced foreclosed homes has finally started to run off. The second estimate of third quarter GDP will be released Thursday at 8:30 a.m. ET. The first estimate showed a surprise to the upside, though it was offset by the effects of the Midwestern drought and waning exports. November consumer confidence, to be released Tuesday at 10:00 a.m., could hold some surprises on account of the presidential election, as high-profile political events can often have an outsized impact on consumer expectations. Regional releases include the November MNI Chicago Report Friday at 9:45 a.m. ET, the November Dallas Fed manufacturing index Monday at 10:30 a.m. ET, and the November NAPM-Milwaukee manufacturing index Friday at 9:00 a.m. ET. October durable goods orders will be released Tuesday at 8:30 a.m. ET. Durables have been highly volatile in past months on account of shifting transportation orders, with core orders mostly on the weaker side. The Federal Reserve’s beige book report will be also be released Tuesday at 2:00 p.m. ET. Other data to be released over the week include October personal income and spending Friday at 8:30 a.m. ET, initial jobless claims Thursday at 8:30 a.m. ET and the November Chicago Federal Reserve national activity index, released Monday at 8:30 a.m. ET. — Kasra Kangarloo is a Washington reporter for Need to Know News ** MNI Washington Bureau: 202-371-2121 ** [TOPICS: M$$FI$,M$U$$$,MAUDS$]

Portuguese tax revenue continues to fall Posted: 23 Nov 2012 10:36 AM PST In the Jan-Oct period: Revenue from indirect taxes -4.5% Revenue from direct taxes -3.7% Spending +0.7% Deficit at 6.05B euros.

S&P 500 closes at the high of the day Posted: 23 Nov 2012 10:07 AM PST The S&P 500 gained  18 points, or 1.3%, to 1409. That’s the highest since the day after the US election. On the week, the S&P 500 gained 3.6%.

Another reason to sell the yen Posted: 23 Nov 2012 09:55 AM PST Mitsubishi UFJ says its keen on a big US acquisition or series of deals to become a top 10 US bank, according to an exec cited by RTRS. The government has been pushing companies to take advantage of the strong yen and it’s starting to work. Not much happening in USD/JPY today but the crosses are closing out an outstanding week in style.

After Thanksgiving, hunger downgraded Posted: 23 Nov 2012 09:13 AM PST Hungary too, to BB from BB+ by S&P

Fresh highs Posted: 23 Nov 2012 09:10 AM PST EUR/USD up to 1.2982 and cable is just a few pips away from 1.6050.

EU Budget Talks End With No Deal; To Resume Early 2013 Posted: 23 Nov 2012 09:10 AM PST BRUSSELS (MNI) – EU leaders ended a two-day summit on Friday with no agreement on the 27-country bloc’s next seven-year budget, but agreed to reconvene the talks early next year. The leaders failed to bridge deep differences over the total size of the budget, as well as where the burden of cuts should fall. EU Council President Herman Van Rompuy had proposed numerous compromises to try to balance conflicting demands by member states. Germany, the UK, Sweden and the Netherlands argued for cuts and modernization of budget priorities, while France and Italy mounted a strong defense of traditional spending on agriculture and development funds for the EU’s poorer members, the two largest budget components. Deep differences also remained over UK-led demands to cut the budget of the EU institutions to show voters that Brussels-based “Eurocrats,” with some of the safest jobs in the world, were not immune to the austerity programmes they have urged governments to embrace. Putting a brave face on the failure of the talks, Van Rompuy told reporters that progress had been made and that there was now a “sufficient degree of potential convergence to make an agreement possible in the beginning of next year.” EU Commission President Jose Manuel Barroso, who had proposed an increase in the EU’s budget to boost infrastructure spending and other growth-enhancing projects across the EU, said that “another round was needed before concluding” and that it was important to “focus on the quality” of the deal. The Commission’s main priority is to “modernize the budget” so that it can have a greater impact on growth and jobs, he said. The next EU summit, scheduled for 13-14 December, will remain dedicated to agreeing ON the framework for a common supervisory system for the Eurozone’s banks, the two EU leaders said. –Brussels Newsroom, +324-952-28374; pkoh@mni-news.com [TOPICS: M$X$$$,MGX$$$,M$F$$$,M$X$$$,M$G$$$,M$B$$$]

ECB Merkel: Reject Greece Haircut;Want To Find Other Solution Posted: 23 Nov 2012 09:00 AM PST BRUSSELS (MNI) – German Chancellor Angela Merkel Friday reiterated her opposition to a haircut on Greek debt, predicting that Eurozone finance ministers would find a solution Monday to plug the financing gap Athens is facing. Speaking to reporters following the summit meeting of European heads of state and government here, Merkel played down the failure of last Monday’s Eurogroup meeting to reach an agreement. “There is no delay,” she asserted, adding that the lower house of German parliament “wanted to vote on it next week anyway.” The Bundestag is expected to vote on approving further aid for fiscally troubled Greece on November 30. An agreement on Greece “is being intensively worked on,” Merkel insisted. Athens has “fulfilled the pre-conditions and thus expectations are high in Greece.” The aid “would help growth, and I think…we all understood the urgency, and it is being worked on with vigor,” she said. Asked again about her view of a haircut, Merkel said, “We reject this haircut. We want to find another solution and I think it is quite feasible but it is not yet there.” She added that she hoped finance ministers would succeed in reaching an accord at their gathering on Monday. –Frankfurt bureau tel: +49-69-720-142. Email: dbarwick@mni-news.com [TOPICS: M$X$$$,MT$$$$,M$$EC$,MGX$$$,M$$CR$,M$Y$$$]

Cutting through the levels Posted: 23 Nov 2012 08:58 AM PST This might be the best US trading session in weeks. Nice, steady but strong moves across the board. The euro has taken off since breaking the 55-day moving average. The next levels of resistance is ahead of 1.3000. We’re starting to see some profit taking. US stocks and bond markets close in an hour (1800 GMT) and it could continue afterwards. Still, it’s an impressive day.

Rajoy says Spain wants Greek problem fixed next week Posted: 23 Nov 2012 08:50 AM PST Says Greece is meeting its commitments Spain favors helping Greece An absolute shocker that Spain is in favor of free money to bankrupt countries.

Germany Schaeuble: Confident Will Find Solution For Greece Posted: 23 Nov 2012 08:40 AM PST FRANKFURT (MNI) – German Finance Minister Wolfgang Schaeuble Friday said he was confident a deal could be reached on the question of Greece’s debt sustainability, which will be discussed again Monday by Eurozone finance ministers. Speaking at the European Banking Congress here, Schaeuble acknowledged it was “not easy to close the gap in debt sustainability” that had emerged as a result of worse-than-expected growth in Greece. “I am confident that we will find a solution … we simply have to do this,” Schaeuble said, adding that a deal on Greece would mean contagion to other Eurozone members “will be reduced, step by step.” Schaeuble said the European aid programs for Portugal and Ireland had been “extraordinarily successful.” The EU aid program for Spain was also “on a good path,” he said, welcoming the news that Spain will likely only need less than 50% of the E100 billion that had been made available for its bank recapitalization. While he hopes governments will be able to finalize a legal framework of the banking union by the end of the year, Schaeuble said that he is not sure whether this can be achieved. He stressed that an effective banking union should not only comprise the euro area, but as many EU countries as possible. Since this raises questions over the ECB’s role as chief regulator and supervisor, limited treaty changes are under consideration, Schaeuble said. The German finance minister also affirmed his previous position that the banking union will not include a joint deposit guarantee. “Deposit guarantees will remain on national levels,” he said. – Frankfurt bureau: +49 69 720 142; email: frankfurt@mni-news.com [TOPICS: M$X$$$,MGX$$$,MT$$$$,M$$CR$,M$G$$$]

European stocks close out a sparkling week Posted: 23 Nov 2012 08:34 AM PST UK FTSE +0.5% German DAX +0.8% French CAC +0.7% Spain IBEX +0.3% Italy MIB +0.5% All five indexes gained every day this week.

Cameron says EU institutions living in a ‘parallel universe’ Posted: 23 Nov 2012 08:24 AM PST Says they must adjust to the real world of budget cuts There is no excuse for not taking a tough line on EU spending Plenty of politicians have campaigned on budget cuts and fiscal responsibility but you’ve got to hand it to Cameron — he actually believes what he says.

Van Rompuy sees potential for EU budget deal in early 2013 Posted: 23 Nov 2012 08:06 AM PST Another 3-5 summits should do it.

Schaeuble: Confident on solution for Greece Posted: 23 Nov 2012 08:00 AM PST Confident we will find a solution on Greece Deal on Greece should ease contagion risks ‘We’ll get a reasonable result’ for EU budget Cutting debt and deficits will restore euro trust

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