Second Thoughts
"Mars", "Microsoft", "Mercedes-Benz"; these are all recognisable trademarks. But "Man of the Match"? Astonishingly, an intellectual property rights firm called OFS Group has been able to register the phrase as a trademark and can charge a fee every time it is used. So will TV and radio commentators economise by praising the "Geezer of the Game" or will they just pay up and look big?
None of the major currencies was looking particularly big on Monday and investors were showing no inclination to pay up. The Tokyo bank holiday got things off to a slow start and the lack of tradable economic data made it difficult for the market to pick up momentum. Sterling was the overall winner but its greatest achievement was the cent it picked up against the Australian dollar. It managed only about half of that against the euro and the yen and is unchanged against the US Dollar.
Investors were left to ponder their second thoughts on the developments of the previous few days in Europe and the States. Whilst the Federal Reserve's quantitative easing (QE) was no great surprise, there has been some head-scratching about this latest iteration of QE. By spending $40bn a month on mortgage bonds, extending "operation twist", in which it swaps long-term bonds for those with shorter maturities, and keeping interest rates near zero for another three years, the Fed delivered everything the market had been looking for and then some. What was the thinking behind the decision? Investors will have to wait for the minutes of the meeting to find out.
In Euroland it was the matter of what was not happening that exercised investors' imagination. The EU finance and economics ministers' weekend meeting in Cyprus apparently brought nothing new, just reminders that not every member state is in favour of a unified bank supervision mechanism and that there is no prospect of a pan-EU deposit guarantee scheme.
As for the European Central Bank's (ECB) plan to buy unlimited amounts of Spanish government debt, Mario Draghi can do nothing until Spain asks for help. And at the moment it looks as though Prime Minister Rajoy is inclined to take advantage of the ECB threat without paying the austerity price. Some find this freeloading irksome. Yesterday Belgian central banker Luc Coene told Sr Rajoy to get on with it and pull the trigger. If Spain fails to ask for help, said M. Coene, "it will not last long before spreads will rise again, and then Spain will be forced to come back on its decision and submit to the conditionality programme." As yet there has been no response from Madrid.
Today's schedule is far from hectic but should at least be more interesting than Monday's. UK inflation comes first, with CPI forecast to have risen by 2.5% in the year to August. Half an hour later ZEW reports on economic sentiment in Germany and Euroland. After lunch the US reveals the international investment flows for July and this month's NAHB housing market index.
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Foreign currency exchange and international money transfer from http://www.moneycorp.com the UK's leading independent foreign currency exchange brokers.
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