UBS and downs

mar bonnin palmer

Central banks offer up funding for the Eurozone
-UBS suffers $2bn losses from rogue trading
-US manufacturing data disappoints
-UK retail sales contracts in August

We are far from seeing a complete reversal of fortunes for the Eurozone and in many investors’ minds a Greek default is still on the cards. However, the pledges of support continue to flood in be it from China, Merkel, the proposal of Eurobonds or the action taken yesterday by the world’s largest central banks. The ECB teamed up with the Fed, BoE, BoJ and the Swiss national bank to conduct 3 liquidity providing operations that will expire in 3 months’ time. The US Dollar loans will ensure that Eurozone banks have sufficient funding up until the end of the year. This is by no means a silver bullet but what is of particular reassurance is that every time the Eurozone needs extra help, somehow they always get it. The single currency has strengthened significantly throughout the week; GBPEUR has moved 3 cents lower from the dizzy heights of 1.17 seen earlier this week.

Manufacturing data from the US disappointed to the downside yet again. Empire state manufacturing and the philly fed both posted negative readings in August. The data was shrugged off by equity markets but with unemployment remaining persistently high in the US traders cannot be too confident of a global recovery getting back on track.

UK retail sales contracted by 0.2% in August which will add further weight to the argument for further QE. Some of the slow-down has been attributed to the nationwide riots that forced shops to close early and kept consumers indoors.

In other news, the name Kweku Adoboli will enter the history books alongside Nick Leeson and Jerome Kerviel. The rogue trader has allegedly racked up losses of $2 billion on UBS’s balance sheet following a string of unauthorised trades. UBS profits will be all but wiped out in Q3 but as the revelation was more company specific other financial stocks still performed well yesterday.

Company Details

UBS and downs

Get a quick quote

Open Account with FC Exchange

FC Exchange are located at:
Salisbury House, Finsbury Circus, Greater London, EC2M 4QQ, United Kingdom

Get a Quick Quote

Newsletter Signup to CMT

Sign up to our foreign exchange newsletter to receive news updates directly by email

Compare Money Transfer will not Share your details!

Bank Exchange Rates Comparison

High St Bank Exchange Rate

All Rights Reserved: Copyright 2006 - 2018 Compare Money Transfer Limited offering FCA Regulated Suppliers - 34 New House, 67-68 Hatton Garden, London, EC1N 8JY. +44 (0) 843 357 4882