Cyprus has put the PIIGS front and center again just when market participants thought that ship had finally sailed. Citizens of the PIIGS, in particular, should rightfully be concerned about the possible seizure of their bank accounts. Furthermore, if you have money parked in any country that was on the brink of a bailout, you are headed to the ATM right now and to the teller window come Monday. So what does this have to do with sterling? Just when it looked like the weak GBP trend would resume in this new trading week, expect sterling to strengthen on the back of safe haven flows behind the USD, CHF, and JPY. While this is certainly the case for the Monday open, will this new safe haven status really last? With all the news from the UK this week — CPI, BoE minutes, unemployment report, and retail sales — one can have her doubts. Not to mention the RBA and FOMC minutes releases too. Remember it is market reaction to the news, not the news itself, that dictates price action. This week will be no different.
- Moving the Bank to a growth target would be ‘dangerous’, says Dale (Telegraph)
- Budget 2013: What might be in it? (BBC)
- King: Bank won’t drive down pound (City AM)
- The madness of the bailout in Cyprus (Maximise)
- Two Sides of Cyprus (Bruce Krasting)
- The Cyprus Bank Bailout Could Be A Disastrous Precedent: They’re Reneging On Government Deposit Insurance (Forbes)
- Cyprus bail-out risks UK troops’ savings (Telegraph)
- Sometimes it’s the little things that matter (StockTwits)