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Key News
- Fitch: U.K. Fiscal Challenge ‘Formidable’ (Wall Street Journal)
- Bernanke Says Fed Likely to Increase Rates Before Full Employment in U.S. (Bloomberg)
- Investors Favor Obama's America Over BRICs in Poll Showing Lost Confidence (Bloomberg)

Quotable
“So far, markets have given the U.S. a longer leash. The danger is that we’ll hang ourselves on it.”
- Mark Whitehouse, The Wall Street Journal

FX Trading – US Facing Unavoidable Sovereign Debt Crisis?

Ok, we all know the story (even though it’s been thrown on the backburner with the ongoing implosion of Europe): the US dollar is doomed because of the growing deficits and debt in the United States.
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Key News
- German factory orders, adjusted for seasonal swings and inflation, rose 2.8 percent from March, when they surged 5.1 percent, the Economy Ministry in Berlin said today. Economists had forecast a 0.4 percent drop (Bloomberg)
- China will apply its tighter second- home mortgage policies to loan applicants. (Bloomberg)
- The 10-year German Bund yield hit a record low on Monday. (Reuters)

Quotable
“It shouldn't surprise anyone that the nine states without an income tax are growing far faster and attracting more people than are the nine states with the highest income tax rates. People and businesses change the location of income based on incentives.

Likewise, who is gobsmacked ...

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Key News
If the European climate turns nasty, the ECB could suffer from exposure. (Telegraph)

Quotable
“[ECB] Credibility undermined: First, the ECB had to make a climb-down on its collateral rules by accepting Greek government bonds irrespective of their credit rating. While justified as an exceptional step, it seems clear that the ECB will not be able to deny similar treatment to any other member state getting into trouble. Second, the decision to buy government bonds in the ‘dysfunctional' secondary market was a big step, as can be seen by the open controversy it created in the ECB Council. While these purchases do not violate the Maastricht Treaty, which only rules out direct lending to governments or bond ...

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Key News
- U.K. Gilt Auction Sees Strong Demand The U.K.'s second gilt auction of the week also met with strong demand -- evidence that U.K. government bonds are still seen as safe havens despite debt troubles in the euro zone. (Wall Street Journal)
- Asia Shares Rise Broadly Asian stock markets ended higher Thursday, with Japan's Nikkei Stock Average marking its biggest rise of the year as exporters cheered the yen's fall. (Wall Street Journal)

Quotable
“Good tests kill flawed theories; we remain alive to guess again.”
Karl Popper

FX Trading – A short opportunity in Australia dependent entirely upon others.

You might remember I kicked off the show on Tuesday by touching ...

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