Does No Mean No Problem?

Ok, so Ireland voted “No” to the Lisbon Treaty - So for now the EU Constitution is in question and will need to re-drafted. At first glance this would seem to be destabilizing for the Euro. However, this may actually  be “Euro Positive” as it will keep the status quo for now. This “No Vote” leaves Trichet and the European Central Bank with no official Parliament to answer to.  There is less oversight, and less political interference form member states. In fact Trichet is arguably the most recognized and powerful figure in the European Union - and he probably likes it that way!

                                  The Trichet Smile!

The Euro consolidated in a tight range - (Click to Enlarge Chart)

G-8: What if They All Raise Rates?

The Finance Ministers of the G8 Meet in Japan this weekend and it will be interesting to see what the communiqué says. Recent grumblings about wanting to raise rates have been heard coming from the Bank of Canada and Japan. Singing in tune with the ECB and the BOE, perhaps the US will start doing something more than whistling. Putting it all together, there may be a consensus amongst all central banks to raise rates - effectively leaving the differential unchanged - and everyone happy.

Dollar Ready for a Rally?

The next FOMC announcement is scheduled for June 25th. Up until now talk has been cheap - Now It’s Show Time! Paulson, Bernanke, and Bush in recent days (and years) have been talking about their strong US Dollar policy. Signs of action and maybe even “intervention” to shore up the US Dollar will need to be seen soon - or the US will lose even more credibility.

Dennis Gartman “Smells” Something in the Air

The Gartman Letter on Thursday was quoted as saying, “We fear that Washington is preparing some material action that will shake the dollar bears from the positions with a “Old Testament-like” vengeance. Call it traders intuition or call it what you will but we “smell” something.”

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