sovereign debt crisis

The following is excerpted from today’s UBS research note by Stephane Deo, Paul Donovan and Larry Hatheway on the consequences of a euro break-up. The full note is embedded below.

Dollar firmer across the board amid month end repositioning; US futures suggest modest decline. Markets likely to remain sensitive to DM economic data; Case-Shiller & FOMC minutes are key today. EM continues trade directionless for now…

The Greeks are starting to play hardball on their private sector debt swap warning the deal could crater if the 90 percent participation is not met. We think there are other reasons why it is trouble.

The fact that Italy's 5-year CDS prices remain elevated (376 now vs 388 on Aug 4 peak) warns that ECB bond buying, fiscal austerity has not convinced private sector investors that the worst is truly past. This offers a poor backdrop from…

The impact of Fed Chairman Bernanke’s testimony – his assessment of the economy and the further accommodation that can be provided to stem economic stresses into next week - will dominate market action into the next week. The G10 currency…

This has been an extremely tumultuous week throughout the capital and commodity markets. August itself has been a cruel month. The German stock market has lost around a quarter of its value. A marked slow down in the US and Europe in Q2 has…

This week's Outside the Box is in the tradition of showing the other side of the argument. Normally, anything George Soros says or does politically has my blood pressure up about 20 points. Yet, I posted another piece of his today in Over…

The Italian debt markets are a lot calmer this week than they were the week before last because the level of Italian bond yields is now more or less completely guaranteed by the European Central Bank (the ECB). However, Italy’s problem is…

In 2010, Euro area’s savings were insufficient to finance investment. Business needed to borrow to finance their investments and households savings were not enough to fill the gap. This is why the euro area runs a current account deficit,…

Markets stable but tone remains fragile. SNB expanded its sight deposit target; no EUR/CHF peg. BoE’s decision to stay on hold was unanimous. New measures announced by China boost CNY internationalization and integration with HK.