Weekly review

 No Chinese Takeaway

The Chinese rescued the week after denying the rumors that they were reviewing European Debt Holdings, confirming the Euro zone as one of the most important Investment Markets.
Hardly surprising when they have half a Trillion dollars worth of investments to protect.
The effect was to reverse the recent decline in Equities Oil and commodities together with the commodity currencies.
The Euro faired less well and thus far has achieved very little in terms of a rebound against the dollar closing just below the 1.2300 level. Against the recovering Australian and Canadian dollars it lost over 4% and 3% respectively.
The week ahead will again focus more on the equity markets for a lead although statistics , ISM indices and Non Farm payroll may add some weight.
Next weekend sees the G 20 meeting in Korea and one suspects voices to try and steady the markets. The worry that the Euro zone led panic will push Europe and perhaps elsewhere into a double dip recession will be high on the agenda.

Technically all eyes will remain on equity markets and on balance the likelihood that we have not yet seen a bottom will hang over markets. The Euro Dollar level of 1,2140/50 remains crucial but the odds are that it will be taken out  if equity markets and risk appetite in general suffer.That will lead to pressure on the 1.20 level

The Euro debate commands ever more press space. Whatever the immediate outcome further out into summer the problems will probably surface but may take a lead from how the austerity measures are reflected in civil unrest or not.