FX.co ★ Fundamental Analysis, December, 08 / 2011

Key to begin two days of the euro, and financial markets in general.

The appointment is in Brussels, and will run until Friday. On this particular meeting, to Germany, the euro principal advocate and supporter of most of the continent's weak economies, lowered their expectations about the results that may be offered to the end of it.

On the other hand, is known in monetary policy minutes followed by the European Central Bank. In this regard, it looks very probable that the entity again cut benchmark interest rate, which could be in 1% now.

Our view is that Europe should take various measures beyond rate cuts, or the unification of fiscal policy in order to succeed. It is virtually impossible for 17 countries, with huge social differences, with conflicting interests with totally different cultures, to agree to take steps that will have to suffer in one way or another.

So that is indispensable, as we said yesterday, deciding to change the system of transcendental measures to risk that if not done, remaining announcements made into nothing. For example, just look at what happened with Greece, from August, is announcing the adoption of the sixth stage of the rescue plan of its economy by 8 billion euros. If to apply the loan, with a tiny figure in relation to the problems facing Europe today, and it was a way to at least put cold cloths on the short term, you imagine how long it takes to make more widely known FEEF or to give financial aid to banks or states.

In another angle, lower the rate to 1% when it was increased two times this year, so would the level of March, when the situation was totally different, and looming as more manageable now.

Monetary policy should be, right now, quite aggressive and let the interest rate to zero. It's a coup that the ECB could take, so lower the cost of credit, and would lead to increased economic activity, which speaks little, or much less than rates, bonds and banks.

The third measure would be the creation of the Eurobond. Germany refuses to implement a new plan to be carried on economically, and only give fresh air to the states that do not meet anywhere near the required fiscal discipline by the Union.

With delays, but effectively, the Fed did not hesitate to put the money necessary to save companies, for injection into the economy to finance banks, and ultimately, to put out fires that formed by dropping to Lehman Brothers, error still pay the world.

He staggered not to lower the rate to virtually zero, and when he had doubts that there could be an increase of it, Ben Bernanke confirmed the agency's policy leaving unchanged interest rates until mid-2013, barring exceptional circumstances.

Of course, America has a say over their own economy that depends on the mood and the political fragility of presidents, leaders, prime ministers, and various election processes, as in Europe.

No wonder, then, that a survey of more than a thousand big investors see the U.S. as "the" country in which trust in 2012 from his last good macro indicators.

While the focus will be on the European Central Bank will take place before the announcement of the Bank of England, who will leave unchanged its interest rate.

And at 8:30 Eastern, will be available in U.S. weekly jobless requests, another key piece of the world's largest economy.