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Forex Flash: ECB independence undermined? – Deutsche Bank

FXstreet.com (Barcelona) - Overnight, the Bundesbank has provided a written opinion, dated December 21st, to the German Constitutional Court detailing a series of objections to the ECB's OMT program. The article, which cites a pre-published report from Handelsblatt, says that the objections include a potential worsening in credit risks on the ECB's balance sheet from sovereign bond purchases and an undermining of the independence of the ECB.

According to Macro Strategy Analysts J. Reid and C. Tan at Deutsche Bank, “Other objections from the German central bank include doubts that strong conditionality will be imposed on countries who apply for the OMT program.” The Bundesbank's opinion is part of a submission linked to a case to be heard in June by the Constitutional Court against the establishment of the European Stability Mechanism.

The comments come after Merkel told a banking conference yesterday that the ECB is in a difficult situation because it would probably have to "increase interest rates for Germany a bit", but for other euro members "it would actually need to do more to make sure that liquidity is available to firms".

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Commodities Brief – Precious metals rebound off European lows

The yellow metal was edging lower off its session highs (1476) ahead of the publication of GDP in the United States Friday. However, on the heels of mixed results, gold prices have once again rebounded, trending upward back to USD $1470.20 per oz. in these moments. Prolonged stability above the 1470 resistance and upside target could extend the bullish recovery into next week.
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