5bn Stock Market

Consolidation Continues Post The Spanish Bond Auction The big event of the morning was the Spanish bond auction, however it failed to generate anything more than an immediate ripple in the FX market. The auction raised just below the top of its target amount of EU2.5bn, at EU 2.49bn. Although demand was strong, Madrid had to pay up to attract investors to its debt. The yield on the 2015 debt it sold jumped to 4.375% vs. 2.89% at an auction in April, the 2016 debt sold with a yield of 4.876% vs. 4.037% at an auction earlier this month. Will Germany soften its stance? In the aftermath, EURUSD is down about 20 pips but it remains above 1.27, while Spanish bond yields have actually fallen. The consolidation period in the market may continue as we lead up to the G8 summit in the US this ...

Fundamental Analysis EUR "We expect euro-region inflation to normalize in 2013" - Michael Schubert, an economist at Commerzbank AG Inflation in the seventeen nation bloc eased to 2.6 per cent in March from 2.7 per cent the previous month, said the European Union’s statistics office in Luxembourg on Wednesday. USD "Uncertainty about Greece and the effects a potential exit out of the euro would have on Europe, the global economy and the financial system in general is driving investors out of stocks into safe havens" - Markus Huber, head of German sales trading at ETX Capital The Standard & Poor's 500 lost 0.44%, or 5.86 points, to 1,324.80. The Dow Jones Industrial Average declined by 0.26%, or 33.45 points, to 12,598.55. GBP Unemployment figures are a "welcome step in the right ...

U.S. Dollar Trading (USD) the mood soured overnight in the US session and into Wednesday’s Asian session as rhetoric of the Greece far left politicians suggested the recent bailouts may be torn up and Greece forced to exit the Eurozone. The EUR/USD has broken below 1.3000 once again and Gold is falling heavily as USD and cash become king. Looking ahead, FOMC Member Pianalto. The Euro (EUR) focus has swung back to the Europe and the Greece elections continuing to have negative effects on the market. The Greece political stalemate is unlikely to end shortly and the uncertainty will likely lead to more selling. Major support is seen at 1.2950 and we are poised to test this level this session. The Sterling (GBP) The GBP/USD was sold down to the 1.6125 on the risk aversion but EUR/GBP selling ...

U.S. Dollar Trading (USD) the USD was strong against all major except the other safe haven Yen with stock markets crashing on Friday and then again on Monday morning Asia. The main concern on Friday was weaker than expected NonFarm Payrolls from the US in April at +115k vs. 173k forecast. Looking ahead, March Consumer Credit forecast at 9.5bn vs. 8.73bn previously. The Euro (EUR) the EUR/USD was under pressure Asia breaking below 1.3000 and then falling to 1.2960 as French and Greece elections over the weekend created fresh risks to the Eurozone. The new French President has stated he wants to focus on growth and not austerity going forward. The Greece elections resulted in anti EU politicians gaining favor with their platform of anti-bailout and austerity measures. The Sterling (GBP) the ...

Despite some interesting news out of China and better than expected trade balance data from Japan, investors in Asia appear unwilling to make any big moves given how focused the market is on Europe. Accordingly, FX price action was fairly range bound as investors wait for the results of Spanish and French debt sales. In Japan, its merchandise trade balance printed better than expected at -JPY82.6bn (exp. –JPY223.2bn). The market had been expecting exports to increase by around 0.2%y/y but a significant increase in shipments to the US contributed to overall 5.9%y/y rise in exports. Nonetheless, this was offset by a 10.5%y/y increase in imports. Overall, the data is not stunning but shows that the export sector is healing, albeit slowly. A lot of the news out of Tokyo lately has been ...

The Week Ahead Highlights Searching for the next crisis? What's driving the dollar? Europe: what happened to the LTRO? Searching for the next crisis A couple of weeks ago the market was able to shrug off the prospect of a Greek default and a sharply rising oil price. Even weak Chinese economic data didn't de-rail risky assets. However, that optimism didn't last long and last week investors removed the rose-tinted spectacles and started to worry once more about the outlook for the global economy. Last month China's growth rate was downgraded to 7.5% per year from 8%. Since China has a history of out-performing expectations this downgrade had little market impact. However, a fifth straight decline for the HSBC/ Markit manufacturing PMI survey reading and the markets are ...

Fundamental Analysis EUR The approval of Greece's rescue package has provided European officials with time to persuade investors they are able to implement both fiscal discipline and growth. Italian and Spain borrowing costs fell on the Greek agreement. Yields for 10-year Spanish notes declined to 5.08% compared to 6.7% in November while Italian 10-year borrowing costs diminished below 5.4% compared to 7.1% in December. USD Sales of previously owned U.S. houses rose in January to the highest level since May 2010, adding to signs the housing market is regaining its footing. Purchases climbed 4.3 percent to a 4.57 million annual rate, less than forecast, from a revised 4.38 million pace in December that was slower than previously estimated, a report from National Association of Realtors ...

Fundamental Analysis EUR "The merger between Deutsche Boerse and NYSE Euronext would have led to a near-monopoly in European financial derivatives worldwide" - Joaquin Almunia, competition commissioner The European Commission has blocked a 9 billion dollar merger between Deutsche Börse and NYSE Euronext stock exchanges, saying that it would have stifled competition and created a monopoly in derivatives trading. USD "The job market continues to grow at a moderate pace" - Jonathan Basile, senior economist at Credit Suisse in New York The number of Americans who have found a job in the private sector in January declined to 170 thousand from a revised 292 thousand the prior month, the ADP Employer Services said on Wednesday. GBP "The UK manufacturing sector has sprung to life in the first ...

Forex News and Events: The first trading day in the year of the Dragon was unremarkable. With much of Asia closed fo the holidays trading was subdued. FX market positioning seems to indicate that traders are bracing for a significant pullback in risk appetite. The catalyst looks to be the disappointment created by the Greek debt swap plan. Whatever the outcome, it's bound to come up short. In the short term, we suspect that participation will fall below the critical 90 percent threshold and kick off a credit event. In the longer term, the default will fail to put Greece on a path toward economic health as originally believed. Most likely the Greek solution will demand additional defaults. At the end of last week, the market began to price in this uncertainty. US equities had a soft ...