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Above The Long RunTitle:
Global shares slide amid fears for Spanish banks, growth
Asian shares tumbled on Friday and were set for their worst weekly showing since September, amid political turmoil in Greece and signs of growing instability in Spanish banks, with investors adding the latest weak U.S. data to the list of risk factors.
Assets across the board, from commodities such as oil and gold to riskier currencies such as the euro and the Australian dollar were all heading for their weekly losses.
Financial stocks were hammered after the head of Australia and New Zealand Banking Group (ANZ.AX) said volatile conditions in global markets have caused the wholesale funding market for Australian banks to freeze again, a worrying echo of the global financial crisis.
European shares were also set to fall, with financial spreadbetters predicting that major European markets ...
Title:
Consolidation Continues Post The Spanish Bond Auction
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 ...
Title:
Central Banks' to the Rescue?
Central Banks' to the Rescue?
The Bank of England stole the headlines this morning as it delivered its second Inflation Report of the year. Its message was fairly grim: the UK won't regain its 2007 level of output until 2018. The biggest threat to the UK economy right now according to the bank is the impasse in the Eurozone (something the BOE can't control).
The BOE: "blame the Royal Family and the Eurozone"
However, the one thing it can control is QE and interest rates, and it kept the door to more QE firmly open today. It noted that Q1 GDP figures could be revised higher, however a number of "one off" factors like the Queen's Jubilee bank holiday this year could knock 0.5% from GDP. This "holiday" could have a more damaging economic effect than the Royal Wedding, according to the Bank. ...
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Gold hits 4-1/2 month low, Greece heads for elections
Gold slipped to a fresh 4-1/2 month low on Tuesday as the euro continued to lose ground to the dollar after Greece's failure to form a coalition government heightened concerns over Europe's financial crisis and led investors to spurn risky assets.
After six rounds of fruitless wrangling, Greece abandoned efforts to form a government and called a new election that some investors fear may hand victory to the leftists, undo the country's financial bailout package, and push it closer to bankruptcy and out of the euro zone.
In response, gold slipped with the euro, which tumbled to new four-month lows in late New York trade. The euro had fallen in five of the last six sessions on worries over Greece's June election prospects, dragging gold down with it.
Title:
Euro slumps to fresh 4-month low; Greece weighs
The euro slid to a fresh four-month low against the dollar on Tuesday after a spokesman for the Greek president said the country will hold new elections after political leaders failed to reach agreement on a coalition government.
In a sign of a swift rise in risk aversion, German government bonds rose sharply and Italian 10-year yields hit 6 percent on the news.
The dollar, bolstered by safe-haven flows, also gained against the yen as investors compared U.S. data releases to those from elsewhere in the world and saw the world's largest economy on track to recovery, albeit at a slow pace.
The Greek news "triggered the (euro's) fall through $1.2800 and it looks like they can't compromise so they will have to hold elections," said Boris Schlossberg, director of FX Research at GFT in Jersey ...
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Oil dips below $112, Chinese data weighs
Oil fell below $112 a barrel on Friday after a weak reading of industrial growth in China sparked worries about demand growth from the world's number two oil consumer.
China's industrial production in April grew at its slowest pace in nearly three years, which along with poor trade numbers on Thursday, suggest the world's No. 2 economy continues to slow down after a weak first-quarter performance.
Markets were also rattled by an unexpected $2 billion trading loss at Wall Street giant JP Morgan (JPM.N), which pushed jittery investors away from risky assets.
"The news out of JP Morgan last night started global markets on the weak side while Chinese numbers were not that good," said Olivier Jakob from Zug-headquartered Petromatrix.
By 07.20 a.m. EDT, Brent June futures lost 88 cents to $ ...
Title:
Brent falls below $112 on weak China data
(Reuters) - Brent crude futures dropped more than $1 a barrel on Friday as weak industrial production data in China reinforced concerns about the global economy as worries about the euro zone intensify due to the political turmoil in debt-laden Greece.
China's industrial production in April grew at its slowest pace in nearly three years, which along with poor trade numbers on Thursday, suggest the world's No. 2 economy continues to slow down after a weak first-quarter performance.
That made investors, who were already edgy with Greece struggling to form a coalition government that is crucial to a bailout-funded recovery, shun risky assets.
"Sentiment is very weak because of the overall economic situation. There is uncertainty over Greece, uncertainty over France," said Ken Hasegawa, a ...
Title:
Dukascopy Morning Forex Overview : 11/05/2012
Fundamental Analysis
EUR
"The overall manufacturing trend remains weak."
- Pierre-Olivier Beffy, chief economist at Exane BNP Paribas
French industrial production fell in March, said the national statistics office Insee on Thursday. Output contracted 0.9 per cent from February, when it gained 0.2 per cent.
USD
"It’s hard to get nervous that imports are rising."
- Dean Maki, chief U.S. economist at Barclays Capital Inc.
The number of Americans claiming for unemployment benefits fell to 367,000 in the week ended May 5 from 368,000 the week before, said the Department of Labor on Thursday.
GBP
"Our forecast is that they are done with QE, but you can’t rule out more later this year."
- Ross Walker, an economist at Royal Bank of Scotland Group Plc
The Bank of England kept rates on hold ...
Title:
Oil eases to around $113 on weak Chinese data
(Reuters) - Oil fell to around $113 per barrel on Thursday as weaker-than-expected Chinese trade data highlighted concerns over energy demand in the world's second-largest oil consumer.
Downbeat comments by the Organization of the Petroleum Exporting Countries also weighed on the market. The group's monthly report said oil supply was plentiful and in excess of market requirements.
Brent crude oil futures for June lost 10 cents to $113.10 a barrel by 07.06 a.m. EDT after settling at $113.20 on Wednesday, up 47 cents. U.S. crude fell 40 cents to $96.41 per barrel.
Brent has fallen sharply from highs of around $126 per barrel in April due to worries about political turmoil in Europe and a growing conviction that the market is well supplied.
Analysts remained downbeat about prospects for ...
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