Action And Operational Issues

(Reuters) - Gold prices bounced back into positive territory on Tuesday, paring earlier losses in line with a rallying euro after a Greek official said the government is drafting an agreement on a second bailout. Spot gold was up 0.3 percent at $1,723.89 an ounce at 1502 GMT (10:02 a.m. EST), having earlier fallen as low as $1,709.29 an ounce, while U.S. gold futures for February delivery were up $1.70 at $1,726.60. A Greek government official said Greece's government is preparing the text of an agreement on a 130 billion euro bailout that will be put to political leaders for approval, suggesting Athens had largely wrapped up talks with lenders on the rescue. A conclusion to the discussions would likely to support gold, although it has struggled to maintain upward momentum as the ...

(Reuters) - Gold prices eased towards $1,710 an ounce on Tuesday in line with a softening euro as traders awaited a breakthrough on talks over a second bailout deal for Greece, with its leaders fighting to avoid a chaotic debt default. Spot gold eased 0.4 percent to $1,712.79 an ounce at 1210 GMT (7:10 a.m. EST), while U.S. gold futures for February delivery were down $10.20 at $1,714.70. While a retreat in stock markets and the euro kept gold under pressure on Tuesday, the precious metal still is up 10 percent so far this year after December's sharp drop, supported by a Federal Reserve pledge to maintain ultra-loose monetary policy. The euro eased 0.2 percent versus the dollar. For Greece, failure to secure the 130 billion euro ($170 billion) rescue would mean it faces a messy debt ...

Weekly Economic and Financial Commentary : 04/11/2011 U.S. Review Slow But Steady Progress Nonfarm employment rose by 80,000 jobs in October and data for the previous two months were revised up. The unemployment rate fell to 9.0 percent. October's ISM surveys remained consistent with modest economic growth. Both the manufacturing and non-manufacturing surveys ticked down marginally in October, but remain slightly above the key 50.0 break-even level. Motor vehicle sales turned in another solid performance in October, running at a 13.2 million unit annual rate. Sales of luxury vehicles were particularly strong. Another Small Step in the Right Direction Much has been written about the problems economies face in recovering in the aftermath of financial crisis. Research by the ...

(Reuters) - Bond investors see Federal Reserve action to boost the flagging U.S. economy as practically a done deal after Friday's dismal jobs report. Government data showing the economy failed to create new jobs last month heightened speculation the Fed will launch a program this month to pump money into the economy by pushing down long-term borrowing rates. The move, known to some in financial markets as Operation Twist, would probably involve the Fed selling shorter-dated Treasuries it holds its balance sheet and buying longer-dated bonds. The Treasury market appeared to price in greater chances of this after the jobs report, with 30-year long bonds surging 3 points in price. "Following today's worse-than-expected jobs report, we now look for the Federal Open Market Committee to ...

(Reuters) - If the impasse over the debt limit is not broken by early next week, President Barack Obama will be forced to make decisions about how he will manage the crisis. Treasury Secretary Timothy Geithner and a small team of his aides have been working on contingency plans should Congress fail to raise the U.S. borrowing limit by an August 2 deadline. The administration has said little in public about its plans and there is disagreement among private-sector experts on the feasibility of some of the options. A number of them are complicated and could provoke a political backlash. Even if the administration were to implement some of the options, the debt deadlock could still trigger turmoil in financial markets, sending the dollar lower and U.S. interest rates higher and putting the ...

(Reuters) - China is working quietly behind the scenes to tighten its control of the rapidly growing offshore yuan market, and risks turning off some investors from participating in the market and slowing use of the renminbi in global trade. Chinese regulators are making bankers uneasy by systematically shaping the structure of the so-called CNH market through derivatives regulation and financial bureaucracy, banking and regulatory sources said. China's offshore yuan market, originally meant to be an experiment to help internationalize the yuan, has grown at a dizzying pace, with investors hungry for exposure to the strengthening but still non-convertible currency. Beijing, which has made currency reforms in fits and starts, has been trying to ensure a CNH derivatives market follows the ...

EURUSD traded above 1.2700 but lacked the momentum to drive above the 1.2800 level. Part of the reason for the restrained market activity may be the EU Bank Stress test results expected to be released next Friday. While some say the release will be good for risk-correlated trades due to the high level of transparency – we believe this may only be the case if the anticipated cost of recapitalizing about-to-fail banks is manageable. We suspect that much of the optimism surrounding the report has already been priced in while the risk of a negative surprise is comparatively higher. Further, just because European officials have been able to take a single snapshot of the banking sector doesn’t means a bailout solution isn’t necessary nor that further erosion of banks’ balance sheets can be ...

Weekly Focus: Teflon Markets Ignore Softer Data Market Movers ahead * In the US the main event next week is the FOMC meeting. We expect very few changes in the statement. If anything the section on growth might be downgraded. * In Euroland we look for a small decline in both German Ifo and Euro flash PMI. * The main event in the UK will be the crisis budget due on 22 June. It certainly looks like the austerity measures will be very tough. * In Scandinavia Swedish confidence data and the meeting in Norges Bank will be in focus. We expect Norges Bank to keep rates unchanged. Global Update * The news flow has been mostly negative over the past week with softer macro data and continued tension in Euro bond markets. * However, risk markets have been covered with ...

The EURUSD continued to tumble as a unnamed source, said that German Chancellor Merkel stated there will be no decision on a bailout package for Greece by the end of the EU’s two day summit in Brussels. The EURUSD traded below the 1.3425 key support (low May 2008) down to 1.3406, while the GBPUSD traded down to 1.4957 (at the time of writing). The public rift between Germany and EU officials on the Greek situation seems to be increasing daily, dimming markets optimism and weighting heavily on the EUR. There are growing rumors of short term bets against the EUR ahead of what many feel (including us) will be a disappointing close to Brussels. However, there are still EU officials actively searching for a solution, including the President of the EU Council Von Rompuy who was reported trying ...