Action In The Increasingly Tense

(Reuters) - Oil traded down near $114 a barrel on Monday as traders and investors worried that a failure to agree a deal with Greece for a second bailout would suppress demand in the euro zone, but renewed tensions with Iran kept a floor under prices. Greek coalition parties have yet to sign off an austerity package that will secure a second financing package from the euro zone and the International Monetary Fund, raising fears of a disorderly default. Analysts said this was putting pressure on most risk assets. "If no lending tranches are given to Greece, it would mean bankruptcy in March," said Michael Poulsen, an oil analyst at Global Risk Management. Front-month Brent crude was down 61 cents to $113.97 a barrel by 1319 GMT, ending four straight days of gains. Brent rose 2.8 percent ...

(Reuters) - Oil slipped to around $114 a barrel on Monday as traders and investors worried that a failure to agree a deal with Greece for a second bailout would suppress demand in the euro zone, but renewed tensions with Iran kept a floor under prices. "There's still not much confidence over the euro zone economies, and that is limiting upside from strong U.S. data and the tensions in Iran," said Ken Hasegawa, a commodity derivatives manager with Newedge Brokerage in Tokyo. Front-month Brent crude was down 43 cents to $114.15 a barrel by 3:48 a.m. ET, ending four straight days of gains. Brent rose 2.8 percent last week to settle near a three-month peak on Friday, after a positive U.S. jobs report fuelled hopes of stronger demand in the world's biggest economy. U.S. crude was down 77 ...

Risk Appetite Set To Freeze The severe arctic winds have reminded much of Europe that winter still has some bite and, in a similar vein, risk appetite is likely to peak as a more sobering reality returns. A key issue is that governments will look to take advantage of any improvement in conditions to row back on reforms and austerity as they face an increasingly hostile electorate. Key banking-sector reforms are also likely to be delayed with underlying issues left unresolved and business confidence is liable to dip again as seasonal components become much less favourable. The dollar should be able to resist heavy selling even if a Greek solution can be found. Yet again, the Greek situation will have an important impact as the latest deadline for a deal approaches. Following daily ...

Economic Data Analysis A Man with Plan A, or a Man with a Plan? Autumn statement to count cost of weaker growth outlook on UK public finances. Euro area finance ministers meeting to progress governance and treaty changes. US payrolls and ISM indices to judge pace of Q4 expansion. The importance of the 'failed' German Bund auction this week may have been exaggerated - 9 have failed this year alone. However, the rise in Bund yields and fall in the euro raises fears that capital is now seeking safety outside of the Euro area and not across it. Merkel, Sarkozy and Monti's meeting this week stated that salvation is still sought through long-term fiscal integration and treaty change - the main focus for the 9 December Summit. As such, the coming week's finance ministers meeting ...

Economic Data Analysis : New Greece Born From Chaos? European events sparked high market volatility this week and kept uncertainty high. Euro area focus on finance ministers meeting, to seek to control contagion. MPC to leave policy unchanged. Industrial figures to reinforce recession risk. Light data from US but, along with China, news could show ex-Euro area downside risks fading. The political turmoil in Greece rocked markets this week, while Italy's political intrigue continues to simmer. Against this background the G20 meeting failed to find traction. However, international leaders are likely to have urged Euro area officials to focus on measures to staunch the contagion, recognising that control of events per se is not possible. The plans for bank recapitalisation ...

(Reuters) - The euro rose against the dollar for a third straight day on Tuesday, buoyed by hopes European policymakers are planning to boost a bailout fund, but gains could be fleeting given investors remain cautious. Talk of coordinated action to contain the euro zone debt crisis was accompanied by denials from policymakers that bailout cash would be increased. That frustrated investors eager for a lasting solution to the region's drama. German Finance Minister Wolfgang Schaeuble, for instance, said on Tuesday that raising the euro zone bailout fund is a "silly idea," and would mean some of the economies within the region could lose their AAA rating. When talk of leveraging the European Financial Stability Facility first became public last week credit rating agency Standard & Poor's ...

Weekly Economic and Financial Commentary U.S. Review Recession Fears Rise Again Today, markets received a gut-wrenching August payroll report, ratcheting up recession fears again. There were zero net nonfarm payroll jobs created in August with 58,000 fewer net jobs created during July and June. More troubling for people who still have jobs, average hourly earnings and weekly hours both contracted. Yet, the week started on a bright note, personal spending for July surprised on the upside, suggesting that economic growth was motoring ahead, when it was hit by the equity market declines and the shock to business and consumer confidence in August. Is the Glass Half Full or Half Empty? Fears of recession increased on Friday as the BLS reported that August nonfarm payrolls did not ...

(Reuters) - Stocks fell while the Swiss franc rose and gold hit a record high on Monday as hopes for a political deal to avert a U.S. default began to fade, though investors were mostly seeking to protect their portfolios with no signs of market panic. Indeed, though the benchmark 10-year U.S. Treasury yield rose four basis points to 3 percent, it was still down more than 30 basis points since the year began. Equity markets in Asia were down between 0.8 percent to 2.3 percent, and U.S. stock futures fell 1.1 percent. Investors have been whipsawed in the past few months by hope and disappointment over policymakers' ability to halt sovereign debt crises in the euro zone and the United States. After European leaders scraped together a second bailout for Greece last week, haggling in ...

(Reuters) - The battle among top banks for dominance of the $4 trillion a day FX market will be decided by their ability not only to offer rapid-fire pricing and razor- thin spreads, but also to adapt to tighter trading rules. In interviews with Reuters, big FX banks said players with deeper pockets would continue to maintain and develop technology for their electronic trading platforms in 2011, while smaller ones would struggle to keep pace with such massive investment. Consequently, smaller players may lose some market share gained through aggressive expansion in 2007-10, when the share of the top five banks slipped to 55 percent from 61 percent. "Those institutions which have tried to go from being niche players to top five players will probably see that their investments are not ...