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Global Markets Weekahead: Euro zone policy action becoming critical
The now familiar European cycle of crisis followed by political action, temporary respite, then another crisis enters that crucial second stage next week when leaders of the 27-member European Union seek solutions in Brussels.
Investors will also be concerned with how hard the crisis is hitting the euro economy, with flash estimates of business activity due from the latest purchasing managers' surveys, and with the view from Bank of Japan policymakers meeting in Tokyo.
The potential for a Greek euro exit and the deteriorating health of the Spanish banking system have fueled a growing sense among investors that the crisis in the 17-member currency bloc is nearing new heights.
"This whole European situation has been managed via crisis," said Didier Saint-Georges, a member of the ...
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Vale sees iron ore price rising in second half of 2012
Brazilian mining company Vale SA (VALE5.SA) remains confident the price of iron-ore, its main product, will rise in the second half of 2012, relieving environmental and economic pressures on the company which have hurt growth and delayed new projects.
Iron ore .IO62-CNI=SI fell to its lowest level in nearly six months on Friday, slipping 1.7 percent to $131.30 a metric ton (1.1023 tons). The medium- to long-term price, though, should be in the range of $120 to $180 a metric ton, Jose Carlos Martins, Vale's head of ferrous metals and strategy, said at a lunchtime gathering with reporters in Rio de Janeiro.
Demand for steel remains strong in China, thanks to housing, Vale Chief Financial Officer Tito Martins added. At the same time, declines in prices push higher-cost Chinese producers out ...
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Euro rallies from 4-month low versus dollar
The euro rallied from a four-month low against the dollar on Friday as investors pared bets against the single currency after a more than 3 percent drop this month, but concerns about Greece and Spain were likely to keep it under pressure.
Positioning ahead of the weekend meeting of the Group of 8 major industrialized nations and technical support also helped, traders said, as the euro approached its January low of $1.2623. Gains accelerated after a wave of stops were triggered in the euro's grind higher.
Despite Friday's rebound, investors preferred the relative safety of the U.S. dollar and the Japanese yen as worries about Europe persisted after Moody's cut the credit ratings of 16 Spanish banks late on Thursday.
Some traders said investors were wary of placing bets ahead of the ...
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Analysis: In India, muddled leadership leaves economy adrift
"Dear God," wrote economist Rajeev Malik as he called on the Almighty to help India's "rudderless" government in a biting critique that underscored a growing frustration at home and abroad with the stewardship of Asia's third-largest economy.
Writing in India's Business Standard newspaper, the well-respected Malik echoed the exasperation of Indian and foreign business groups pressing for the government to swiftly implement major economic reforms and formulate a coherent strategy to deal with its mounting problems.
Another newspaper said India could be heading to a Greek-style crisis.
Prime Minister Manmohan Singh's Congress Party blames unreliable allies in his coalition government for blocking major reforms aimed at opening up the economy to much-needed foreign investment and tackling ...
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Dukascopy Afternoon Forex Overview : 05/18/2012
Dukascopy Fundamental Analysis
EUR
Moody's reduced credit rating of 16 Span's banks, citing a rise in bad debts in the country's financial sector and overall deterioration of the economic environment. The decision came after shares of Bankia lost another 14%. The largest banks such as Banco Santander and BBVA were downgraded while ten out of 17 banks were put on negative watch, implying that further credit rating cuts are possible.
USD
As the U.S. dollar gets stronger, investors are concerned that aggravating debt crisis in Europe will reduce demand for oil. Therefore, oil shows decline for a third week. Crude oil lost 25 cents yesterday and reached the 6-month low of $92.56. Brent oil for July delivery slid 0.5 percent to finish at $106.99.
GBP
Following a downgrade of 16 Spanish banks, ...
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Gold rises 1 percent, eyes weekly gain, as euro recovers
Gold prices rose more than 1 percent on Friday, building on the previous session's hefty gains, as a recovery in the euro prompted some buying of the precious metal, with shorts covering amid expectations prices could rise further.
Gold posted its biggest one-day gain since January 25 on Thursday, recovering some ground lost during its longest run of losses in five months. Its reversal has put it on track to end the week 0.4 percent higher.
Spot gold was up 1 percent at $1,589.16 an ounce at 1148 GMT, having earlier touched a high of $1,594.10, while U.S. gold futures for June delivery were up $14.40 an ounce at $1,589.30.
The euro recovered from a four-month lows against the dollar to move into positive territory, taking some pressure off gold, though concerns over a Greek euro exit ...
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Signs that Bearish Sentiment May be Wearing a Bit Thin
Signs that Bearish Sentiment May be Wearing a Bit Thin
The Facebook IPO today has temporarily knocked Europe from the headlines as the world's eyes are focused on the Nasdaq at 1430 GMT/ 0930 ET when Facebook will start trading for the first time. CNBC anchors have been wearing honorary hoodies to mark the occasion so it must be big. I still find it hard to reconcile how FB is worth $140 billion when the site is used by both advertisers and cyber bullies, but perhaps I'm missing the point. The point today is that it is the third largest IPO in the US ever, Zuckerberg will be a gaszillionaire and U2's Bono is likely to earn $1.5bn from his initial $90 million investment. Facebook might not change the trading world, but it could change the Forbes rich list quite dramatically.
Could ...
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Oil hits 2012 low under $107 on euro zone turmoil
Oil prices slipped below $107 a barrel on Friday and hit a 2012 low as investors fought shy of riskier, growth-oriented assets on fears that Greece would leave the euro, and after a downgrade of 16 Spanish banks by Moody's added to the contagion gloom.
Brent crude was down 51 cents to $106.98 a barrel by 1122 GMT after earlier slipping to its lowest level for the year at $106.40. U.S. crude was up 16 cents to $92.72.
"The driving factor is still what is going on in Europe with the downgrades of the Spanish banks and very negative sentiment towards risk investments," said Eugen Weinberg, an analyst at Commerzbank in Frankfurt. "It's not surprising to see further falls in Brent today."
The euro fell to fresh four-month lows as the dollar strengthened .DXY, putting commodities priced in ...
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Euro zone fears propel dollar, global shares in red for year
The U.S. dollar climbed, world shares fell and German borrowing costs hit record lows on Friday as a deepening Spanish banking crisis, uncertainty about Greece's future in the euro zone and lackluster U.S. data provoked a rush for safe-haven assets.
World stocks, as measured by the MSCI index, .MIWD00000PUS dropped 0.85 percent and are now below where they began the year, having relinquished all their first quarter gains which were fuelled by the European Central Bank's creation of more than a trillion euros of three-year money.
That rally is now a distant memory as an ugly week for stock markets looked likely to end even uglier.
Across the board, riskier assets from commodities such as gold and oil and currencies like the euro and the Australian dollar were all heading for big weekly ...
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