Against Dominated A Quiet

The Weekly Bottom Line HIGHLIGHTS OF THE WEEK United States - Europe provided plenty of negative headlines this week. Both Spain and the U.K. confirmed their economies fell back in recession, while the former saw its unemployment rate jump to 24.4%. - The Dutch government collapsed over a dispute regarding fiscal tightening measures and S&P downgraded Spain's sovereign rating by two notches to BBB+. - Although unspectacular, things were better in the U.S. First quarter GDP growth came softer than expected. However moderate, a 2.2% q/q annualized economic expansion feels comforting against the European backdrop. Canada - Retail trade slid by 0.2% in February as auto sales declined following strong January results. - Newfoundland and Labrador brought down its budget, ...

(Reuters) - U.S. President Barack Obama's bid to dampen the influence of oil speculators by having regulators set trading margins could backfire, potentially making prices even more volatile and leaving crude dominated only by those with the deepest pockets. Under Obama's request to Congress, the Commodity Futures Trading Commission (CFTC) would determine how much speculators need to pay to trade U.S. crude oil futures, in theory increasing the amount when prices move too far, too fast. But economists and traders cautioned that pushing smaller investors out of markets would only hand greater influence to the largest hedge funds and Wall Street banks. Ultimately, there may not be enough traders left to do business with oil producers and consumers looking to hedge their needs. "Reduced ...

Forex News and Events: Asian session was subdued with G10 flows unexceptional. EURUSD bounced around 1.2752 to 1.2807 while AUDUSD made a steady climb to 1.0413 (short of 200d ma) before dropping sharply. Traders will focus on Greek PSI issue as talks are expected to resume today. China headlines once against dominated a quiet session a china official stated support of smaller banks in targeting RRR for Guizhou banks. However, Guizhou is not an industrial center and effect will have limited consequence. Overall, FX market seems to have embraced the feel good story of the week, rewarding it with a strong risk rally. Chinese growth, which came in better than expected, but still at a low, combined with German data sent stocks and correlated risky assets soaring. But in our mind this is ...

(Reuters) - "The Old Lady just bought half a yard of cable and there are plenty of bids for Bill and Ben." Confused? To most foreign exchange traders in London's "City" financial district that sentence would make perfect sense: "The Bank of England just bought half a billion U.S. dollars worth of British pounds against the dollar and there's interest to buy the Japanese yen." A mixture of Cockney rhyming slang, market banter and expressions picked up from horse racing bookmakers makes up the basis for a financial lingua franca that may sound like nonsense to most people, but has dominated the $4 trillion a day foreign exchange (FX) market for decades up until recently. Most often used for currencies, countries and numbers, this financial market mumbo jumbo is starting to die out on the ...

FUNDAMENTAL OUTLOOK at 0800 GMT (EDT +0400) USD Headlines this week are expected to be dominated by further news on debt woes, with theUS’ problems adding to the mix. Barring a last-minute breakthrough, we believe it would be hard for the Congressional ‘super committee’ to come up with structural cuts to eat into theUSfiscal deficit, thus beginning the process of painful sequesters, as mandated by legislation. Although there will be plenty of headlines generated, we doubt that the process will be as traumatic as the debt ceiling debate this summer, though given the scale of the cuts on hand, investors will worry whether the US’ growth trajectory would be affected, especially in light of external conditions. In the Eurozone,Spain’s Popular Party won a sweeping electoral victory but prime ...

The Week Ahead Highlights * Risk appetite stays resilient * Rate expectations driving the euro amid a deteriorating periphery * Storm clouds gather on the UK's economic horizon * Is AUD strength here to stay? * Key data and events to watch next week Risk appetite stays resilient Despite the global tumult from Japan, Libya, Portugal and elsewhere, investors seem to be embracing risk on the basis that the global recovery is on-going, as we suggested in last week's update. The S&P 500 stock index in the US has regained about ¾ of the decline since Feb. while the Nikkei 225 in Japan has recouped just over half its post-tsunami collapse. The CRB commodities index has also regained about ¾ of recent declines. And the drop in US Treasury yields has now reversed sharply ...

The Japanese crisis continues to dominate the news stories, as 4 of the 6 reactors at the Fukushima power plant remain unstable. Radiation level increases have been reported as far south as Tokyo, but Japanese officials say the levels outside the nuclear facility are not dangerous. The unstable conditions at the Japanese nuclear plant, combined with more violence in the Middle East increased volatility in the markets. Currencies, metals, and most commodities had an incredibly volatile day with many investors shifting back into the “safe haven” of US treasuries. The price movement of gold and silver caught me by surprise, as we have long viewed the precious metals as an “uncertainty hedge.” As I hit the send button yesterday morning, gold was still holding above $1400, but by the time I ...

(Reuters) - Canada's dollar hit its highest in more than 30 months on Friday, boosted by rallying commodities, to close out the year above parity with the U.S. currency on scant New Year's Eve trading volumes. The Canadian dollar reached as high as C$0.9925 to the U.S. dollar, or $1.0076, a peak last touched in May 2008, after briefly poking through a technical support level. Analysts noted the move to break C$0.9931 to the U.S. dollar came under very thin trading conditions on the last day of a year that included the Bank of Canada's first rate hikes following the financial crisis, euro zone debt troubles, rising commodity prices, and the U.S. Federal Reserve's stimulus plans. The gains were also made as the U.S. dollar fell broadly as investors closed their books on 2010. The ...

Weekly Focus: Moving Closer to QEII Market Movers ahead * We expect the US ISM to decline to 54.5 after the surprise increase in August. * In Euroland, PIIGS will probably remain on the radar screen. On the data front, focus will be on inflation. * In Asia, the release of China's two manufacturing PMIs and Japan's Tankan will be in focus. We expect a confirmation that the Chinese economy is currently bottoming out and a gain in the Tankan index for Japan's large manufacturers. * A lot of data out of Sweden including retail sales, PMIs and the NIER surveys. * In Norway particularly credit growth and retail sales should attract attention. Global Update * The FOMC statement struck a more dovish tone than expected. We now see a new round of quantitative easing as ...