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Although The Market Is Still QuiteTitle:
Greek Chaos Continues But Solution Ultimately Found
- While waiting for the Greek election on 17 June we are likely to see continued high uncertainty and continued high stress in the markets. Things are likely to get worse before they get better.
- Amid this uncertainty, Greek citizens are likely to withdraw more money from their banks and this could escalate into a real bank run.
- A major game of chicken has started between the EU on the one hand and Greek politicians on the other.
- The EU is likely to stand firm on its demands for Greece to deliver austerity and give only a few concessions. The rethoric from the left coalition party Syriza is likely to continue to be fiercely against the EU as it is aiming to become the biggest party and get 50 bonus mandates for this.
- We look at three different post-election scenarios. ...
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:
Euro Sell-Off Accelerates As Greece Will Hold Now Elections
Sunrise Market Commentary
- Fixed Income: Fresh elections in Greece further support core bonds
- German bund came off the contract highs at the start of the session on better German Q1 GDP data. The move didn't last long however and the announcement of fresh Greek elections marked an intraday U-turn. This morning, the German Bund future and US Note future once again reach new contract highs.
- Currencies: euro sell-off accelerates as Greece will hold now elections.
- On Tuesday morning it looked temporary that the euro might enjoy some breathing space as the German Q1 growth was much stronger than expected. However, the rebound had no momentum at all. The euro was again hammered as talks on the formation of the Greek government collapsed. Is the euro heading for a free fall? ...
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Gloom builds for euro zone, United States
(Reuters) - The euro zone economy worsened markedly last month and U.S. employers cut back on hiring, according to two reports on Friday that dampened hopes for gradual recovery on either side of the Atlantic.
In Europe, the purchasing managers indexes (PMIs), which primarily cover services, suggested a recession across the continent's currency union could now extend to mid-year and be deeper than previously thought.
The gloomy surveys clashed with the picture painted by European Central Bank President Mario Draghi, who on Thursday spoke of a gradual recovery taking place in the euro zone during the course of the year - although he did speak about risks.
In the United States, a government report showed employers added a disappointing 115,000 workers to payrolls last month and, ...
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Private-sector hiring slows in April, stirs concern
(Reuters) - U.S. companies hired the fewest people in seven months in April, a worrisome sign for a labor market that has struggled to gain traction and adding to concerns that the economy has lost some momentum.
The ADP National Employment Report on Wednesday showed the private sector added 119,000 jobs last month, below economists' expectations for a gain of 177,000 jobs. The March figure was also revised lower.
The report comes two days before the government's broader and much-watched monthly jobs report.
"This is an upsetting report," said David Carter, chief investment officer at Lenox Advisors in New York.
"The strength of the U.S. economic rebound is clearly still uncertain. Hopefully we don't get a third consecutive summer of weaker growth."
Recent data, including softer labor ...
Title:
The Weekly Bottom Line : 27/04/2012
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, ...
Title:
Fed Doesn't Help The Dollar
Sunrise Market Commentary
- Fixed Income: Small changes after volatile trading
- Core bonds traded volatile due to economic data and bond auctions. The Fed had the final saying. The FOMC statement showed that the Fed was slightly more optimistic on growth and the governors more hawkish in their rate forecasts. However, policy remains unchanged and Bernanke kept the door for more QE open.
- Currencies: Fed doesn't help the dollar
- On Wednesday, trading in most major currency cross rates was confined to recent ranges. EUR/USD is holding near the recent highs. The Fed kept a soft tone and this was a slightly negative for the dollar. Sterling lost temporary ground as Q1 GDP data showed that the UK has slipped back into recession. However, the EUR/GBP 0.8222 resistance did its job. ...
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Oil firmer on Fed QE speculation
(Reuters) - Brent crude oil gained on Wednesday, with investors expecting that the U.S. Federal Reserve may give hints of more monetary easing, supporting demand sensitive assets.
"The big focus remains on the U.S. Federal bank meeting today," says Oliver Jakob of consultancy Petromatrix.
Brent crude rose 71 cents to $118.87 a barrel by 7:00 a.m. EDT (1100 GMT), while U.S. crude was up 56 cents at $104.11.
A third round of monetary stimulus or quantitative easing, also called QE3, should boost liquidity in markets and lift appetite for riskier assets such as oil.
"If there are hints at more quantitative easing, oil prices will shoot up again, as they are well off their highs," Michael Hewson, analyst at CMC Markets.
However, he said investors may be disappointed as he thought ...
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METALS-Copper dips 2 percent on European data, political worry
Copper started the week on shaky ground on Monday, falling nearly 2 percent in decent volume after an unexpected drop in European service-sector activity dampened hopes the region will soon emerge from its economic slump.
With the broader markets focused on Europe's grimmer outlook, copper prices failed to find any support from Chinese data that showed factories in the world's No. 2 economy logged their best performance this year.
Instead, copper sank in a broad-based retreat from riskier assets as political uncertainties in France and the Netherlands added to growing fears that the euro zone's fiscal troubles could spread to countries once perceived to be safe from the crisis.
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