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Analysts Warned That The EuroTitle:
Gold ekes out gain but technical selling weighs
Gold managed to end with a small gain in light volume on Monday, as technical selling and a fizzled euro rally offset bullion's initial gains after Greece's parliament passed austerity measures needed to secure an international bailout package.
Gold, euro and U.S. equities broadly rose in early sessions hopes the Greek deal on strict financial reforms would be enough to secure critical funds to avert a default that could spread to other euro zone economies.
The metal's rally began to fade when it failed to rise above the previous session's high above $1,730 an ounce. Last week, gold encountered heavy technical selling around $1,750 an ounce, the highs set in early December.
"Gold is currently testing its upward trendline. Until it rises above the middle of its bullish double-bottom ...
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Greek News Likely to Impact Markets This Week
The euro took a strongly bearish turn to close out last week, after hitting a two month high against the dollar on Thursday. The downward correction was largely attributed to fresh concerns that Greece may not get a sorely needed bailout it needs to avoid defaulting on its debt. Greek news is once again likely to dominate market sentiment this week. Traders will want to pay particular attention to a meeting on Wednesday of euro-zone finance ministers. Any announcements regarding Greece following the meeting could lead to major market volatility.
Economic News
USD - Risk Aversion Leads to a Bullish Dollar
The US dollar saw gains virtually across the board to close out last week, following negative euro-zone news that caused investors to shift their funds to safe-haven assets like the ...
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Euro hits two-month high versus dollar on Greek deal
(Reuters) - The euro hit a two-month high against the dollar on Thursday as Greek leaders clinched a deal on reforms needed to avoid a disorderly default and Europe's central bank chief flagged tentative improvement in the euro zone economy.
The currency rose as high as $1.3321 and was last changing hands at $1.3294, up about 0.3 percent.
"That poured a little cold water on expectations of a March rate cut," said Adnan Akant, head of foreign exchange at Fischer Francis Trees & Watts, with $48 billion in assets.
With Greece set to receive a 130 billion euro ($172 billion) aid package, traders said the euro may make a run at its early December high above $1.35, especially if investors start pricing out a euro zone interest rate cut in March.
The European Central Bank held rates at 1 ...
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Oil firms rally on Greek deal news
Oil futures gained on Thursday after a government source said Greek political leaders had clinched a deal on austerity and U.S. weekly jobless claims dipped, adding to support from Middle East tensions.
A deal on austerity measures means Athens will be able to secure bailout funds from the European Union and the International Monetary Fund that will help it stave off a chaotic default.
"This is just another reason for oil to continue with its rally. No material change to anything," said Standard Bank analyst James Zhang in London.
European Central Bank president Mario Draghi warned that while there are tentative signs of stabilization in the region's economy, the outlook is subject to high uncertainty and downside risks, including high commodity prices.
Front-month Brent futures were ...
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EUR trading firm as markets are more optimistic about Greece
FUNDAMENTAL OUTLOOK at 0800 GMT (EDT +0400)
USD
The euro is trading on a firm note as markets are somewhat more optimistic that several outstanding issues on Greece are close to resolution. Firstly, late into the session on Tuesday a Greek government spokesperson finally announced that political leaders would meet on Wednesday to respond to the bailout proposals by noon. It appears that a tentative deal has been secured with the troika, though some individual points on how the cuts are going to be achieved remain outstanding. More importantly, press reports suggest that the ECB is close to agreeing terms on participating in the Greek debt swap. The Wall Street Journal reported that the central bank will swap its holdings at purchase cost with the EFSF, so it won’t take a loose.
Crucially, ...
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EU Debt Crisis Continues to Fuel Risk Aversion
The euro-zone debt crisis continued to fuel risk aversion in the market place yesterday, as poor news briefly brought the EUR/USD pair below the 1.3100 level. The pair staged a recovery later in the European session, after it was revealed that Greek leaders had begun finalizing a debt swap deal. Today, traders will want to continue monitoring the euro-zone situation, especially as it is becoming clear that Portugal will soon need a bailout to avoid defaulting on its debt.
Economic News
USD - USD/JPY Continues to Make Gains
The US dollar extended its recent bullish run on the Japanese yen yesterday, with the pair reaching as high as 76.85 before staging a slight reversal. In addition to a positive US jobs report from last week, the pair's ascent was attributed to reports that the Bank ...
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Results of Spain’s auction on focus
FUNDAMENTAL OUTLOOK at 0800 GMT (EDT +0400)
USD
Risk assets consolidated yesterday’s gains overnight. The dollar failed to regain lost ground and Asian equities followed the S&P 500 higher. Respectable global manufacturing prints certainly helped, but the gradual easing of sovereign stresses inSpainandItalyprobably played the greater role. We keep our cautious stance however, noting that European austerity measures are mostly only in their early stages of implementation, so there is scope for further deterioration in economic data as the process of fiscal consolidation begins to bite in earnest. At present, growth forecasts remain relatively conservative, and there is still some upside risk to our expectations of a recession inEuropein particular.
However, pricing in early normalisation ...
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European shares rally to six-month high on economic data
European shares hit a six-month high on Wednesday as encouraging economic numbers boosted sentiment, while Italian banks gained after the Italian Central Bank made it easier for banks to boost their capital base.
The FTSEurofirst 300 index of top European shares .FTEU3 was up 1.9 percent at 1,057.08 points after climbing to its highest since early August.
Sentiment was boosted by data showing that the manufacturing sector in Germany, China and the United States were in better shape than expected but strategists warned not to read too much into the data for Europe.
"Keep in mind that we are only in the early stages of implementation of the austerity measures across Europe, so there is pain yet to come. As such, we would not be carried away by these numbers," said Duarte Caldas, market ...
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Oil gains on China data, Iran tension
Firm Chinese economic data and brewing tension between Iran and the West pushed oil above $112 a barrel on Wednesday, putting it on track for its highest close in three weeks.
Brent crude was up $1.39 at $112.37 by 1415 GMT, heading for its highest close since Jan 11. U.S. crude was up 53 cents at $99.01.
"The market is confined to a range between $110.50 and $112.50 basis for front month Brent but the cold weather in north west Europe and continuing tension over Iran makes it likely that any break will be to the upside," said Christopher Bellew at Jefferies Bache.
China's official Purchasing Managers' Index showed the manufacturing sector in the world's largest energy consumer expanded modestly in January, with the index reading inching up to 50.5 from 50.3 in December, above a ...
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