As Greece Buys

The Week Ahead Highlights Europe steps closer to the cliff edge Can the USD extend its rally? Bank of Japan may extend maturity of its bond buys Pricing in more QE from the Bank of England Europe steps closer to the cliff edge It was a pivotal week for the Eurozone after Greece announced that it was heading back to the polls after the top three parities failed to form a coalition government. So now Greece is leaderless, there is a caretaker government in place but it won't be able to enforce the austerity required to get the next tranche of bailout funds necessary for Greece to avoid running out of money in July. So as time runs out for Greece the European authorities have been clear: the upcoming election is a referendum on euro-membership. Either vote for pro bailout ...

USD is Preferred Haven USD remains firm ahead of today's FOMC minutes and amid ongoing EU concerns. UK PM Cameron put the situation in the euro area rather succinctly saying that "it either has to make up or face a potential breakup". The dollar index is continuing its ascent towards mid-January highs after breaking a medium term bear channel. Economic data due out shortly incldes April housing starts which are forecast to gain by 4.7% m/m, building permits which are anticipated to fall by -4.5% m/m, and industrial production which is expected to show growth of 0.6%. The minutes from the April 24-25 FOMC meeting will be released at 1400ET and will provide insight into the whether or not the Fed discussed additional measures. EUR is nearing the 2012 lows against the USD as the euro ...

Fundamental Analysis EUR " show that despite the crisis in the euro area, Germany is growing and benefiting from a revival in international trade." - Klaus Baader, senior economist at Societe Generale SA German factory orders rose by more than forecast in March, a sign Europe’s largest economy is weathering the debt crisis. USD "From where we sit right now, we think the economy looks fundamentally stronger." - Marisa Di Natale, an economist at Moody’s Analytics in West Chester U.S. stocks closed mixed on Monday after Francois Hollande was elected as a French president and Greek voters turned to antibailout parties. GBP "… the challenging economic backdrop suggests that a significant acceleration in prices or activity is unlikely in the near term." - Robert Gardner, Nationwide’s ...

Fears about Spain's high debt level pushed the euro down broadly on Thursday to its lowest level against the dollar in three weeks and prompting the Swiss National Bank to take action to curb the franc's strength. The euro fell for a fourth straight day against the greenback as a jump in Spain's borrowing costs made investors nervous about the country's ability to meet budget targets that could mark another escalation of the euro-zone debt crisis. With the euro zone engulfed in a debt crisis, the European Central Bank's policy should remain accommodative, with dovish comments by ECB president Draghi on Wednesday affirming that notion. That contrasts with the U.S. Federal Reserve, which this week downplayed expectations of adding more stimulus. As the U.S. economy improves, U.S. short ...

Fundamental Analysis EUR Greece has to agree with private bondholders on the debt swap deal until 20:00 GMT on Thursday otherwise the country will fail to fulfill its financial obligations and may leave the Euro Zone. Greece has to agree on the 53.5% reduction in the current debt with not less than 75% of the private investors. Moreover, creditors were asked to lower the interest rate to enable the country to extend repaying period. On Wednesday about 40% of the Greek debt holders opted for the deal, reported the Ministry of Finance. USD US markets recovered on Wednesday trade after data showed the number of payrolls climbed and investors anticipated news about possible new type of Fed's quantitative easing. S&P 500 index gained 0.69% or 9.27 points and finished at 1,352.63 with ...

Fundamental News: Today’s highlights: Core Retail Sales (MoM) (CAD, 13:30 GMT) Eurozone Finance Ministers have approved a second bailout package for Greece, reports said citing statements by EU officials. The bailout program involved financing worth EUR 130 billion. Meanwhile, Reuters said that the meeting agreed on a debt reduction target of 121 percent of GDP for the country by 2020. The new bailout money would leave Athens with sufficient funds to repay a EUR14.5 billion bond due on March 20. The European Central Bank on Monday said that it made no purchase of Eurozone government bonds last week, halting the emergency debt buying program for the first time since August. The program, under which the central bank buys bonds from other investors in the secondary market, was launched ...

(Reuters) - Spot gold briefly rose above a resistance level of $1,750 an ounce on Wednesday, as investors waited for Greece to grind towards a deal on a rescue package that it urgently needs after missing a string of deadlines. Athens tested investor's patience yet again on Tuesday by postponing a decision on whether to accept austerity and reform measures in exchange for a 130 billion euro ($172 billion) bailout from the IMF and EU. Gold could face a short-term pullback if Greece strikes a deal, as it may hurt the appeal of safe-haven assets, but in the long run the lingering euro zone debt crisis is expected to support sentiment in gold. "If Greece were to agree on everything right away, I don't think it would solve everything because they will still have to implement the measures," ...

The Week Ahead Highlights Better data drives risk on, Fed QE3 off Still waiting on a Greek debt deal Central banks' decisions on tap Better data drives risk on, Fed QE3 off The past week ended with a string of better-than-expected data releases from key major economies, suggesting the global recovery may avoid a more worrisome downturn. Mostly better than expected PMI's from Europe, UK, China and the US were supplemented on Friday by a much stronger US employment report than was expected. We're cautiously optimistic that the better US jobs report is a valid signal that the US recovery is improving, but we're also aware that January employment numbers are especially volatile due to seasonal factors, and subject to major revision. The decline in the unemployment rate in the ...

Investors are needlessly exposing themselves to huge potential losses by defying two golden rules for making money through bonds - lend more to those who will pay on time in full and less to those already saturated in debt. Traditional fixed income benchmarks that allocate investment weight based on the volume of a country's debts have nurtured what some see as a dangerous conviction that sovereign borrowers who owe the most are the safest to lend to. In a clarion call to investors the same week that Italy -- Europe's largest bond issuer -- passed a crucial test of its ability to borrow, Gregor MacIntosh, Lombard Odier Investment Managers' head of rates, said those who slavishly model portfolios on issuance rather than fundamentals were most at risk. "We're trying to embody a more ...