As Mildly Encouraging

Gold prices rose on Tuesday, following gains in equities and industrial metals, but selling pressure capped gains ahead of a U.S. option expiration and on uncertainty over a U.S. Federal Reserve policy meeting. Bullion, which for most of this year has tracked riskier assets, climbed as U.S. equities rose after strong earnings from bellwether U.S. companies and a mildly encouraging U.S. home sales report. .N A rally in copper prices also lifted gold. Trading volume was below average for a third straight session, as investors waited for Fed policy makers to announce the outcome on Wednesday of their two-day meeting. Price volatility could spike ahead of Wednesday's May COMEX options expiry, as both call and put options investors look to profit from heavy bets at the $1,650 strike price. ...

Forex News and Events: There continues to be a struggle between the EU (specifically Germany) and the IMF in regards to the size of the international organization's contribution. IMF Managing Director Christine Lagarde said on Saturday that she plans to recommend 18bn in financial aid for the second aid package for Greece. This is lower than the IMFs contribution to the first aid package of 30bn. This means that the EU will have to come up with 112bn through the European Financial Stability Facility (EFSF) which has a lending capacity of 440bn. The announcement suggests that the IMF has now sunk around 48bn in to Greece. While the commitment needs to be approved by the IMF executive board, there is growing evidence that members are becoming increasingly nervous about the organizations ...

“America is back,” said the President of all the Americans, “Anyone who tells you America is in decline or that our influence has waned, doesn’t know what they’re talking about.” Well, Dear Reader, we’re here to tell you: America is in decline. We can give it to you straight because we’re not running for public office. And if we were elected, we would immediately demand a recount. Anyone who tells you America is not in decline is either running for office…or not paying attention. In 1969, more than one out of every three dollars of income in the entire globe was earned in the US. That’s what the IMF’s World Economic Outlook tells us. By 2000, that number had fallen…but not by much. The US still took home 31% of global income. But in the last 10 years, the US share has fallen hard — ...

Fundamental Analysis EUR "This is an encouraging development, suggesting that the Italian sovereign debt market has pulled back from the dangerous situation in late November" - Raj Badiani, a senior economist at IHS Global Insight Italy raised 9 billion euros in an auction on Wednesday, more than expected, benefiting from lower yields as Rome’s recent austerity measures and the ECB long-term refinancing operation have helped to ease strains in the market. USD "December started slowly and built as it got closer to Christmas" - Madison Riley, a retail strategist at consulting firm Kurt Salmon U.S. retail sales rose 4.5 per cent for the week ended December 24, compared to the same period last year as shops offered discounts to lure consumers, said the International Council of Shopping ...

Forex News and Events: The euro has managed to make some encouraging gains this morning on the back of comments from the EU’s Barosso promising coordinated action by member states to recapitalise banks. With many investors worried that a Greek default is becoming an increasingly possible scenario, panic has been fuelled by the assumption that such an event would have a catastrophic knock-on effect within the European financial system. Whilst a Greek default would still cause an appreciable shock to the markets if it were to take place, the efforts to limit a domino of bank collapses has come as a welcome development. As positive as the bank recapitalisation news is, investors are unlikely to get too carried away with optimism before we get through today’s headline event, the ECB rate ...

Forex News and Events: There has been little directional impetus in FX markets ahead of Fed Chairman Bernanke’s appearance at Jackson Hole, with most investors unwilling to buy the highs or sell at the lows before knowing exactly what is going to emerge from his speech. Looking at recent gold price action (which has seen the precious metal plunge more than 9.5% from Tuesday’s all time highs), we would infer there is a diminishing belief in the market that Bernanke will announce or hint at QE3. This hardly comes as a surprise; US headline CPI hit an uncomfortably high 3.6% YoY in July and further liquidity injections would surely send this figure spiralling higher. As such, the Fed would need a pretty strong argument for initiating QE3. Whilst growth, unemployment and housing data have ...

Forex News and Events: Risk appetite and EURUSD are staging an encouraging rally this morning, on the back of better than expected PMI data across Europe and solid equity performances in Asia. The Eurozone Composite PMI index came out at 51.1 in Aug (same level as Jul), against market expectations for a drop to 50.0. Looking at the component surveys, manufacturing fell less than expected to 49.7 (49.5 expected, 50.4 prior), while services posted a healthy 51.5 (50.9 expected, 51.6 prior). Elsewhere, currency movements are still posing tough challenges for Japan and Switzerland. Japanese Finance Minister Noda has continued to engage heavily in verbal intervention in a desperate bid to prevent another slump in USDJPY. Today he stated that coordinated intervention could not be ruled out ...

Forex News and Events: Last week saw board pressure on stock and bond yields but today it seems all is forgiven. The US debt ceiling issue took a positive turn, with leaders in both parties, in both the House and Senate and President Obama, theoretical approving an agreement. The tentative deal gave risk a bid tone and took EURUSD up to 1.4416 and USDCHF 0.7930. AUDUSD and NZDUSD were back up above 1.10 and 0.88 respectively, as regional indices traded higher across the board. Commodities were mixed with crude and industrial metals like copper rising to an intraday high of $454.00, while gold slipped sharply to $1607.45. The US agreement, if passed, will raise the debt ceiling by $2.1trn and cut the federal deficit by as much as $2.5trn over a decade, which will come from spending cuts ...

(Reuters) - World stocks rose for the third straight day and oil prices jumped on Wednesday after Greece's parliament approved the first of two austerity measures aimed at preventing the country from going bankrupt. Gold and other commodities rose on investors' appetite for riskier assets, while safe-havens lost some of their appeal as Greek Prime Minister George Papandreou won a key battle to ensure the disbursement of a 12 billion euro tranche from a bailout program the country needs to avoid default next month. "Certainly the fear that Greece is going to default now has subsided," said Ken Polcari, managing director of ICAP Equities in New York. "Although it is still not a done deal -- but the fact is, it is certainly moving along, so that is obviously positive." Greece's government ...