Assumptions May Need To Be

Weekly Economic and Financial Commentary U.S. Review “March Happiness” Tempered by Late Week Reports As March Mayhem arrives in the sports world, investors found much to be happy about with many of this week's economic releases. Retail sales improved for the second straight month thanks to a stronger labor market, rising consumer confidence and unseasonably warm weather across much of the country. Regional manufacturing indices also improved, while import and producer price growth slowed. However, Friday's reports tempered the enthusiasm as industrial production was unchanged, rising gas prices led to the biggest increase in consumer prices in 10 months, and consumer sentiment slipped. Signs of a Consumer Rebound Following a weak end to 2011, retail sales have bounced back, rising 0.6 ...

(Reuters) - Hedge funds are taking on the powerful International Monetary Fund over its plan to slash Greece's towering debt burden as time runs out on the talks that could sway the future of Europe's single currency. The funds have built up such a powerful positions in Greek bonds that they could derail Europe's tactic of getting banks and other bondholders to share the burden of reducing the country's debt on a voluntary basis. Bondholders need to give up some 100 billion euros ($130 billion) of their investment in the planned bond swap, drawn up in October, but many hedge funds plan to stay out of it. They either prefer letting the country go under, which would trigger the credit insurance they have bought, or hope to get paid out in full if enough others sign up. That puts them in ...

(Reuters) - Oil was steady at around $113.80 a barrel on Thursday as geopolitical tensions kept a floor under prices, following a European Union agreement to stop importing Iranian crude, but a stronger dollar capped gains. Brent crude futures were up 10 cents to $113.80 at 1420 GMT, giving up earlier gains as the dollar strengthened. U.S. crude, which is less influenced than Brent by international developments and more by domestic oil inventories, was down 53 cents at $102.69 a barrel, having earlier slipped more than $1 to an intraday low of $102.16. Analysts and traders said oil prices had come under pressure as the dollar rallied, up 0.80 percent against a basket of currencies .DXY at 1420 GMT. But they added there was potential for crude to rise given the tensions surrounding Iran ...

(Reuters) - Oil edged lower to around $113.40 a barrel on Thursday as a stronger dollar offset fears of supply disruptions to Iranian crude should a European Union agreement to cut off oil imports from the No. 2 OPEC producer come into force. Brent crude futures were off 37 cents to $113.33 at 1018 GMT, giving up earlier gains as the dollar strengthened. U.S. crude was down 72 cents at $102.50 a barrel, after reaching an intraday high of $103.73 earlier in the session. Analysts and traders said oil prices had come under pressure as the dollar strengthened, up 0.59 percent against a basket of currencies .DXY at 1018 GMT. But they added that the risk remained to the upside given geopolitical tensions around Iran and Syria, and calls for strikes in Africa's biggest producer Nigeria which ...

(Reuters) - - Euro zone leaders' agreement to pursue stricter budget rules to preserve the euro may be just enough to put a floor on a sell-off in risk assets into year-end, if not to turn around investor sentiment completely. Investors, however, are about to enter a period of holiday-thinned liquidity, which can lead to sudden and explosive moves. So assumptions about calm or calmer markets need to be tempered. All 17 members of the euro zone, and other EU countries aspiring to membership, agreed on Friday to forge ahead with stricter budget rules as part of efforts to tackle the debt crisis and tighten fiscal integration. Britain said it could not accept proposed amendments to the EU treaty, so the euro zone will negotiate a separate treaty alongside the EU treaty with a tougher ...

The BoE is one step closer towards additional quantitative easing (QE) with the release of the Bank of England's inflation report. Growth is expected to be flat as austerity measures weigh on the UK economy. Deterioration in the global outlook will also keep UK growth limited. The statements have markets expecting another round of bond buying from the BoE and could lead to declines in sterling. Economic News USD - US Inflation Continues to Decline, QE3 Could Follow Inflationary pressures are declining in the US economy, a phenomenon that could lead the Fed to begin another round of quantitative easing (QE). For the fourth consecutive month headline inflation fell with the October numbers showing a -0.1% m/m contraction. Year-over-year CPI was up 3.5%. Core inflation was in-line with ...

The Weekly Bottom Line : 28/10/2011 HIGHLIGHTS OF THE WEEK United States Policymakers in Europe met this week to hammer out a three point plan to save the euro zone. The plan includes a 50% voluntary write down of Greek debt, a strategy to recapitalize the European banking system, and a plan to optimize the use of the existing bailout fund (the EFSF) to safeguard the debt of other vulnerable sovereigns. The plan is a step in the right direction, but its success will depend on a number of factors that are as of yet unknown. Even more than that, it is contingent on the euro zone economy avoiding a significant deterioration in the economic outlook. In the United States, the Obama administration's plan to reform the Home Affordable Refinancing Program should give some support to ...

(Reuters) - Bob King, the president of the United Auto Workers, has a problem: the labor union that credits itself with creating the American middle class has glimpsed the end of the line. Two years after the wrenching restructuring of the U.S. auto industry and the bankruptcies that remade General Motors and Chrysler, the UAW is facing its own financial reckoning. America's richest union has been living beyond its means and running down its savings, an analysis of its financial records shows. Unless King and other officials succeed with a turnaround plan still taking shape, the next financial crisis in Detroit may not be at one of the automakers but at the UAW itself. That picture of the growing financial pressure on the 76-year-old union emerges from a Reuters analysis of a decade of ...

Weekly Economic and Financial Commentary U.S. Review Subpar Economic Growth Defines the Second Quarter The economy grew at a sluggish 1.3 percent in the second quarter after growing a mere 0.4 percent in the first quarter. Stagnation in personal consumption expenditures in the second quarter suggests that higher prices played a role in restraining consumer spending. Consumer confidence unexpectedly rose in July as the number of people expecting conditions to improve six months from now climbed on the month. Data on the housing market this week continued to reflect the weakness in the housing sector. Subpar Economic Growth Defines the Second Quarter This week we learned that the U.S. economy grew a sluggish 1.3 percent in the second quarter of the year after expanding only 0. ...