Away From European Financials

Sunrise Market Commentary - Fixed Income Weak US payrolls push core bonds higher again - On Friday, it was weaker US payrolls that helped core bonds eke out more gains, but non-core bonds held up quite well. Spreads even narrowed in the intra-EMU bond markets. We fear that this won't be the case today, as French and Greek election results inject uncertainty into markets. - Currencies: Euro testing key support levels - On Friday, trading in the major euro cross rate was rather calm, but the pressure remained to the downside. The US payrolls were unable to change this pattern. This morning, EUR/USD is testing the key 1.2974 support while EUR/GBP is trading south of the 0.8068 level. A sustained break below these levels would raise a red alert for the single currency. The ...

The last 24 hours have heaped even more pressure on Madrid. First there was Standard & Poor's two notch rating downgrade for Spain from A to BBB+ with a negative outlook. Second, was a further deterioration in the unemployment rate in the first quarter. S&P's rationale for the downgrade was down to 1, the possibility that the government will need to provide further fiscal support to the banking sector and 2, the deterioration in the budget deficit trajectory for 2011-2015. S&P also mentioned the significant risks to Spain's economic growth, which could weigh on the country's creditworthiness. Spain now has the same rating as Ireland after S&P affirmed Ireland's rating at BBB+ with a negative outlook. It sounded fairly impressed with the Irish government's 'proactive and substantive' ...

Fundamental Analysis EUR "We won’t get an economic improvement anytime soon in Europe" - Alexander Krueger, chief economist at Bankhaus Lampe KG Euro area manufacturing contracted for a seventh consecutive month, said the Institute for Supply Management on Thursday. An index measuring manufacturing activity rose to 49 in February from 48.8 in January. USD "The economy is expanding, but the data is choppy and somewhat inconsistent" - John Herrmann, president of Herrmann Forecasting LLC The number of Americans claiming for unemployment benefits declined slightly to 351 thousand in the week ended February 25 from the week before, said the Department of Labor on Thursday. GBP "U.K. manufacturers continued to raise production and employment in February, building on the solid foundation ...

Forex News and Events: Once again to was Moodys that rode in and killed any hope of risk gaining a foothold today. Moody's cautioned it may downgrade the credit ratings of 121 financial institutions with 114of those being European, in another indication the impact of the euro zone government debt crisis is spreading throughout the global financial system. "Capital markets firms are confronting evolving challenges, such as more fragile funding conditions, wider credit spreads, increased regulatory burdens and more difficult operating conditions," the ratings agency said in a statement. On the European front, just when it seemed we were close to finalizing agreements on Greece, it's all been thrown into disarray. The market started to get nervous when Eurgroup chief Juncker unexpectedly ...

(Reuters) - European shares rose on Thursday as investors bet on a positive outcome to Greek reform talks needed for a fresh bailout and that European Central Bank policy would remain supportive for the region, while strong results also helped. Investor sentiment improved after Greek leaders agreed on most of the austerity measures to secure a rescue fund needed to avoid a messy default which could have a contagion effect to other debt-laden countries like Portugal. Traders were also betting the European Central Bank's interest rate meeting would give hints of future rate cuts as well as a fresh steer on the expected take-up rate at its second auction of cheap three-year loans (LTROs). "The next thing to focus on is the second LTROs and we are getting evidence that financials are being ...

Fundamental Analysis EUR "The merger between Deutsche Boerse and NYSE Euronext would have led to a near-monopoly in European financial derivatives worldwide" - Joaquin Almunia, competition commissioner The European Commission has blocked a 9 billion dollar merger between Deutsche Börse and NYSE Euronext stock exchanges, saying that it would have stifled competition and created a monopoly in derivatives trading. USD "The job market continues to grow at a moderate pace" - Jonathan Basile, senior economist at Credit Suisse in New York The number of Americans who have found a job in the private sector in January declined to 170 thousand from a revised 292 thousand the prior month, the ADP Employer Services said on Wednesday. GBP "The UK manufacturing sector has sprung to life in the first ...

Stocks extended January's rally on Wednesday after upbeat global manufacturing data boosted sentiment and as Greece neared a long-delayed deal with private creditors. The recent run of better-than-expected economic data around the world, though still not suggesting a booming expansion, has helped lift equity markets as investors move away from a worst-case scenario for the global economy. An index of the U.S. manufacturing sector rose in January to its highest level since June, an industry group said, while China's factory sector expanded slightly, confounding expectations for a contraction. Germany recorded its first rise in manufacturing output in four months. "The numbers aren't horrible, the trend continues that the news is OK," said Brian Battle, vice president of trading at ...

With the Standard & Poor's 500 Index off to its best January in 15 years, it's getting tougher to find cheap stocks in the United States. But it's not much of a problem in Europe. Sovereign default worries have made the region's shares the cheapest they've been to American investors since 2004. Companies in the S&P Europe 350 are trading at around 10 times earnings for 2012, compared to 12.2 for the S&P 500. That means investors are getting a 20 percent-plus discount for looking across the pond. For good reason, of course. Investors are still nervous about the future for European equities, since no one yet knows how the debt crisis is going to play out. On any given day, fresh rumors abound regarding the dismal outlook of nations like Greece, Spain, or Italy. For speculators with ...

(Reuters) - European shares rose on Wednesday, helped by a boost to bank stocks from hopes of an agreement in Greek debt swap talks and better-than-expected Chinese manufacturing data. Earnings, which have so far only given mixed results, were another focus, with Infineon (IFXGn.DE) rising 5.5 percent, near the top of the leaderboard after the German chipmaker reported forecast-beating results. Banks, many of which have exposure to euro zone sovereign debt, featured among the best performers, with the STOXX Europe 600 Banks index .SX7P up 2.4 percent. Greek Finance Minister Evangelos Venizelos said talks between Greece and its private creditors were "one formal step away," with a deal needed to avoid a messy default which could have serious consequences for financial markets. "It is ...