Bank Of England Is Concerned

Sunrise Market Commentary - Fixed Income: Profit taking continued, but now concluded? - The profit taking on global core bond markets continued in the run-up to tonight's informal EU-Summit. Spanish and Italian spreads decreased significantly but yields remain at elevated levels. Today, the eco calendar is again thin and trading will again be driven by sentiment. - Currencies: Euro rebound short-lived On - Tuesday, the euro came again under pressure even as the global context was not that negative. Sentiment on risk was constructive and intra-EMU spreads narrowed, but all this didn't prevent investors to use any upticks in the single currency to further reduce exposure. The key 1.2642/24 support is again coming within reach. The Sunrise Headlines - In the final hour of ...

Sunrise Market Commentary - Fixed Income: limited profit taking on core bond markets - Global core bond markets fell prey to some profit taking in a thin, dull trading session. However, given the strength of equities, bond losses were very limited and occurred at the onset of trading. Today, the eco calendar remains thin and the profit taking might go some further in the run-up to tomorrow's informal EU Summit. - Currencies EUR/USD rebound on profit taking - The correction in EUR/USD was prolonged, but the euro gains were modest and mostly technical in nature. The UK inflation report is the eye-catcher of the day as it may influence sterling. However, overall trading might again be thin ahead of tomorrow's euro Summit. The Sunrise Headlines - US Equities rose for a second ...

The G8 Summit achieved very little in public which was no real surprise, but there was also an apparent lack of urgency surrounding the Euro-zone situation which was a much greater surprise given a sharp deterioration in the financial sector last week. Where was the urgency for fresh action to help support the Euro banking sector? The absence must surely indicate that Euro-zone and G8 leaders, while paying lip-service to the current strategy, have effectively moved on and are actively planning the next stage of the crisis. Fear is likely to dominate in the short term and this is likely to keep strong defensive demand for the dollar and yen. In these circumstances, there is no real chance of a sustained Euro rally with 2012 lows likely to be seen. Bond markets will be watched very closely ...

Consolidation Continues Post The Spanish Bond Auction The big event of the morning was the Spanish bond auction, however it failed to generate anything more than an immediate ripple in the FX market. The auction raised just below the top of its target amount of EU2.5bn, at EU 2.49bn. Although demand was strong, Madrid had to pay up to attract investors to its debt. The yield on the 2015 debt it sold jumped to 4.375% vs. 2.89% at an auction in April, the 2016 debt sold with a yield of 4.876% vs. 4.037% at an auction earlier this month. Will Germany soften its stance? In the aftermath, EURUSD is down about 20 pips but it remains above 1.27, while Spanish bond yields have actually fallen. The consolidation period in the market may continue as we lead up to the G8 summit in the US this ...

The euro dropped to a four-month low against the U.S. dollar on Wednesday, sliding for a fourth consecutive session and likely to face more losses on fears about a Greek exit from the euro zone. The European Central Bank stopped providing liquidity to some Greek banks as they are severely undercapitalized, further weighing on the euro. These banks have now been moved to the ECB's emergency liquidity assistance program. The development briefly sent the euro below $1.27. It was on track to test the January trough of $1.2623, below which would mark the euro's lowest mark since August 2010. "I think the ECB is playing hardball," said Mark McCormick, currency strategist at Brown Brothers Harriman in New York. "I doubt they want to get too involved in EU politics, but I think they're trying ...

The euro hovered near a fourth-month low against the U.S. dollar on Wednesday and more losses could be in store as investors feared a Greek exit from the euro zone that could result in other peripheral countries following suit. Adding to the bearish sentiment, euro zone central bank sources said the European Central Bank has stopped monetary policy operations with some Greek banks as they have not been successfully recapitalized. The news briefly sent the euro below $1.27, approaching its session low of $1.2679, according to Reuters data. It was on track to test the January low of $1.2623, below which would mark the euro's lowest level since August 2010. "The move was short-lived but it highlights the general distrust out there right now. For most people, there's no good reason to buy ...

The euro recovered from a four-month low against the dollar on Wednesday on expectations that Germany and France will act together to keep Greece in the euro zone, though the single currency remained pressured with investors not convinced Greece won't chart its own course. Germany's Chancellor Angela Merkel and the new French President Francois Hollande had their first official meeting on Tuesday and stressed that they both wanted Greece to remain in the euro zone. . But it was only as the New York session got underway that investors focused on the positive in Europe. A report showing U.S. housing starts rose more than expected in April, offering signs of a nascent housing recovery, added to appetite for risk. Earlier in the global session the single currency fell to a ...

The euro fell to a four-month low against the dollar on Wednesday and risked more losses on the prospect of prolonged political instability in Greece that could result in the country exiting the euro. With Greece announcing fresh elections next month and investors concerned about the knock-on effects of a Greek euro exit for economies like Spain and Italy, investors fled the euro and sought the perceived safety of the dollar and the yen. The dollar rose to its highest in four months against a basket of currencies, while the euro also hit a three-month low versus the yen. The euro dropped to $1.2681 against the dollar on EBS trading platform, which left it on track to test the January low of $1.2624, below which would mark the euro's lowest level since August 2010. However, it recovered ...

(Reuters) - The dollar rebounded from a 2-1/2-month low versus the yen on Tuesday after a barometer of the U.S. manufacturing sector showed unexpected strength, allaying fears the economy was slowing. The Institute for Supply Management's factory data bucked the trend of other recent data that suggested the economy was losing steam, prompting traders to rebuild long dollar bets that had grown stale as the economy's outlook weakened. "The view on the economy has swung from optimism to pessimism of late and this could bring us back to the middle," said Nick Bennenbroek, head of FX strategy for North America at Wells Fargo in New York. "ISM suggests there's no real reason to get too concerned about the path of the U.S. economy at this point." The ISM data, which showed the strongest rate ...