Battles Strong Yen

Sunrise Market Commentary - Fixed Income: new contract highs - London-traders returned and the market seemed to react with a lag to this weekend's election results. In a risk off session, both the German Bund Future and the US Note Future set new contract highs, respectively at 142.62 and 133-04. - Currencies EUR/USD testing key support - On Tuesday, sentiment on the euro remained fragile even as there was little news from the political scene in France or Greece. EUR/USD is again testing the key 1.2974/55 support area. A break below this level would be highly significant from a technical point of view. The Sunrise Headlines - US Equities dropped sharply lower yesterday, but reversed most of their losses in the final hours of trading. The S&P ended the session 0.43% lower. ...

FUNDAMENTAL OUTLOOK at 0800 GMT (EDT +0400) WORLD USDJPY consolidated overnight with FOMC and BoJ policy meetings drawing closer. Our analysts are not concerned about yesterday’s higher-than-expected initial jobless claims data. Instead, they point to distortions associated with Easter holidays and the cross over to a new quarter, which led to volatility and an upside bias. Economic data elsewhere also disappointed: existing home sales fell to an annual rate of 4.48 mn and April Philly Fed manufacturing index down to 8.5. Meanwhile, Bank of Japan remains under intense political pressure to ease again. Economy Minister Furukawa urged the BoJ to take steps to achieve its 1% price goal for the second day in a row. He explicitly pointed to the option of buying JGBs with longer maturities, a ...

Fundamental Analysis EUR "Market stresses will eventually force the ECB to restart the bond program" - Market stresses will eventually force the ECB to restart the bond program The European Central Bank is expected to restart government bond purchases rather than proceed with another round of long term refinancing operation. USD "Disposable incomes of consumers are still being squeezed. That does make it difficult for consumption to accelerate from here" - Jeremy Lawson, an economist at BNP Paribas in New York U.S. consumer confidence deteriorated slightly in April. The Thomson Reuters/University of Michigan’s preliminary index of sentiment declined to 75.7 from 76.2 in March. GBP U.K. "has a wealthy, open, and diversified economy" - S&P Standard & Poor's reaffirmed the U.K.'s triple ...

(Reuters) - Japan's government stuck to its assessment that the economy is slowly recovering on Thursday but raised its view on exports, saying overseas shipments are showing signs of stabilizing on a moderate pickup in the United States and some return in Asian demand. It said in a monthly report that the pace of decline in consumer prices has eased but Japan remains in mild deflation, a slight change from the previous report when it just said the economy was in mild deflation. "The economy is still picking up slowly, while difficulties continue to prevail due to the earthquake," the Cabinet Office said in the report for April, the sixth straight month it has used the same expression. The government's view is similar to that of the Bank of Japan, which said on Tuesday the economy is ...

Fundamental Analysis EUR Greek CDS sellers might have to pay 78.25 cents on each euro of the bonds to cover the insurance claims caused by Greek credit restructuring. According to Cedex Group and Markit Group, the dealers have set an initial 21.75% price at a Greek-bond auction today. USD United Parcel Service expanded its bid for TNT Express by 5.6% to EUR 5.16 billion to shelter the largest deal in UPS history and beat the offer from Deutsche Post AG. Atlanta-based UPS raised its offer price from EUR 9.0 a share to EUR 9.5 a share. TNT shares added 1.8% on the announcement in Amsterdam trading session. GBP British FTSE 100 index declined on Monday as dropping commodity prices negatively affected the value of resource shares. Financials also provided substantial downward contribution. ...

(Reuters) - The euro gained in Asia on Tuesday, popping above resistance at its 90-day moving average after euro zone finance ministers sealed a bailout package for Greece, though some analysts doubt the news will give the currency a big fillip. The agreement on the 130 billion euro ($172 billion) bailout program, while long expected, will help Greece meet repayment needs next month, sparking a knee-jerk, 100-pip rise in the euro against the dollar. The euro rose as high as $1.3293, its highest in nearly two weeks, before stabilizing at around $1.3265, about 0.2 percent higher than late Monday levels in London. U.S. financial markets were on holiday on Monday. The common currency, in its third attempt in recent weeks, pierced its 90-day moving average at $1.3273, and traders say a ...

Fundamental Analysis EUR ECB President Mario Draghi announced his plan for curtailing European debt turmoil starts to work as large amount capital injection in region's financial system in December begin to oil credit markets amid falling Spanish and Italian borrowing costs. The Euro slightly appreciated after Draghi's announcement. USD Barack Obama formally notified the Congress that US government needs to borrow another $1.2 trillion to meet existing commitments. Congress should vote during the next 15 days on the approval of the proposal that may raise debt ceiling to about $16.4 trillion. The government was near default in 2011 exceeding its debt ceiling. The proposal is expected to increase battles between Obama and Republicans. GBP UK home prices climbed in December, reaching 8- ...

(Reuters) - Japan will take decisive action against any speculative moves in the currency market, Finance Minister Yoshihiko Noda said, signaling Tokyo's readiness to intervene to stem further yen rises after its spike to a record high last week. Here are some milestones in the yen's 140-year history: 1871 - The yen becomes Japan's currency as part of the Meiji Restoration, which marked the start of Japan's modernization and opening to the rest of the world. Japan adopts the gold standard. 1949 - After World War Two the dollar's fixed rate is set at 360 yen via the Bretton Woods system, partly to help stabilize prices in the Japanese economy. 1959 - The dollar/yen exchange rate is liberalized. The margin of fluctuation is set at 0.5 percent on either side of its dollar parity. 1963 - ...

Weekly Economic and Financial Commentary U.S. Review The Economy Continues to Lose Momentum In July, industrial production rose a solid 0.9 percent, but reports from the New York and Philadelphia Federal Reserve banks showed activity falling off in early August. Home sales and new home construction also appear to be losing momentum. Sales of existing homes fell 3.5 percent in July, while housing starts fell 1.5 percent. Mortgage applications for home purchases also declined, despite the recent drop in mortgage rates. Inflation is still running a little hotter than the Fed would like, with the CPI rising 0.5 percent in August and the “core” CPI rising 0.2 percent (1.8 percent y-o-y). Timing Is Everything Most of the hard data we received this week, including reports on ...