Better Data Drives

Asian shares tumbled on Friday and were set for their worst weekly showing since September, amid political turmoil in Greece and signs of growing instability in Spanish banks, with investors adding the latest weak U.S. data to the list of risk factors. Assets across the board, from commodities such as oil and gold to riskier currencies such as the euro and the Australian dollar were all heading for their weekly losses. Financial stocks were hammered after the head of Australia and New Zealand Banking Group (ANZ.AX) said volatile conditions in global markets have caused the wholesale funding market for Australian banks to freeze again, a worrying echo of the global financial crisis. European shares were also set to fall, with financial spreadbetters predicting that major European markets ...

(Reuters) - Spring is in the air for financial markets. Liquidity is abundant, the desire to invest is rising and green shoots of growth are becoming more apparent across the developed world. The official start of spring in the northern hemisphere falls on March 20, when night and day are equally long, but before investors put a grim winter behind them entirely, they may want to wait for surveys of economic health in China and the euro zone due a couple of days later. Along with this purchasing managers data, the coming week's releases feature a detailed readout on the health of the U.S. housing market, inflation measures from the UK and Germany, and Japan's latest trade figures. And perhaps the biggest cloud on the horizon is rising oil prices, which are threatening to unleash ...

The Week Ahead Highlights Better data drives risk on, Fed QE3 off Still waiting on a Greek debt deal Central banks' decisions on tap Better data drives risk on, Fed QE3 off The past week ended with a string of better-than-expected data releases from key major economies, suggesting the global recovery may avoid a more worrisome downturn. Mostly better than expected PMI's from Europe, UK, China and the US were supplemented on Friday by a much stronger US employment report than was expected. We're cautiously optimistic that the better US jobs report is a valid signal that the US recovery is improving, but we're also aware that January employment numbers are especially volatile due to seasonal factors, and subject to major revision. The decline in the unemployment rate in the ...

(Reuters) - The U.S. stock-market surge in January may feel to some like having reached a remote mountain peak. It was a lot of work, but there are not many people to celebrate with. The S&P 500 .SPX rose 4.4 percent in January, the second-best month for stocks since 2010. But trading volumes were down sharply - speaking to worries that the market's gains are unsustainable. Rather than a cause for concern, however, strategists say the reduced volume may be better down the road for individual investors frustrated in recent years with the fluctuations caused in part by volatile, computer-driven activity. January, in contrast to wild daily moves during the summer of 2011, was relatively quiet. That kept high-frequency traders and hedge funds that capitalize on big shifts on the sidelines. ...

Ahead of a key European interest rate announcement scheduled for later today, the EUR once again has turned bearish following comments from a from a leading credit agency which highlighted just how vulnerable the currency is. With Spanish and Italian debt auctions scheduled to close out the week, traders can count on heavy volatility throughout the day today. Economic News USD - Return to Safe-Havens Turns USD Bullish The US dollar recouped many of its losses from earlier in the week yesterday, as traders once again abandoned riskier assets in favor of safe-haven currencies like the greenback. The move brought the EUR/USD just shy of its 16-month low, while the GBP/USD fell to right around the 1.5300 level. The dollar's bullish movement began after comments by a leading credit agency ...

The Dow rose 208 points yesterday. Hardly a day goes by without a 100+ point move. We’d be disappointed with anything less. What these extreme moves are telling us is that investors are very uncertain. They know there’s a lot at stake. And they don’t know which way it will go. Yesterday and the day before they were betting that Europe would muddle through. Their optimism seemed justified as Greek premier George Papandreou dropped the idea of holding a referendum. ‘Hey, George,’ said the bankers… ‘You can’t let the voters decide something like this. You know what they’ll say. They’ll say they don’t want to pay our damned debts. And what are we going say?’ Of course, it’s not that simple. When the going was good, the Greeks were able to borrow a lot of money at German interest rates. ...

This Week's US Macro Reports Key to FOMC's Decision On More QE While we have begun this week with a heavy risk off environment - mainly based on the European financial sector and the latest developments in the euro zone sovereign debt crisis - for US equities and the fate of further Fed stimulus will rely on what the macro data from the US tells us. Can Manufacturing Sector Rebound Heading into 4th Quarter For the US, this week will feature 3 key manufacturing reports, including a look at both leading and coincident indicators for the sector. The three reports are the Empire manufacturing index, the Philadelphia Fed index, and industrial production - all coming out on Thursday. The prognosis is mainly a downbeat one, as both the Empire and Philly fed index is are expected to continue ...

(Reuters) - World stocks rose from a two-week low on Wednesday and the euro rebounded across the board after Germany's top court rejected lawsuits aimed at blocking Germany's participation in bailout packages for Greece and other euro zone countries. The Constitutional Court also handed the country's parliament a greater say over euro zone bailouts, potentially hampering Berlin's ability to act decisively against a two-year debt crisis. But it at least cleared the way for Germany to contribute more to the euro zone's rescue fund, giving temporary relief to investors after this week's sharp sell-off in risky assets. Better-than-expected data on the U.S. services sector and Australian growth as well as speculation that Washington may unveil a $300 billion package to create new jobs also ...

(Reuters) - Factory activity in the Mid-Atlantic region plummeted in August, falling to the lowest level since March 2009, while existing home sales unexpectedly dropped in July, tempering hopes for a revival of economic recovery. The number of Americans claiming new jobless benefits rose last week also and consumer prices increased at the fastest pace in four months in July, highlighting the challenges facing the Federal Reserve. "Obviously, a very sharp contraction in orders is bad news (in the Philadelphia Fed index), " said Pierre Ellis, senior economist at Decision Economics in New York. "It may be tied to the financial markets since the survey overlaps the last couple weeks of financial market volatility. It may have impacted corporate sentiment. "It's hard to squeeze any good ...