Bonds Of Europe's Peripheral

Global stocks rose for the first time in seven sessions on Thursday after relatively encouraging U.S. jobs data and as investor sentiment improved regarding Europe's festering debt crisis. U.S. and European stocks climbed after data showed U.S. claims for unemployment benefits fell last week, an upbeat sign after April's weak employment growth was seen as a harbinger of a deteriorating U.S. labor market. Investors also used a recent streak of declines to step into the markets, lifting the euro against the dollar for the first time in nine sessions and the Dow Jones industrial average for the first time in seven sessions. In a move aimed at ending a four-year banking crisis, the Spanish government effectively took over Bankia SA (BKIA.MC), one of the country's biggest banks, late on ...

Greek and French election results rattled global investors on Monday by undermining confidence in the region's plans to cut spending and tackle its debt crisis, sending the euro to a three-month low. European shares also initially traded lower, with Greek stocks down 6.4 percent .ATG, but reaction was muted with the UK market closed for a holiday. Wall Street stocks were expected to reflect the weaker tone when they being trading .N. Investors sold bonds of other weaker euro zone member states after the two pro-bailout parties in Greece failed to win a parliamentary majority, rekindling fears over the country's future in the single currency. "The Greek election outcome is the ultimate Greek tragedy. Not having a cohesive government means the IMF will not release further funds. Without ...

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 ...

(Reuters) - The euro weakened against the dollar on Monday and was on track for its worst month since December, pressured by nagging euro zone stresses as German retail sales were softer than expected and Spain slipped into recession. Investors were also wary of buying euros before weekend elections in France and Greece and a European Central Bank (ECB) meeting later in the week that could knock sentiment in the single currency. "There is clear risk aversion in the market," said Boris Schlossberg, director of FX research at GFT in Jersey City, New Jersey, citing data showing Spain's slide into recession and the weaker-than-expected German data. "In short, the news from Europe continues to point to further structural stress in the system." The euro failed to gain traction versus the ...

(Reuters) - Caught in a vice between sluggish global growth and worldwide debt deleveraging, investors face another week of potentially gloomy economic news with no relief in sight from the growing concerns about euro zone debt. The focus will be mainly on the European Central Bank's monthly policy meeting, the U.S. non-farm payrolls report and data on the outlook for the world's manufacturing sector, which still represents 20 percent of the global economy. But these events are not expected to offer much diversion from the steadily worsening crisis in the euro zone, which is driving demand for safe haven assets. "It's about capital preservation from an investor point of view," said Richard Batty, global investment strategist at Standard Life Investments, which has $240.7 billion of ...

Markets Recover But Stresses Remain There are two things dominating the markets right now: 1, the Eurozone debt crisis and growing political risks and 2, central bank policy. The Federal Reserve starts its two day meeting today, which will conclude tomorrow with a press conference by Fed Governor Bernanke. Central bank divergence is a major theme in the markets right now. Weak Australian CPI and PPI data has made a rate cut at the RBA's May meeting all but a certainty. The question now is will the Bank cut by 50 basis points (more than 30 bps of tightening is priced in right now) in May, or cut by 25 bps in both May and June. The latter seems more likely to us as a 50 bp cut is an aggressive move, however, rates in Australia are still fairly high, and so there is room for successive cuts ...

Global stocks and the euro slumped on Monday as disappointing euro zone private sector data and a Dutch budget crisis unnerved investors who scooped up perceived safe haven assets such as the dollar and U.S. Treasuries. With Dutch Prime Minister Mark Rutte tendering his cabinet's resignation in an impasse over budget cuts and dismal PMI figures from the euro zone, economists worried that the region's economy will stay in recession until the second half of the year. The April PMI reports for the euro zone, Germany and France, which are a guide to future activity, pointed to a much faster rate of economic contraction across the debt-laden region than had been expected. U.S. stocks fell sharply soon after the opening, with the Dow Jones industrial average .DJI, the Standard & ...

(Reuters) - Fears of a Europe-wide recession undermining political will to tackle the region's debt crisis gripped financial markets on Monday, sending shares and the single currency lower and driving demand for safe-haven assets. U.S. stocks were also poised to open lower on Wall Street. The economic outlook for Europe was hurt by poor flash Purchasing Manager's Indexes (PMIs) for April, which are a guide to future activity. The reports for the euro zone, Germany and France pointed to a much faster rate of economic contraction across the debt-laden region than had been expected. The gloomier view came as the Dutch government, a close ally to Germany in calling for tougher austerity measures to fight the crisis, was preparing to resign because of a crisis over budget cuts, according to ...

(Reuters) - Spanish borrowing costs jumped at a debt auction on Tuesday but the sale went smoothly and German data gave an upbeat reading of the euro zone's largest economy, providing some relief to investors worried about the debt crisis. The euro and European shares rose and Spanish 10-year bond yields fell further below six percent, a key level breached on Monday. Investors fear Spain's economic problems will reignite Europe's troubles; a break in a country's debt yields above 6 percent has in the past accelerated the rise in borrowing costs to unsustainable territory. But Spain sold 3.2 billion euros of 12- and 18-month Treasury bills, slightly above its target, although yields were higher than at the last sale and analysts said the success was largely due to the participation of ...