Boosting The Chance The Euro

(Reuters) - World stocks skidded and the euro fell to a 21-month low on Wednesday on worries about Greece's possible exit from the euro zone, which threatened to deepen the region's debt crisis and hurt an already fragile global recovery. Nervous investors piled into low-risk U.S. and German government debt, sending their yields lower. The dollar also was favored as a safe haven by investors. Each euro zone country will have to prepare a contingency plan for the possibility of Greece's leaving the bloc, three euro zone sources told Reuters, citing an agreement reached by officials. A scramble for low-risk investments enabled Germany to pay no interest on 5 billion euros in new two-year debt amid the absence of new measures to tackle the region's debt crisis from a European leaders' ...

(Reuters) - Gold fell more than 2 percent on Wednesday as a wave of selling triggered by better-than-expected home sales and heightened by despair surrounding the euro zone sent prices toward key technical support levels and wiped out year-to-date gains. Spot prices dropped as low as $1,534.25 an ounce, down 2.15 percent, by 12:08 p.m. EDT (1608 GMT), flirting with a bear market with a drop of 20 percent from September record highs. Market players are watching whether gold can hold key technical support at $1,525 an ounce. The sell-off took bullion back to December lows hit in last week's rampant selling and reignited concerns that a recovery in recent days was a "dead-cat bounce", slang used to describe a small, temporary rally that follows a significant decline. U.S. gold futures for ...

(Reuters) - World stocks stumbled and the euro fell to a 21-month low on Wednesday on worries about Greece's possible exit from the euro zone, which would deepen the region's debt crisis and hurt an already fragile global economic recovery. Each euro zone country will have to prepare a contingency plan for the eventuality of Greece leaving the bloc's currency, three euro zone sources told Reuters, citing an agreement reached by officials. A scramble for low-risk investments enabled Germany to pay no interest on 5-billion euro worth of new, two-year debt amid the absence of new measures to tackle the region's debt crisis from a European leaders' summit in Brussels. "The markets are on edge and sensitive to every possible out-of-control scenario coming out of Europe," said Peter Boockvar, ...

(Reuters) - World stocks and the euro fell on Wednesday as investors shunned riskier assets on worries about Greece's possible departure from the euro zone, which would deepen the region's debt crisis and hurt an already fragile global economy. Each euro zone country will have to prepare a contingency plan for the eventuality of Greece leaving the single currency, three euro zone sources told Reuters, citing an agreement reached by officials. A scramble for low-risk investments enabled Germany to pay no interest on a new two-year debt issue amid the absence of new measures from a European leaders' summit in Brussels to tackle the region's debt crisis. "The markets are on edge and sensitive to every possible out-of-control scenario coming out of Europe," said Peter Boockvar, equity ...

(Reuters) - World shares fell and Germany sold two-year bonds paying virtually no interest on Wednesday as investors shunned riskier assets, doubting that any new measures to tackle the euro zone debt crisis would emerge from a European leaders summit. Concerns the latest EU summit could be a failure sent the euro to a 21-month low, put an end to a rally in European equities, and sent yields on Spanish and Italian bonds higher. But investors bid strongly at an auction of safe-haven two-year German government bonds resulting in a yield of just 0.07 percent, while the dollar, measured against other major currencies .DXY hit a high not seen since September 2010. The leaders are expected to discuss boosting growth at their meeting later on Wednesday and the idea of a joint euro zone bond. ...

(Reuters) - Gold fell towards $1,550 an ounce in Europe, pressured by concerns that a European Union meeting later on Wednesday would fail to significantly ease worries over the euro zone debt crisis which lifted the dollar to a 21-month high against the euro. The dollar, along with German bond futures, benefited from a flight from riskier assets, including stocks and commodities such as copper and oil. Spot gold was down 0.1 percent at $1,555.50 an ounce at 0930 GMT while U.S. gold futures for June delivery were down $20.60 an ounce at $1,556.00. "Gold is acting more as a risky asset, and everything is tumbling this morning ahead of this informal finance ministers meeting, where nothing good is really expected," Societe Generale analyst Robin Bhar said. "It is not inconceivable that ...

The Week Ahead Highlights Europe steps closer to the cliff edge Can the USD extend its rally? Bank of Japan may extend maturity of its bond buys Pricing in more QE from the Bank of England Europe steps closer to the cliff edge It was a pivotal week for the Eurozone after Greece announced that it was heading back to the polls after the top three parities failed to form a coalition government. So now Greece is leaderless, there is a caretaker government in place but it won't be able to enforce the austerity required to get the next tranche of bailout funds necessary for Greece to avoid running out of money in July. So as time runs out for Greece the European authorities have been clear: the upcoming election is a referendum on euro-membership. Either vote for pro bailout ...

Spain was in focus this morning after rating agency Standard & Poor's downgraded 11 of Spain's largest banks, which comes only a few days after the agency cut Spain's sovereign rating to BBB+ with a negative outlook. The bank/ sovereign feedback loop is getting more and more toxic for Spain. Like Ireland, bad bank debts seem to lead back to the government, while Spanish banks see their capital bases eroded when Spanish bonds weaken since they hold so much domestic sovereign debt. The only 'good' news was that Spain's official GDP figures for Q1 were slightly less bad than expected. The economy contracted by 0.3% rather than the 0.4% that was forecast by the market (and announced by the Bank of Spain 2 weeks ago). It's difficult to know why there was an improvement as the bulk of the detail ...

(Reuters) - Asian shares rose on Monday as weaker-than-expected U.S. growth data left open the possibility of further monetary stimulus from the Federal Reserve to boost growth, but trading was subdued with Japanese and Chinese markets closed. The dollar remained pressured by Friday's report showing annual growth in the U.S. economy cooled in the first quarter to 2.2 percent, below a 2.5 percent forecast, and concerns about lower fuel demand brought oil prices lower. "A flavor of QE (quantitative easing) is back in the air, driving the U.S. dollar lower and risky assets higher," said Sebastien Galy, strategist at Societe Generale. Asian equities followed the rise in global equities on Friday on the back of strong earnings reports, although Asian growth prospects were clouded as South ...