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Broke Past On FridayTitle:
EUR/USD Rebound On Profit Taking
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 ...
Title:
USD is Preferred Haven
USD is Preferred Haven
USD remains firm ahead of today's FOMC minutes and amid ongoing EU concerns. UK PM Cameron put the situation in the euro area rather succinctly saying that "it either has to make up or face a potential breakup". The dollar index is continuing its ascent towards mid-January highs after breaking a medium term bear channel. Economic data due out shortly incldes April housing starts which are forecast to gain by 4.7% m/m, building permits which are anticipated to fall by -4.5% m/m, and industrial production which is expected to show growth of 0.6%. The minutes from the April 24-25 FOMC meeting will be released at 1400ET and will provide insight into the whether or not the Fed discussed additional measures.
EUR is nearing the 2012 lows against the USD as the euro ...
Title:
The Bank of England's Next Move
The Week Ahead
■The Bank of England's next move
■Is this the beginning of the end for the Eurozone?
■Fed officials reluctant to signal more easing
■Broader risk environment outweighs Japanese rhetoric
The Bank of England's next move
The BOE kept rates on hold when it concluded its May meeting last week; it also allowed the asset purchase program to come to an end. Since the UK slipped back into recession in Q1 2012 and the growth figures at the start of the second quarter have continued to look weak, the decision to hold interest rates was mostly down to the sticky outlook for inflation. The attention now turns to Wednesday's Inflation Report.
The focus will be on the Bank's growth and inflation forecasts. The growth forecasts are likely to be revised lower. Even ...
Title:
Gold hits 4-month low as dollar rises, stocks slide
Gold prices fell to a four-month low on Friday as worries over the financial health of Greece and Spain and huge trading losses for JPMorgan hurt stock markets and the euro, prompting investors to seek refuge in the dollar.
Investors liquidated gold holdings to cover losses on other markets, analysts said, as a rise in risk aversion sparked selling across assets seen as higher risk, while lifting the U.S. currency and safe-haven German Bunds.
Spot gold slid to $1,573.29 an ounce, its weakest since January 3, after support gave way at $1,579, and was down 0.7 percent at $1,582.19 an ounce at 1145 GMT.
Prices pared the worst of their losses as hopes that a Greek government may be formed soon lifted the euro from lows, but spot prices were still down nearly 4 percent so far this week, ...
Title:
U.S. sees China pushed to let market forces work
(Reuters) - China will be compelled to let market forces play a larger role in managing its economy as it faces complicated challenges ranging from an aging population to rising wages and prices, a senior U.S. Treasury Department official said on Tuesday.
Lael Brainard, the Treasury's undersecretary for international affairs, told a group of business people, diplomats and academics that China faces "an extraordinarily steep demographic cliff" that will reduce the advantage of a young labor force willing to work cheaply.
"Wages and costs are rising rapidly. There is a self-reinforcing momentum to have market forces determine how capital is allocated, how exchange rates adjust," Brainard said during a discussion about last week's Strategic and Economic Dialogue talks in Beijing.
...
Title:
Oil dives three percent, set for biggest 3-day rout since August
(Reuters) - Oil plunged more than 3 percent on Friday, with U.S. crude below $100 a barrel for the first time since February, as an abrupt slow-down in U.S. hiring soured economic sentiment weighed and technical triggers intensified selling.
Brent's nearly $4-a-barrel slide took three-day losses to more than 6 percent, the deepest sell-off since August, rattling traders who had been lulled by low volatility this year.
While a downbeat U.S. jobs report weighed, traders said a combination of less definitive factors -- from confusion over margin changes to the breach of Brent's 200-day moving average -- had compounded selling, reminding some dealers of the abrupt $10 collapse in prices on May 5 last year.
"We have broken through key technical levels here after a disappointing employment ...
Title:
US Employment Data in Focus
The Week Ahead
Highlights
US employment data in focus
Bank of Japan underwhelms
RBA likely to cut
The SNB talks tough on the Swissie
Is the UK economy really that weak?
The Eurozone's growth pact
US employment data in focus
Earlier this week, the Federal Open Market Committee (FOMC) held its 2-day policy meeting. The bank kept policy on hold and upgraded the economic assessment, however comments from Ben Bernanke - which did not provide any new insight in our view - kept Treasury yields low, equity markets supported, and the dollar soft with QE3 speculation back into focus.
Fed projections showed upwards revision to real GDP growth with forecasts of 2.4%-2.9% for 2012 up from the prior 2.2%-2.7% estimate and the unemployment rate forecast was lowered to 7.8%-8% ...
Title:
Euro Slightly Higher As Tensions Ease
Sunrise Market Commentary
- Fixed Income: Core bonds hit by profit taking, non-core bonds gain
- Risk aversion ebbed away following Monday's rout, leading to some modest profit taking in core bonds. Non-core bonds did well and yield spreads versus Germany narrowed. Spain and the Netherlands outperformed yesterday. Investors will stay largely sideways today, ahead of this evening's FOMC statement and press conference of Mr. Bernanke.
- Currencies: Euro slightly higher as tensions ease
- On Tuesday, most markets saw a setback on Monday's sharp sell-off in risky assets. In this move, EUR/USD returned to the 1.32 area, but a technically significant break didn't occur. EUR/GBP came near the 0.8143 August 2010 low. Today, the focus of currency trading will be on the Fed.
The ...
Title:
Crude steady, gasoline down as supply worries ease
(Reuters) - Crude oil held steady on Thursday while U.S. gasoline futures tumbled for a fourth straight day as concerns about a supply crunch on the East Coast eased.
Oil balanced between downbeat U.S. economic data and persistent, though receding, supply disruption worries as Iran and world powers wrangle over Tehran's nuclear program.
Gasoline futures extended losses to more than 6 percent over the past five days on expectations by traders and analysts that the idled ConocoPhillips' (COP.N) 185,000 barrels per day refinery in Trainer, Pennsylvania, was likely to be sold soon to Delta Air Lines (DAL.N).
"Gasoline futures had risen sharply on fears of a shortfall in East Coast refinery capacity, but news about the Trainer refinery is changing that perception," said Tim Evans, energy ...
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