But Market Still Favors

Fundamental Analysis EUR "The ECB should be preparing itself" for "the return of significant financial market tensions" - Silvio Peruzzo, an economist at Royal Bank of Scotland Group Plc Spanish "market conditions are not justified," said ECB Executive Board member Benoit Coeure on Wednesday. "Will the ECB intervene? We have an instrument, the securities markets program, which hasn’t been used recently but it still exists." USD "Import prices were certainly a problem for businesses in the last three months, but we’ve seen those pressures ease" - Jacob Oubina, a senior U.S. economist at RBC Capital Markets LLC U.S. import prices increased more than expected in March, 1.3 per cent, reflecting higher fuel costs, the Labor Department said Wednesday. GBP "The unusually warm weather in ...

Fundamental Analysis EUR "There are growing fears that the Spanish economy is caught in a pernicious circle" - Nicholas Spiro, managing director of Spiro Sovereign Strategy Spain’s efforts to calm investors with 10 billion euros in savings on education and health spending failed to stem concerns the nation may need additional capital if the economy weakens more than expected. USD "Europe is a temporary concern. The market is signaling they haven’t fixed the whole problem" - James Swanson, chief investment strategist at MFS Investment Management U.S. stocks extended losses on Tuesday as Spain’s plan for more austerity failed to halt drop in bond prices. GBP "We now know that there will not be any new money printing and the rally in European equities appears to be over" - Stewart ...

Fundamental Analysis EUR "The results are a far cry from the blowout auctions we saw between December and February, which will no doubt be interpreted as the LTRO bid having dried up" - Peter Chatwell, Interest Rate Strategist at Credit Agricole in LondonSpain’s cost of borrowing surged after the first auction since the country presented its austerity budget. Yields on 10-year sovereign bonds soared by 11 basis points to 5.52%. USD "I would have to see some pretty severe circumstances before I endorse for another round of quantitative easing" - Dennis Lockhart, Atlanta Fed President Federal Reserve policymakers believe that improving US economy reduces the need for further monetary accommodation, with reference to minutes of the central bank’s March meeting. GBP "The last five years ...

Volatility and choppy trading continue to dominate the market and especially Europe as the outlook for the euro area and growth in the region remains the most uncertain. Fears have subsided for now and the risk appetite is gradually improving on good global data from the United States and China which overall pushed the euro above $1.33 and the pound above $1.60 once again. Rationally, one would ask how sustainable are the gains for risky assets and whether the gains are appropriate considering the economic outlook. Unwinding of jitters over Europe and slowing fears over global growth are supporting risky asset gains, yet generally, that does not alter the fact and the need for the dollar to gain grounds on a stronger economic outlook. The Chinese central bank governor today called for a ...

(Reuters) - Federal Reserve Chairman Ben Bernanke and other top officials of the U.S. central bank on Thursday highlighted risks to the economic recovery despite recent signs of strength, but offered few hints that any additional monetary stimulus might be needed. Bernanke told lawmakers there was reason to be suspicious of the recent decline in unemployment given the weakness of economic growth. "There's still a bit of a contradiction between the improvement in the labor market and the speed of the overall recovery," Bernanke said in a second day of testimony to Congress. "You've still got consumption spending growing relatively weakly." Two of the Fed's regional presidents, Sandra Pianalto of Cleveland and Dennis Lockhart of Atlanta, also cited the economy's shaky stance, with ...

(Reuters) - The U.S. economy is gaining strength as evidenced by lower unemployment and other positive recent economic data, but it remains far from its 'optimal condition,' Atlanta Federal Reserve President Dennis Lockhart said on Thursday. Lockhart, a voting member of the U.S. central bank's Federal Open Market Committee this year, also said he still favors low-rate monetary policy even though at present low rates aren't stimulating much credit growth. "Given the circumstances of the economy, which I described earlier as still striving to get its legs, I continue to think the benefits of low-rate policy outweigh the risks," Lockhart told a banking industry conference hosted by the Atlanta Fed. He said caution prompted by uncertainty - particularly uncertainty over the outcome of the U. ...

(Reuters) - U.S. farmers this spring will seed the largest area with corn since World War Two as a mild and dry winter has raised expectations for a quick planting this spring , a Reuters poll of 24 analysts showed, signaling a boost to razor-thin stocks and lower prices in 2012. The survey showed that farmers were gearing up to plant 94.2 million acres, which could produce a record crop of 13.8 billion bushels based on a trendline yield of 161.4 bushels per acre. It would surpass the previous record of 13.1 billion in 2009. Farmers were expected to plant 75.3 million acres with soybeans, up slightly from last year's 75 million. Seeding of corn, used primary as livestock feed and to produce the gasoline additive ethanol, kicks off in the southern states in March and winds its way up to ...

Dow up 96 yesterday. Gold up $4. Oil above $100. Nothing special to report, in other words. Mitt Romney has revealed his effective tax rate. “About 15%,” he says. That seems like more than enough to us. But it’s not enough to satisfy the zombies. Romney has made a lot of money. They want more of it. It turns out that 15% is lower than average. The AP reports: At 15 percent, Romney’s federal income tax rate would still be higher than the rate paid by many Americans. On average, households making between $50,000 and $75,000 will pay a federal income tax rate of 5.7 percent this year, according to projections by the Tax Policy Center, a Washington think tank. However, when Social Security and other taxes are included, that same household would pay an average federal tax rate of 16.6 ...

Time and time again, Europe solves its debt problems… and every time they don’t get solved at all. Italian bond yields are edging back up. And Greece is negotiating a default. They want to avoid a naked, noisy default…so they are dressing it up as “voluntary” or ‘soft.’ But they can’t disguise the fact that Greece has bills it can’t pay. On the 20th of March it needs to come up with 14.4 billion euros, followed by billions more in the months following. That is more than 6% of national GDP. It would be as though the US had to pay a trillion dollars. Where’s the money to come from? The European Central Bank? The IMF? The Germans? Maybe. But little by little, even the fixers are beginning to realize that this is a problem than can’t be fixed with Band-Aids and bailouts. Greece has too much ...