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Concern For The Global RecoveryTitle:
Safety dominates investor outlook
(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 ...
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The Weekly Bottom Line : 27/04/2012
The Weekly Bottom Line
HIGHLIGHTS OF THE WEEK
United States
- Europe provided plenty of negative headlines this week. Both Spain and the U.K. confirmed their economies fell back in recession, while the former saw its unemployment rate jump to 24.4%.
- The Dutch government collapsed over a dispute regarding fiscal tightening measures and S&P downgraded Spain's sovereign rating by two notches to BBB+.
- Although unspectacular, things were better in the U.S. First quarter GDP growth came softer than expected. However moderate, a 2.2% q/q annualized economic expansion feels comforting against the European backdrop.
Canada
- Retail trade slid by 0.2% in February as auto sales declined following strong January results.
- Newfoundland and Labrador brought down its budget, ...
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Oil little changed in thin, tug-of-war trade
(Reuters) - Oil prices were little changed on Friday in very light, tug-of-war trading, as concerns about economic growth were countered by hopes for additional easing by the Federal Reserve to boost a sputtering recovery.
Brent edged lower and crude rallied late to settle, reducing Brent's premium to its U.S. counterpart, while both contracts posted second consecutive weekly gains.
Prices felt pressure early, after ratings agency S&P downgraded Spain's credit rating. But oil pared losses ahead of U.S. GDP figures that showed growth cooled in the first quarter.
But some investors believe slowing U.S. growth may prompt the Federal Reserve to launch a third round of government bond buying, or quantitative easing, known on Wall Street as QE3.
"Bad news for the economy is being interpreted ...
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Weekly Economic and Financial Commentary : 27/04/2012
Weekly Economic and Financial Commentary
U.S. Review
First-Quarter GDP Growth Slows
The U.S. economy grew at a 2.2 percent annual rate in the first quarter, somewhat slower than the consensus had expected. Consumption remained the primary driver of growth as business spending slowed and the government sector continued to scale back spending.
In our U.S. review section this week, we discuss the GDP report in the context of the big miss in durables and consider what it means for business spending going forward. We also look at a very small change in the Fed statement this week that reflects an improving view on the troubled housing sector.
Business Spending Poised for a Slowdown?
Durable goods orders for March were ugly. The 4.2 percent drop was the largest decline since the U.S. ...
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Dukascopy Afternoon Forex Overview : 27/04/2012
Fundamental Analysis
EUR
Spain's credit rating was lowered by Standard & Poor's for a second time in 2012 on enduring worries the nation will have to apply additional fiscal backing to lenders as the economy shrinks. S&P cut its long term grade for Spain from A to BBB+ adding a negative outlook. Country's short term rating was lowered from A-1 to A-2, S&P agency reported on Thursday.
USD
Crude oil price declined from almost 4-week high in New York trade after S&P ratings agency cut Spain's sovereign credit rating, boosting concerns that further recession in Europe may halt demand for crude. Oil to be delivered in June lost USD 0.61, reaching USD 103.94 a barrel. June Brent oil gave up USD 0.49 and traded at USD 119.43 a barrel.
GBP
Today the Great Britain Pound extended its gains ...
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Oil pares losses after data
(Reuters) - Oil pared lossed on Friday to trade at around $119.90 a barrel after disappointing U.S. data revived hopes of further liquidity injections from the Federal Reserve to boost the flagging economic recovery.
Brent crude, widely used as a global oil benchmark, was down just 5 cents to $119.87 a barrel by 1341 GMT. U.S. crude oil was off 7 cents to $104.48 a barrel.
Oil was sold off earlier in the session after S&P downgraded Spain's credit rating but pared losses when U.S. first quarter GDP figures missed the consensus forecast. The data hit the dollar, and a weaker U.S. currency is supportive of commodities priced in dollars as it makes them cheaper for holders of other currencies.
Some traders also took the view that the below-expectations GDP figure would open the door to a ...
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LME copper snaps 3-day rise after Spain downgrade
(Reuters) - London copper futures dropped half a percent on Friday, snapping a three-day winning streak after Spain's credit rating downgrade renewed worries about the debt-laden euro zone, trimming appetite for riskier assets.
Copper is heading for its second monthly loss as a shaky global economy, including slower growth in top copper user China, weighed on prices that have fallen more than 5 percent from this year's highs.
FUNDAMENTALS
Three-month copper on the London Metal Exchange slipped $40 to $8,282 a metric tonne by 1033 p.m. EDT, after rising to a two-week high of $8,341 on Thursday.
Copper is down nearly 2 percent so far this month, and has dropped 5.5 percent since hitting this year's peak of $8,765 in February.
The most-active August copper contract on the Shanghai ...
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Gold inches down after Spain downgrade; dollar weighs
(Reuters) - Gold struggled to make headway on Friday as the downgrading of Spain's credit rating fuelled concerns about the debt-stricken euro zone, while a stronger dollar after the Bank of Japan eased policy added to the pressure.
Bullion, which has mostly been tracking riskier assets, hit a two-week high at $1,660.60 on Thursday on upbeat U.S. housing data and the tailwind of the U.S. Federal Reserve's brighter economic outlook and pledge to use more easing should the economy deteriorate.
But the global economic picture remains murky, with euro zone economic sentiment falling more than expected in April and the U.S. job market recovery showing signs of a slowdown.
"Europe has more near-term challenges than the U.S," said Jeremy Friesen, commodity strategist at Societe Generale in ...
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Stimulus speculation lifts copper, most markets
(Reuters) - Commodities ended broadly higher on Thursday, with copper one of the biggest gainers, after high claims for jobless benefits in the United States fed expectations that the Federal Reserve may approve another U.S. economic stimulus.
Investors also bought copper, oil and other key commodities as U.S. housing data that showed contracts to purchase previously owned homes was near a two-year high in March, and on a weaker dollar which boosts demand for dollar-denominated raw materials.
The dollar fell .DXY a day after Fed Chairman Ben Bernanke said the central bank was willing to do more -- including approving a new stimulus -- to help U.S. recovery.
"Yesterday's Fed proclamation that they are prepared to take additional easing steps even in the face of slightly positive growth" ...
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