Confidence Drops In July

The dollar rallied and Treasury yields soared on Wednesday, boosted by a brighter economic outlook from the Federal Reserve and news that most U.S. banks passed stress tests. Stocks in Europe climbed to a near-eight-month peak, and the dollar notched a fresh 11-month high against the yen. Yields on U.S. Treasuries hit their highest level since October and German 10-year bond yields spiked to a three-week high as demand for safe-haven government debt waned. "Equities are getting the message that they are cheap relative to bonds, which is the other side of bonds getting the message that they are extremely expensive," said Alan Ruskin, head of G10 currency strategy at Deutsche Bank in New York. But U.S. equities were mixed after a five-session rally took indices to multi-year highs in the ...

(Reuters) - On top of euro zone debt troubles, Wall Street now has to worry about sagging sales from Europe as a recession in the region seems more likely. Warnings from companies such as chemical maker DuPont (DD.N) and chip maker Texas Instruments (TXN.N) suggest the crisis may already be taking its toll on corporate America. While holiday shopping has started on an upbeat note, the corporate warnings could sour the cheer for some investors. "We are now beginning to see the collateral damage of the events in Europe with the earnings guidance cuts," wrote Peter Boockvar, equity strategist at Miller Tabak & Co. in New York. Fourth - and first-quarter earnings growth estimates for Standard & Poor's 500 companies have come down sharply since July, underscoring worries about the outlook ...

Forex News and Events: With the markets completely focused on events in Europe, headlines continued to define FX trends. Risk currencies rallied as there is hope that this week’s EU meeting will bring some solid announcements. A large part of the shift in risk sentiment was due to the speculation that the IMF is considering a financial aid package for Italy. EURUSD was able to rally off the 1.3286 low to 1.3398 while USDJPY trade up to a high of 78.29. Asian regional indices are all trading higher with the Nikkei up 2.03% and Hang Seng up 1.38%. European yields contracted with big drops in Italian and Spanish government bonds. Overnight, comments from the rating agencies did take some of the steam out of the current rally. French news reported that S&P could change Frances outlook to ‘ ...

Stock markets, commodities and other riskier assets rallied Tuesday on hopes the European officials will soon reach an agreement on measures for handling the Euro-Zone debt crisis. Economic News USD - USD Drops as Stock Markets Rally The US Dollar declined Tuesday as global risk appetite recovered on growing speculation euro-zone will soon take measures to attack the debt crisis. As global stocks rallied Tuesday, safe currencies such as the USD and JPY declined versus their riskier counterparts. The Dollar also lost some ground after the release of better than expected data from the US. The S&P/CS Composite-20 HPI showed U.S. home prices rose 0.9% in July and the CB Consumer Confidence also showed a slight increase this month, though came less than expected. Wednesday, traders should ...

Growth in retail sales stalled in August, hurt by a pitched battle over spending in Congress and raising fresh questions about the country's ability to steer clear of a double-dip recession. Sales were unchanged from a month earlier, a Commerce Department report showed on Wednesday. It was a weaker reading than expected and sales growth during June and July were revised downward. Consumer confidence plunged in August after a bruising battle over the budget slammed stock prices and pushed the nation to the brink of default. "The consumer reacted to the debt ceiling, the downgrade and the equity market swoon by basically hunkering down and not spending," said Tom Porcelli, senior U.S. economist at RBC Capital Markets in New York. Consumer spending accounts for about two-thirds of U.S. ...

US Economic Indicators Preview (Week of 12 to 18 September 2011) Retail sales (Aug): modest increase amid drop in car sales Consumer prices (Aug): annual rate still elevated but could have peaked NY Empire and Philadelphia Fed index (Sep): less negative albeit still indicating contraction Industrial production (Aug): unchanged at best UMI consumer sentiment (Sep): stabilisation after sharp drop Despite the only modest economic upswing, government revenues have performed better than expected, and thus the Congressional Budget Office (CBO) has adjusted downwards its deficit projection for fiscal year 2011, which ends in September. It now expects the federal budget deficit to have remained more or less stable at about $1290bn; the deficit ratio would then decline ...

(Reuters) - Fears of a global financial meltdown or a double-dip recession often send gold investors scurrying to put on bullish bets in the options market. Over the past month, however, gold bulls have had new company: Traders who sought protection against a decline in bullion prices as they became increasingly fearful that a series of steep one- or two-day drops over the past month could lead to a deeper fall. Gold options' implied volatility -- a measure of how much traders expect prices to move, either up or down, in the future -- has posted its strongest surge in over two years and is more than double its level of early July. On the surface of it, no surprise: options volatility usually rises in tandem with real market volatility. However, more gold option traders are using puts to ...

(Reuters) - Anyone expecting Federal Reserve Chairman Ben Bernanke to outline bold new measures to boost flagging U.S. growth on Thursday is likely to come away disappointed. Bernanke, who speaks at 1:30 p.m. Eastern, no doubt will nod to the drumbeat of disappointing news on the recovery, but he will likely avoid getting out in front of what is shaping up to be an epic brawl among Fed officials who differ widely over the need for further monetary easing. "Given the level of opposition coming out of the woodwork, it will be very difficult for the chairman to pre-emptively announce any further moves for monetary policy," said Eswar Prasad, an economist at Cornell University. Nor will the Fed chairman want to trespass on President Barack Obama's speech on job creation later on Thursday. ...

(Reuters) - Manufacturing unexpectedly grew in August and fewer Americans filed new claims for jobless aid last week despite a slump in confidence that threatened to push the economy back into recession. Other data on Thursday showed little signs of consumers hunkering down in response to the collapse in confidence. Major automakers posted sturdy gains in domestic sales in August from a year ago and consumers shopped for an array of goods last week. The reports were the latest in a series to suggest the economy remained on a slow-growth path and offered hope it would dodge a recession. "I am breathing a little sigh of relief that the bit of data that we have had over the course of August is weak but not giving the recessionary type of signal," said Stuart Hoffman, chief economist at PNC ...