Congress Is Unlikely To Act

Global finance chiefs pressed Europe in weekend talks to quickly put in place the economic reforms needed to finally extinguish its debt crisis now that newly increased financial buffers have bought some precious time. A day after advanced and emerging countries agreed to double the firepower of the International Monetary Fund to help contain the crisis, the IMF's governing panel said on Saturday that the 17-nation euro area must cut government debt burdens further, push bold economic reforms and stabilize financial systems. Debt problems will resurface and growth will stumble unless these steps are taken, the head of the IMF's governing panel, Singapore's finance minister, Tharman Shanmugaratnam, warned. An uneasy calm returned to world financial markets after the Greek crisis subsided ...

(Reuters) - Global finance chiefs pressed Europe in weekend talks to quickly put in place the economic reforms needed to finally extinguish its debt crisis now that newly increased financial buffers have bought some precious time. A day after advanced and emerging countries agreed to double the firepower of the International Monetary Fund to help contain the crisis, the IMF's governing panel said on Saturday that the 17-nation euro area must cut government debt burdens further, push bold economic reforms and stabilize financial systems. Debt problems will resurface and growth will stumble unless these steps are taken, the head of the IMF's governing panel, Singapore's finance minister, Tharman Shanmugaratnam, warned. An uneasy calm returned to world financial markets after the Greek ...

Forex News and Events: In the UK, Fitch revised the UK's ratings outlook to negative, putting them in line with Moody’s. The ratings agency reaffirmed that the government’s fiscal plan was creditable, but stated “The revision of the rating outlook to negative from stable reflects the very limited fiscal space to absorb further adverse economic shocks in light of such elevated debt levels and a potentially weaker than currently forecast economic recovery.” In the US, the domestic data continued to show signs of improvement. Empire State manufacturing index rose to a 21-month high of 20.2 in March (other components were slightly less optimistic) while initial jobless claims dropped back to 355k. Given the recent price action the FX markets are not focused on the US economic data as a ...

Forex News and Events: There weren't any real developments which supported risk accumulation however, markets were well bid all day. Global stock markets had rose particularly on the back of the US bank stress test which gave the US banking sector a boost, but the optimism spilt over other sectors rather than across the ocean. US treasuries continued their upward trajectory giving broad support to the USD. But the big story in FX remains the JPY. USDJPY climbed to 83.32 from 82.87 post meeting. The JPY was not helped by comments from Yasushi Kinoshita that ‘Japans fiscal situation is worse than Greece" which still linger in our minds. With both the BoJ and Fed delivering their expectations for policy path, it seems that interest rate divergence will support USD. The accompanying ...

The euro was little changed in volatile trading on Thursday after falling to a one-week low on U.S. economic data which had reignited doubt about the strength of the recovery. Real personal consumption in January was unchanged from the prior month, making it the third month in a row it was flat. The euro had already been weak before New York opened after a huge injection of cash by the European Central Bank on Wednesday and lingering concerns about debt and the fragile euro zone economy. Testimony from Federal Reserve Chairman Ben Bernanke to a Senate panel after testimony to Congress on Wednesday was closely watched but in the final analysis had minimal impact. "The manufacturing ISM (was) more important and it should keep the pressure on the euro today," said Joseph Trevisani, chief ...

The economy grew slightly faster than initially thought in the fourth quarter and a gauge of factory activity in the Midwest hit a 10 month-high in February, pointing to underlying strength in the economy. Gross domestic product expanded at a 3 percent annual rate, the quickest pace since the second quarter of 2010, the Commerce Department said on Wednesday in its second estimate. The reading, which was up from the 2.8 percent pace the government reported last month and reflected modest upward revisions to almost all components of GDP, added to the recent run of fairly upbeat economic reports. The tone of the GDP report was further bolstered by upward revisions to income and savings data, which should help support consumer spending in the face of rising gasoline prices. "Growth is ...

Economic Data Analysis Cyclical Improvement Continues Outside Euro Area Muted reaction to Greek deal, but coming week's LTRO should be more positively received. Global PMIs to maintain improving trend, but Bernanke's testimony to down play gains. UK cyclical vs structural debate highlighted with soft lending figures, while PMI improves After weeks of anticipation, Euro area officials agreed a second Greek bail-out package. This should pave the way for the Greek PSI offer being made later today. Markets have hardly greeted the news with euphoria, concentrating on the clauses and hurdles stil l to be cleared, specifically the take up in the PSI debt swap and rising social tensions evident in Greece. Nevertheless, progress to date makes it less likely that we will see a ...

Fundamental Analysis EUR "... we doubt that the euro zone will be able to avoid further contraction" - Howard Archer, chief economist for IHS Global Insight Euro zone economy contracted less than expected in the last quarter of 2011 as France and Germany helped mitigate the recession. Gross domestic product fell 0.3 per cent, said the European Statistical Office. USD "The housing market is moving toward more sustainable growth" - Barry Rutenberg, chairman of the National Association of Home Builder U.S. industrial output stagnated in January, after rising a revised 1 per cent in December, the Ministry of Economy, Trade and Industry reported on Wednesday. GBP "The U.K. labor-market data continue to paint a bit of a mixed picture, but the key point is that unemployment is still rising" ...

Fundamental Analysis EUR "... we doubt that the euro zone will be able to avoid further contraction" - Howard Archer, chief economist for IHS Global Insight Euro zone economy contracted less than expected in the last quarter of 2011 as France and Germany helped mitigate the recession. Gross domestic product fell 0.3 per cent, said the European Statistical Office. USD "The housing market is moving toward more sustainable growth" - Barry Rutenberg, chairman of the National Association of Home Builder U.S. industrial output stagnated in January, after rising a revised 1 per cent in December, the Ministry of Economy, Trade and Industry reported on Wednesday. GBP "The U.K. labor-market data continue to paint a bit of a mixed picture, but the key point is that unemployment is still rising" ...