Contribution To The European Stability

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. ...

Sunrise Market Commentary Fixed Income: core bonds remain near contract highs Global core bonds reversed Tuesday's losses in a rather uneventful session. Today, all attention will go to the Spanish bond auction. A weak auction two weeks ago put pressure on Spanish yields since. The 10-yr yield flirts with the psychological 6% mark. In order to avoid more tensions, failure today is not an option. Currencies Sterling leaps higher on less dovish BoE Minutes While EUR/USD trading was rather uneventful, sterling was the star performer. Helped by less dovish BoE Minutes and a stronger labour market report, sterling shot higher pushing EUR/GBP below key support and GBP/USD above 1.60. The Sunrise Headlines US Equities dropped slightly lower on Wednesday, giving back part of ...

Forex News and Events: There continues to be a struggle between the EU (specifically Germany) and the IMF in regards to the size of the international organization's contribution. IMF Managing Director Christine Lagarde said on Saturday that she plans to recommend 18bn in financial aid for the second aid package for Greece. This is lower than the IMFs contribution to the first aid package of 30bn. This means that the EU will have to come up with 112bn through the European Financial Stability Facility (EFSF) which has a lending capacity of 440bn. The announcement suggests that the IMF has now sunk around 48bn in to Greece. While the commitment needs to be approved by the IMF executive board, there is growing evidence that members are becoming increasingly nervous about the organizations ...

The European common currency ended a strongly bearish week, where on Friday the euro cut all the gains recorded during the week and reversed sharply to the downside. Greece was able to strike an agreement with the private sector and now fears eased as the nation averted a catastrophic default late this month, the thing that encouraged finance ministers to pass the previously approved second financial aid to Greece. However, the International Swaps and Derivatives Association (ISDA) declared on Friday that Greece has triggered a “credit event” and now bondholders who hold credit default swaps (CDS) will be compensated by insurers with around $3.2 trillion, the thing that affected markets are prevented the euro from extending the gains. In addition, the U.S. jobs report strengthened the U. ...

Weekly Economic and Financial Commentary U.S. Review Nonfarm Payroll Report Continues to Show Progress The big headline for the week was the nonfarm payroll report which showed the labor market added 227,000 jobs in February with the unemployment rate unchanged at 8.3 percent. The private sector added 233,000 jobs with the largest gains in temporary help, manufacturing, education & health and leisure & hospitality. The real trade deficit of the United States widened in December to -$49.1 billion from -$48.3 billion. While much of the drop was due to an increase in petroleum prices, we expect trade to be a drag on first quarter economic growth. Positive Jobs Report Continues to Support Growth This week's economic indicators continued to signal a moderate pace of economic ...

(Reuters) - Greece averted the immediate threat of an uncontrolled default on Friday, winning strong acceptance from its private creditors for a bond swap deal which will eat into its mountainous public debt and clear the way for a new bailout. With euro zone ministers set to approve the 130 billion euro ($172 billion) rescue, French President Nicolas Sarkozy declared the Greek problem had been settled - just as Germany said that any impression the crisis was over "would be a big mistake." Markets sharply marked down the value of new Greek bonds to be issued to the creditors, reflecting the risk of paralysis after elections expected this spring and doubts about whether Athens can bring its debt to a more manageable level by 2020. Sarkozy, who is trailing his socialist challenger for the ...

Fundamental Analysis EUR European economy declined in the 4th quarter of 2011 as investment fell most since 2009 amid dropping consumer spending and exports. GDP both in Euro Zone and EU 27 area fell 0.3% compared to 3rd quarter said EU statistics office on Tuesday. Exports contracted 0.4% compared to a 1.4% gain in the 3rd quarter. Investment faded 0.7% and household spending diminished 0.4%. USD Several US leading banks attempt to persuade Fed to restrict the amount of information it discloses to public when it reports the outcome of recent stress tests. Federal Reserve is preparing to disclose more details than it did in 2009. The Clearing House Association said in a letter to Fed that unveiling extra information may have a negative effect on financial institutions involved in ...

Weekly Economic and Financial Commentary : 04/03/2012 U.S. Review A Better Tone to the Data but Growth Remains Sluggish The economic data clearly have a better feel to them but there is no evidence of a sudden break out to the upside. Fourth quarter real GDP was revised up to a 3.0 percent annual rate and inflation was also revised slightly higher. Personal income came in slightly below expectations but upward revisions to previously published data put the saving rate at 4.6 percent in January, well above the earlier reported level of 4.0 percent. Manufacturing data were mixed, with orders down but purchasing managers' surveys remaining strong. Lots of Good News but Still Only Modest Growth We received a full complement of economic reports this week, providing new intel ...

US dollar is getting a boost today as risk appetite fades. After ending last week lower, the US dollar is gaining today as risk aversion makes an appearance, thanks to the results of the G-20 meeting over the weekend. With delegates telling the eurozone to get its act together before approval for more IMF funds will be made, US dollar is higher as Forex traders look for stability. Over the weekend, G-20 delegates complained about the slow process of getting anything done in Europe. From the response to the Greek debt crisis, to the building of a ”firewall” designed to keep the contagion from spreading, European leaders have wrangled over everything. The whole process has been slow, and the G-20 essentially told the eurozone to get its house in order if it wants more contributions to the ...