Created Jobs In January

This is the key question for currency traders right now. The fundamental back-drop looks challenging for the euro. Although the Merkel/ Hollande rift seems overdone to us, Greece is the real problem. The leader of the New Democracy party announced late last night that he had failed to form a coalition government. The baton is now passed to the leader of the radical left wing Syrizia party, which now has three days to form a government. If this fails then another round of elections is on the cards for June. However, these elections could coincide with Greece running out of money, which makes them a much riskier prospect than the elections held last weekend. Election deadlock However, why has the euro not fallen through the floor? Back in 2010 the mere mention of the word bailout caused ...

The Weekly Bottom Line HIGHLIGHTS OF THE WEEK United States - U.S. job creation may have weakened in the last few months, but the grounds for sustaining stronger employment growth are more fertile now than have been since the economic recovery began. Europe's labor market, by contrast, is likely to deteriorate further before it gets better. - Europe's (nonfinancial) corporate sector is highly leveraged. As balance sheet adjustments are made, Europe risks further decreases in investment, higher layoffs, and lower economic growth. These effects are compounded by deleveraging in the public sector. - U.S. corporations, by contrast, are more profitable and liquid than they have ever been. At some point some of these funds will be unleashed towards new investment, creating a positive ...

The Week Ahead Highlights When will volatility pick up Digesting payrolls Will there be more QE for the UK? Data Watch When will volatility pick up? Volatility in US Treasuries is at its lowest level since 2007, so too is volatility in the FX options market for short-term EURUSD products and the Vix has fallen sharply since peaking in autumn 2011. Yet Europe's sovereign stresses remain as strong as ever, Spain and Italy are struggling to sell their sovereign debt to anyone bar their domestic banking sectors and election risks are enormous as Greece and France go to the polls on Sunday. So why is volatility so low? The answer lies with central banks and fairly tight FX ranges. When central banks come in and pledge that interest rates will remain extremely low until 2014, ...

(Reuters) - Gold prices edged back into positive territory on Friday after a report showed the U.S. economy added fewer jobs than expected last month, fuelling speculation the Federal Reserve may turn to further monetary easing to boost growth. The data, which is seen as a key gauge of the economic recovery, showed only 115,000 more jobs were created last month, against expectations for 170,000. The dollar, a key driver of gold prices, hit session lows after the numbers. Spot gold was up 0.1 percent at $1,637.71 an ounce at 1314 GMT, off an earlier low of $1,626.50. U.S. gold futures for June delivery were up $3.10 an ounce at $1,637.90. "The numbers were less than consensus, but beat some more bearish expectations," Societe Generale analyst Robin Bhar said. "The $64 million question ...

(Reuters) - Brent crude held above $118 a barrel on Friday, but prices were headed for their steepest weekly drop in more than three months as Spain's high borrowing cost kept intact fears that the euro zone debt crisis could flare up again. Disappointing U.S. jobs data, which added to recent evidence the global economy is on shaky ground, dented the outlook for oil demand, capping gains in oil prices. Investors are now awaiting next week's meeting of U.S. Federal Reserve policymakers that will be closely scrutinized for any hints of a third round of monetary easing by the world's top oil consumer, which could boost appetite for riskier assets including oil. Brent crude gained 40 cents to $118.40 a barrel by 0636 GMT, but was on track for its steepest weekly loss since mid-January. U.S. ...

The Weekly Bottom Line HIGHLIGHTS OF THE WEEK United States A narrowing trade deficit and larger than expected inventory accumulation in February suggests Q1 growth will be closer to 2.5-3.0% than our previous forecast for 1.7%. That being said, this does not change our underlying outlook. The higher print on GDP reflects an inventory swing and improved trade balance due to weak imports. In contrast, domestic demand still appears set to post a shallow 2% gain. In order for the U.S. economy to generate sustained growth at the 3% level, we will need to see a much healthier job market that is capable of generating widespread growth in real incomes. Canada In two survey releases, the Bank of Canada detailed that businesses are more upbeat about their sales' prospects and ...

(Reuters) - The number of Americans filing for jobless aid rose last week to the highest level since January, a development that could raise fears the labor market recovery was stalling after job creation slowed in March. Initial claims for state unemployment benefits increased 13,000 to a seasonally adjusted 380,000, the Labor Department said on Thursday, defying economists' expectations for a drop to 355,000. The four-week moving average for new claims, considered a better measure of labor market trends, rose 4,250 to 368,500. Some economists blamed the Easter holidays for the spike in claims and expected applications to trend lower in coming weeks. "It's very difficult to know the extent to which that's driven by seasonal effects from Easter or not," said Eric Green, chief economist ...

Although investors are getting more cautious ahead of the start of the earnings season and China’s slowdown forecasts, gains were seen across Asia as worries over Europe eased. The World Bank cut its estimate for China’s growth in 2012 to a 13-year low at 8.2% compared with January’s projections of 8.4%, as demand on exports is seen easing and domestic investment and consumption is seen decelerating. Yet the MSCI Asia Pacific Index advanced 0.3% at 13:20 in Tokyo, and commodities rose after Citigroup recommended buying industrial shares while jobs jumped in Australia and conservatives won the parliamentary elections in South Korea. More upside pressures were given by the eased fears over Europe’s debt crisis, after an ECB official suggested on Wednesday the bank may act to prevent the ...

Fundamental Analysis EUR Spanish banks are likely to need additional funds as economic state of the country has continued to deteriorate, announced Miguel Angel Fernandez Ordonez from bank of Spain. Spanish banks are facing next round of increase in bad loans as country enters the second wave of crisis in the last three years. Experts predict Spain to apply for a new bailout in the nearest future. USD US wholesalers outperformed their sale forecasts in February, as they tried to keep up with the growing demand. Wholesale inventories rose 0.9% - slightly higher than the 0.5% forecast. The Sales grew by 1.2%, unchanged from January. GBP Bank of England reported that recent monetary policy easing by the ECB is not expected to improve the labour market in the region. The rate of ...