Currency Strategist At Lloyds

(Reuters) - The U.S. dollar climbed to a 20-month high and safe-haven German bonds set record low yields, after data showed Europe's economic woes intensifying as business confidence is undercut by talk of a Greek exit and slow progress in tackling the debt crisis. Private-sector factory activity in China also faltered in May as demand for exports fell, in a worrying sign the impact of the euro zone crisis could be undermining the global economic recovery. Europe is China's largest export market. But U.S. stock index futures have edged higher as investors remain hopeful that pending data on durable goods orders and initial jobless claims will show the world's largest economy is staying on track for recovery. The slowdown in economic activity in Europe's powerhouse Germany sent the euro ...

Fundamental Analysis EUR "The overall manufacturing trend remains weak." - Pierre-Olivier Beffy, chief economist at Exane BNP Paribas French industrial production fell in March, said the national statistics office Insee on Thursday. Output contracted 0.9 per cent from February, when it gained 0.2 per cent. USD "It’s hard to get nervous that imports are rising." - Dean Maki, chief U.S. economist at Barclays Capital Inc. The number of Americans claiming for unemployment benefits fell to 367,000 in the week ended May 5 from 368,000 the week before, said the Department of Labor on Thursday. GBP "Our forecast is that they are done with QE, but you can’t rule out more later this year." - Ross Walker, an economist at Royal Bank of Scotland Group Plc The Bank of England kept rates on hold ...

Fundamental Analysis EUR "The real concern isn’t about Greece, it’s about the euro and whether it breaks up -- that is key." - Mark Tinker, a fund manager at AXA Framlington Investment EUR Management European stocks declined on Wednesday as investors awaited resolution of Greek coalition talks and yields on Spanish 10-year bonds rose above 6 per cent. USD "Certainly as a result of the elections in Greece, the odds of a default and an exit from the euro have increased." - James Dunigan, chief investment officer for PNC Wealth Management U.S. wholesale inventories rose in March at a slowest pace since November, Commerce Department data showed on Wednesday. GBP "Consumers, struggling to balance their household budgets, remain reluctant to spend..." - Stephen Robertson, BRC director ...

Fundamental Analysis EUR "The U.S. labor-market report will further erode investor confidence" - Markus Allenspach, head of bond research at Julius Baer Group Ltd. European stocks extended weekly losses, after a report showed U.S. companies added fewer jobs than expected in April. The Stoxx Europe 600 Index erased 1.76 per cent to 253.00. Germany’s DAX Index tumbled 1.99 per cent and France’s CAC 40 Index contracted 1.90 per cent. The U.K.’s FTSE 100 Index lost 1.93 per cent to 5,655.06. USD "We’re still very much on the recovery path, but we’ve got a huge amount of ground to make up in the labor market" - Scott Brown, chief economist at Raymond James & Associates Inc. The number of Americans, who have found a job in the private sector in April, tumbled to 115,000 from 154,000 the ...

Fundamental Analysis EUR "The likelihood of inflation falling below 2 percent in the short run remains low, putting the ECB in a difficult situation." - Peter Vanden Houte, an economist at ING Inflation in the euro zone rose by more than expected in April, mounting pressure on the European Central Bank to take action against price pressures. USD "Manufacturing is still in pretty good shape." - Scott Brown, chief economist at Raymond James & Associates Inc. Manufacturing in the U.S. expanded in April at the fastest pace in 10 months, showed Institute for Supply Management data on Tuesday. GBP "The good news is that manufacturing clocked up a fifth straight rise, whilst cost pressures have eased a little and some firms are still recruiting." - Lee Hopley, chief economist at EEF U.K. ...

Fundamental Analysis EUR Anti-austerity protestors are likely to hold massive demonstrations in May Day. Demonstrations in Athens that involve private and public sector strikes have already disrupted the public transport. However, the traditional violence is not expected as Greeks are likely to show their protest against austerity measures on Sunday when the general elections are due. USD Crude and Brent oil dropped as lifted US energy inventories outweighed supply concerns caused by export disruptions in Yemen, Sudan and North Sea. GBP Manufacturing sector in the UK performed worse than initially expected in April, reported research group Markit. UK's manufacturing PMI declined to 50.5 last month on a seasonally adjusted basis as compared to a March reading of 52.1. Experts ...

Fundamental Analysis EUR "There’s a bit of risk back on after some positive company numbers helped stocks and improved the tone of the markets" - Eric Wand, a fixed-income strategist at Lloyds Banking Group Plc Demand for Spanish and Italian debt rose, pushing Spanish and Italian bonds higher, as investors turned to higher-yielding assets after companies from Apple to Swedbank reported better than forecast earnings. USD "The committee expects economic growth to remain moderate over coming quarters and then to pick up gradually" - Federal Open Market Committee U.S. durable goods orders tumbled below forecast in March, a sign the manufacturing sector may be losing momentum. Bookings for long lasting goods dropped 4.2 percent, said the Commerce Department on Wednesday. GBP " could be ...

Fundamental Analysis EUR German DAX index fell on Wednesday after Spain reported its proportion of non-performing loans versus total lending rallied to 7.91% January, the highest figure since 1994 raising doubts about nation's ability prevent debt turmoil. USD The IMF expects the overall economic growth to accelerate this year as the Euro Zone started to show signs of recovery after severe debt crisis. Moreover, US economic performance also improved. The IMF predicted the global economy to grow by 3.5% in 2012 as compared to the previous expectation for a 3.3% expansion. GBP Despite unexpected drop in nation's unemployment, Brtish FTSE 100 index traded modestly lower on Wednesday weighed down by banking stocks as Adam Posen, policy maker at the Bank of England ended his support for ...

Fundamental Analysis EUR The 17-nation currency depreciated versus its US counterpart and Japanese currency ahead of Spanish debt sale on Tuesday. The Euro shed 0.2% versus US Dollar to USD 1.3110 and gave up also 0.2% against Yen to JPY 105.42. Currently EUR/USD is trading at USD 1.3110 and EUR/JPY is trading at JPY 105.41. USD China has raised its US debt holding for the second consecutive month as country's foreign exchange portion continued to advance. China purchased 12.7 billion US dollars of the US Treasuries in February thus boosting the debt holding to 1,178.9 billion US Dollars, according to the US Treasury Department. Chinese foreign exchange reserves gained 3.9% in Q1 on an annual basis. GBP FTSE 100 index rallied on Tuesday as Spanish successfully auctioned bonds and US ...