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All Eyes on BoE
Forex News and Events:
Bank of England stands to make a crucial decision today as turmoil hinders most of its peer Euro Zone economies. UK’s GDP contracted in the last quarter of 2011 by a revised 0.3%, and inflation remained higher than the 2% average target set by the BoE. During the last weeks, economic data in services and manufacturing were mainly affected by rising petroleum prices and austerity budget cuts biting deep into consumer / household spending. But MPC member Adam Posen, hitherto a fervent supporter of QE stated: “My own personal view is that I think the economy is stronger than what data is going to show”. The central bank last increased its asset purchase program target by 18% in February to GBP325bn as the money supply gauge M4 dipped heavily, suggesting a tightening of ...
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Risk Recovery Looks Fragile
It's one step forward and two steps back for risk at the moment. On the one hand we heard yesterday that Greece was 'more than likely' to receive its next aid tranche in order to cover a bond redemption due later this month, yet the political deadlock from Sunday's election is now entering its fourth day. The chances are that Greece will have to go back to the polls next month (at the cost of about EU 18mn) and the financial markets are concerned that the electorate will choose an anti-austerity party as its first choice.
The choice is up to the Greeks
However, Greece may not like austerity, but it also wants to remain in the Eurozone. EU officials, particularly in Germany, have broken the taboo that no one can leave the Eurozone and started to publically announce that Greece has to ...
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Fragile euro holds above multi-month lows
(Reuters) - The euro edged away from a 3 1/2-month low against the dollar on Thursday as stress in Spanish debt markets abated slightly and after Greece secured funds needed for bond repayments, tempering the threat of a Greek insolvency and possible euro exit.
Greece averted an imminent funding crisis after the board of the European Financial Stability Facility agreed to a scheduled 5.2 billion euro ($6.72 billion) payment. However, impatient governments withheld part of the latest tranche of rescue funds to be paid to Greece on Thursday.
Ten-year Spanish government bond yields fell after Spain's government effectively took over Bankia, one of the country's biggest banks, in a bid to restore confidence in Spain's ailing banking system.
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Oil eases further on weak Chinese data
(Reuters) - Oil fell to around $113 per barrel on Thursday, pressured by weaker-than-expected Chinese trade data highlighting concerns over energy demand in the world's second-largest oil consumer.
Brent crude has fallen sharply from highs around $126 per barrel in April due to worries about political turmoil in Europe and a growing conviction that the market is well-supplied.
And while a five-day negative run ended on Wednesday, analysts remained downbeat about prospects for oil.
Brent crude oil futures for June lost 20 cents to $113.00 a barrel by 0855 GMT, after settling at $113.20 on Wednesday, up 47 cents. U.S. crude slipped 35 cents to $96.46.
"Brent seems to be bottoming out since it has not hit the Monday low again," said Carsten Fritsch, oil analyst at Commerzbank. "The ...
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A Mixed Session For Investors In Asia
Attention was momentarily drawn away from Europe by employment data out of Australia and then trade figures out of China, with the former printing better than expected and the latter disappointing the market. Following the data, price action was fairly range bound in the FX market as investors await the slew of news and data out of the UK and US tonight.
In Australia, data released early in the session showed that the unemployment rate dropped to 4.9% from 5.2% and employment increased by 15.5K, much better than the expected increase in the unemployment rate to 5.3% and a drop in employment of 5K. The participation rate also cooled at little, coming in at 65.2% versus a prior 65.4%.
Overall, the employment data bodes well for the health of the Australian economy this year. We were ...
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Global shares pressured by weak China data, Europe jitters
(Reuters) - Asian shares struggled on Thursday, as a weak Chinese trade data stoked fears of a growth slowdown and further undermined risk appetite already reduced by worries about the health of Spanish banks and deepening political chaos in Greece.
European shares will likely open mixed, with financial spreadbetters predicting that major European markets .FTSE .FCHI .GDAXI would open between a 0.3 percent rise and a 0.4 percent fall. U.S. stock futures were up 0.2 percent. .EU .L .N
MSCI's broadest index of Asia-Pacific shares outside Japan .MIAPJ0000PUS, which has declined for the past five days, last stood nearly flat after bouncing between positive and negative territory. During the session it fell as much as 0.3 percent to its lowest in nearly four months and briefly rose as much as ...
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Brent drops below $113 after China trade data
(Reuters) - Brent crude slipped below $113 on Thursday, after weaker-than-expected Chinese trade data that raised concerns over energy demand at the world's second-largest oil consumer.
Government data showed China's exports and imports in April grew at a far slower rate than forecast.
Prices were also pressured by signs of rising U.S. crude inventories, although this was tempered by falling refined fuel stocks at the world's top oil consumer.
"The weak Chinese data is putting more pressure on oil. With demand for oil looking bleak and rising inventories, I don't expect crude oil prices to rebound any time soon," said Miguel Audencial, a trader with CMC Markets in Sydney.
Brent crude lost 55 cents to $112.65 a barrel by 23:40 EDT (0340 GMT), after settling at $113.20 on Wednesday, up ...
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Euro wallows near 3 1/2-month low on Greek deadlock
(Reuters) - The euro wallowed near a 3 1/2-month low against the dollar on Thursday as political deadlock in Greece threatens its rescue deal and raises the spectre of the country risking insolvency and leaving the euro zone.
Worries that the euro zone could plunge back into a debt crisis, after a semblance of stability in the past few months, were also supporting the yen near a three-month high.
"Uncertainty over Greece is going to weigh on markets," said Sumino Kamei, senior currency analyst at the Bank of Tokyo-Mitsubishi UFJ.
"There's now open talk about Greece's exit from the euro. The euro is likely to have moved into a new range below $1.30."
The euro fell as low as $1.29115 on Wednesday, the lowest since Jan 23.
It last stood at $1.2947, with next possible support seen around $ ...
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Wall Street falls on Europe, but late buying trims losses
Stocks ended lower on Tuesday after political developments in Greece fanned concerns about Europe's fiscal health, but a late rally helped indexes cut losses to close well above lows.
Stocks spent most of the session sharply lower, with selling following declines in European markets. Fears that Greece will reject an existing international bailout and potentially leave the euro prompted the selling across markets.
The S&P 500 fell through support at 1,350 to reach levels not seen since early March, but buyers emerged to support stocks.
"A lot of people have been looking at 1,350 as the short-term correction level, a level that the buy-the-dip crowd was hoping to get. This doesn't mean the market is not focusing on Europe," said James Dailey, who manages $215 million at TEAM Financial ...
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