Dollar And Simply A Fear

The dollar and the yen were lower across the board as Chinese Premier Wen spurred hopes of more growth stimulating measures from Beijing. At the same time, equity markets were lifted by the risk-on sentiment, but gains were limited by lingering fears about a possible Greek exit from the euro. Furthermore, the G8 summit over the weekend failed to provide any guidance for investors, with those in attendance simply repeating well used comments about keeping the Eurozone intact and ensuring Greece doesn’t fall off a cliff. It now appears the countries in attendance are renewing calls for the larger and healthier Eurozone nations, like Germany, to assist their struggling neighbour countries, which comes at a time when debt markets appear to be questioning the health of Italy and Spain. Yet, ...

Fears of a Greek exit from the euro zone worsening the debt crisis facing other European nations gripped financial markets on Wednesday, sending shares and other riskier assets lower as investors shifted funds into safe havens like the U.S. dollar. The euro touched a fresh four-month low of $1.2883, Spanish and Italian bond yields rose, while the FTSE Eurofirst .FTEU3 index of top European shares hit its lowest level for the year at 983.95 points, down over 1 percent. The probability of Greece leaving the 17-member currency bloc increased markedly after political leaders in Athens failed to form a government on Tuesday, forcing another round of elections. Opinion polls show this is likely to be won by leftist parties opposed to the country's bailout deal. (nL5E8GG0S1). In response, ...

Sunrise Market Commentary - Fixed Income: Global core bonds profit from euro debt crisis - Concerns about Greece and Spain underpinned the ongoing rally of global core bonds. The German 10-year yield fell below 1.50%. Intra-EMU yield spreads versus Germany widened substantially. Today, the eco calendar is enticing. If no euro debt crisis news acts as a circuit breaker, the eco data may for once drive the price action. - Currencies: Speculation on Grexit continues to hammer the euro. - At the start of the new trading week, the Greek crisis remained the key factor for currency trading. With no visibility on the outcome of the EMU crisis, the easiest way for the euro is south. EUR/USD set a new correction low. EUR/GBP dropped below the 0.8000. This morning, strong German ...

Fundamental News Today's highlight; - Interest Rate Decision. (AUD, 5:30, GMT) - RBA Rate Statement. (AUD, 5:30, GMT) - ISM Manufacturing Index. (USD, 15:00, GMT) - Unemployment Rate. (NZD, 23:45, GMT) The EUR/USD is trading at 1.3233 having retraced Friday’s gains, at the close of the European session down 0.2%, but still trading above 1.32. European bond yields are generally stable and EUR volatility is trading near its lows at 8.4. News flow has generally been negative, with Spain entering a recession (GDP came in at ‐0.3% in Q1), S&P downgrading 11 banks and the March central bank data revealing a lack of foreign demand for Spanish debt. As expected, S&P has downgraded 11 Spanish banks and put a further 6 on watch; while taking the opposite tact, Moody’s has announced that ...

The Japanese yen gained this week against other major currencies and headed to the biggest monthly gain since June against the US dollar on fears of the crisis in Europe and concerns that the health of the US economy is not as good as was previously considered. The yen behaved in similar pattern against different currencies. It was rising on Monday, fell and erased most of its gains in the next two days, but surged in the last two days of the week. The major threat for the yen was the expansion of the asset purchase program by the Bank of Japan. Yet the expansion was smaller than market participants expected and its impact quickly waned. Demand for the safety of Japan’s currency was simply too high. And why not? The downgrade of Spain’s credit rating, the slowing economic growth of the ...

April Fears Ahead of Fed, Spain & China Forced Liquidation or Improved Sentiment? Recent intermittent bounces in EURUSD in the face of surging Eurozone spreads are said to be reflecting possible liquidation by European banks unloading US assets to relieve an ensuing shortage of US dollars. Other explanations were attributed to the IMF buying Irish and Portuguese bailout tranches during the late European trading hours, taking advantage of cheaper levels (lowest since Feb 15). But as long as traders find no confidence in battling the coordinated efforts of asset-buying central banks and the Fed produces no new dissenters to the ultra low rates til 2014 mantra, risk currencies may be assured to find support. Spanish government bonds are now the latest victim of bond traders typical one- ...

Extreme strain in the global economy has given way to something less hair-raising. So does the last investor in "safe-haven" gold, switch out the lights? After a storming start to 2012, bullion prices have lost some of their luster in recent weeks in line with a reassessment of global economic health. Jumbo-sized liquidity taps are off in Europe, while the jury is out on a further round of U.S. quantitative easing. U.S. data shows a slightly improved trajectory, with employment numbers and consumer credit growth highlighted in a key year for President Barack Obama. Treasury yields reflected that, breaking out of the doldrums and raising potential for tighter policy down the road. Given that backdrop it is no surprise that gold has retraced since touching a record $1,920.30 an ounce in ...

FUNDAMENTAL OUTLOOK at 0800 GMT (EDT +0400) WORLD Ranges were broadly flat overnight but the dollar has checked some of its advance amid fears that data is still not strong enough in theUSfor the Fed to continue allowing the market to price out expectations for monetary easing. On Friday theUniversityofMichiganconsumer sentiment index slipped to 74.3 in early March from 75.3 in February; industrial production was unchanged m/m in February; and the y/y reading for core consumer prices slowed to 2.2% in February from 2.3% in January. Yet, this should not mask the positive momentum in theUSeconomy, as theUniversityofMichiganreport included key improvements in labour market assessments, while manufacturing production was up 0.3% m/m in February. Moreover, at a 1.9% annual rate in the past ...

FUNDAMENTAL OUTLOOK at 0800 GMT (EDT +0400) WORLD Currency markets were mostly indecisive during the Asia session despite the brief episode of dollar buying when Richmond Fed President Lacker explained why he dissented again at Tuesday’s FOMC. Even before this, Lacker had revealed his preference for a rate hike in 2013, but this time the FX reaction was more apparent. We see this as a sign that Fed policymaking has overtaken Greece-related issues, and now occupies centre stage in the minds of investors. As a result, the behaviour of US yields seems likely to become an increasingly important driver of FX markets. Oil continues to exert a secondary influence. Newswires reported that discussions are underway to release crude from the strategic oil reserves of developed economies, but that ...