Due To Europe's Severe

After China's premier called for additional efforts to support growth, Thailand's economy grew firmly in Q1 and world leaders urged Greece to stay in the euro zone, Asian stocks recovered some of last week's losses, the yen slid while commodities gained. The MSCI Asia Pacific Index added 0.5% at 12:56 in Tokyo as worries eased on believes China and Japan may take steps to support growth, while world leaders called for Europe to balance austerity with growth during the G-8 summit. China's Premier Wen Jiabao said over the weekend that his country must adopt a “proactive fiscal policy and a prudent monetary policy” to support growth, spurring speculations of additional stimulus since inflation is moderating. Meanwhile, Japan is expected to ease its monetary policies even more during BoJ's ...

Sunrise Market Commentary - Fixed Income Weak US payrolls push core bonds higher again - On Friday, it was weaker US payrolls that helped core bonds eke out more gains, but non-core bonds held up quite well. Spreads even narrowed in the intra-EMU bond markets. We fear that this won't be the case today, as French and Greek election results inject uncertainty into markets. - Currencies: Euro testing key support levels - On Friday, trading in the major euro cross rate was rather calm, but the pressure remained to the downside. The US payrolls were unable to change this pattern. This morning, EUR/USD is testing the key 1.2974 support while EUR/GBP is trading south of the 0.8068 level. A sustained break below these levels would raise a red alert for the single currency. The ...

(Reuters) - Fierce debate is growing in Europe over whether austerity or growth offers the best strategy to overcome the continent's sovereign debt crisis. As if it were that simple. As the euro zone hovers on the brink of its second recession in three years, the battle launched in academic journals, blogs and the financial press has spread to the hustings in France, Greece and soon in EU economic powerhouse Germany too. "Europe can't cut and grow," Sony Kapoor, head of the Re-Define think-tank, and Peter Bofinger, a member of the German Council of Economic Advisers, said in an article before European Union leaders adopted a budget discipline pact last month. "The EU needs a growth compact, not a fiscal one. Swift action on tax and jobs is the way out of the crisis." The growth camp ...

The Week Ahead Highlights Searching for the next crisis? What's driving the dollar? Europe: what happened to the LTRO? Searching for the next crisis A couple of weeks ago the market was able to shrug off the prospect of a Greek default and a sharply rising oil price. Even weak Chinese economic data didn't de-rail risky assets. However, that optimism didn't last long and last week investors removed the rose-tinted spectacles and started to worry once more about the outlook for the global economy. Last month China's growth rate was downgraded to 7.5% per year from 8%. Since China has a history of out-performing expectations this downgrade had little market impact. However, a fifth straight decline for the HSBC/ Markit manufacturing PMI survey reading and the markets are ...

(Reuters) - The Bank of Japan's closely watched tankan survey is expected to show major manufacturers were less pessimistic about business conditions in the three months to March and see a further improvement in the next quarter due to a weaker yen and signs of a pickup in the economy. The March tankan's sentiment index for big manufacturers is expected to rise 3 points to minus 1, which would still indicate pessimists outnumber optimists, according to a Reuters poll of 27 economists. The companies' forecast for the June index is expected to rise further to plus 2, reflecting their expectations for the economy's recovery. The tankan report will be released on April 2. "The tankan is likely to confirm the economy has escaped a soft patch," Ryutaro Kono, chief economist at BNP Paribas in ...

(Reuters) - Call it spring fever. For the third year in a row, optimism is spreading that growth in the United States could be poised to accelerate and drive the economy into sunnier pastures. Claims for first-time jobless benefits dipped to a four-year low last week as layoffs slow. Factory output is steadily expanding. Retail sales have picked up the past two months. And Europe no longer looms as an immediate threat since Greece restructured its debt and won more bailout money. Even a 9 percent surge in gasoline prices on tensions with Iran over its nuclear program has failed to take much shine off consumer confidence. The University of Michigan survey slipped by one point to 74.3 in early March, but views on current conditions edged upward. "For now it's a Goldilocks scenario -- ...

(Reuters) - The spending power of the American consumer is the secret sauce for turbo-charging a world economy that has entered an uncomfortable soft patch. China last week cut its growth outlook for 2012 to 7.5 percent from 8.0 percent, the weakest pace since 1990 and barely strong enough to keep its huge labor force employed. Brazil, which has been Latin America's powerhouse economy and heavily reliant on top trade partner China, is now struggling to revive growth after skirting recession last year. The central bank slashed its benchmark interest rate again last week to a nearly two-year low in a bid to stimulate growth. In Europe, Greece's successful completion of a debt swap that clears the path for a second round of bailout money allowed the country to avoid a chaotic default that ...

Fundamental Analysis EUR "The salvation of the country, remaining in the euro, means great sacrifices" - Evangelos Venizelos, Greek finance minister Greece’s government is preparing a final version of an agreement on budget and structural measures required for a 130 billion euro bailout, said a Greek government official. USD "Markets would love to see some certainty, and we don't have any of that at the moment" - Frank Lesh, a futures analyst and broker at FuturePath Trading LLC U.S. stocks rose on Tuesday as investors awaited the outcome of discussion on a financial aid package for Greece. GBP "After a stronger-than-expected December, these latest figures are rather sobering" - Helen Dickinson, head of retail at KPMG U.K. retail sector contracted in January as shoppers limited their ...

(Reuters) - Brent oil rose slightly on Tuesday and U.S. crude jumped more than 1.5 percent, bolstered by an unplanned outage at a Canadian oil sands plant and optimism about an agreement on Greece's debt problems. An Alberta plant that processes Canadian oil sands was expected to be shut for two or three weeks, adding lift for U.S. crude and helping narrow its deficit to Brent. Brent's premium to U.S. crude oil widened in early trade to more than $20 per barrel, its highest since October, before a brief but sharp reversal by Brent and a rally by the U.S. contract narrowed the spread back below $18 and left it at $17.82 based on settlements. "The spread got above $20 and it looks like some big players came in and pulled it back, then the dollar fell on expectations a Greece debt deal is ...