Ecb's Action In December

Sunrise Market Commentary - Fixed Income ECB can't move global bonds - Global core bonds ended the session unchanged, as initial disappointment that the ECB wasn't more dovish dissipated fast. Today's payrolls are key and might decide whether the 6-week rally is over or has one more leg. Currencies: Major currency cross rates little changed ahead of the payrolls - EUR/USD gained temporarily during the ECB press conference as Draghi was less dovish than some in the market had expected. However, the move was technically insignificant as sentiment on risk remained fragile. Today, the payrolls are the key factor for (currency) trading. Investors might stay cautions on the euro to avoid this weekend's political event risk. The Sunrise Headlines - US Equities dropped for a ...

The kiwi took a hammering on the back of a huge surge in the NZ unemployment rate, with the rate blowing most estimates out of the water with the 6.7% print from a revised 6.4 %. Also, whist employment growth increased slightly more than expected at 0.4% q/q (exp. 0.3%) it is still a fairly soft showing, thus it highlights the problems facing the NZ labour market as the country attempts to regain its footing after the financial crisis and the earthquakes around Christchurch. There was also a significant jump in the participation rate as workers flooded back into the labour force, both those looking for work and people currently working. Overall, we expect conditions in the labour market will improve during 2012 as a result of reconstruction efforts and a generally improving economic ...

Weekly Economic and Financial Commentary U.S. Review Housing Indicators Pulled Back, but Don't Be Alarmed This week, the economic calendar was chock-full of housing market data. While housing indicators painted somewhat of a mixed picture, with nearly all housing market indicators unexpectedly declining on the month, we continue to see real improvement. That said, much of the pullback was due to the mild winter, which likely exacerbated the seasonal adjustment process. Housing starts unexpectedly fell 1.1 percent to a 698,000-unit pace in February. January starts, however, were upwardly revised to a 706,000-unit pace, the highest level since October 2008. Housing Indicators Pulled back, but Don't Be Alarmed This week the economic calendar was chock-full of housing market data. ...

The main focus today will be on U.K. unemployment data which is expected to show that the rate lingered at 8.4% in the three months ended January, while jobless claims for February are expected to rise to 7.8 thousands from 6.9 thousands a month earlier. In the last three months of 2011, the number of unemployed people reached 2.671 million, where the latest announcements by U.K. officials revealed that the slowdown in economic activities along with the rise in unemployment caused price pressure to ease. The latest growth forecasts by many elite British Federations lowered U.K. 2012 growth projections for the current year, citing the high risk posed from euro area debt crisis. The BoE, however, still expects a rebound in economic activities this year after the deceleration in the ...

(Reuters) - On December 8 last year, Mario Draghi sat down to chair his second policy meeting as European Central Bank president. Wearing the same understated, dark blue tie he had sported when he led the ECB to a surprise interest rate cut at his first meeting as president a month earlier, Europe's most powerful banker wanted to hear his colleagues' arguments on what action to take this time. The meeting, held on the 36th floor of the ECB's glass and steel Frankfurt headquarters, opened with recommendations from veteran policymaker and chief economist Juergen Stark, a German, according to two people present. Made in the Bundesbank's inflation-fighting mould, Stark felt the Council should wait to see how price pressures developed before moving again. Inflation was running at 3 percent, ...

The Weekly Bottom Line HIGHLIGHTS OF THE WEEK United States Stocks experienced a modest bout of volatility this week. The S&P500 declined 1.5% on Tuesday (the largest daily decline of 2012) only to rally and recoup the losses by the end of the week. Another important step was taken in the euro-zone this week when a Greek debt swap that will reduce the nation's debt burden by €100 billion received sufficient participation. While recent progress in the euro-zone is encouraging, Greece may still have to write down more debt in the future. Finally, the U.S. job market continues to hold its momentum. 227K new jobs were created in February, marking the third straight month of 200K+ job creation. Canada Canada shed 2,800 jobs in February, entirely erasing January's gain. ...

The Week Ahead Highlights Risk rally looks set to stall Central banks likely to wait and see How low can the yen go? Risk rally looks set to stall The rally in risky assets over the past several weeks has been well supported by better macro data along with an ample supply of liquidity and easy monetary policy from central banks (i.e. BoE QE, ECB 3-year LTRO's, BoJ inflation target and asset purchases, Fed low rate pledge and QE3 speculation, and PBoC RRR cuts). As a result, equities have advanced, the dollar has weakened, and high beta currencies have outperformed (NZD is up nearly +7.01% against the USD year-to-date). This past week risk was further supported heading into the ECB's second 3-yr LTRO operation in which the bank allotted €529.5B to 800 financial institutions. ...

The euro ended a roller coaster week sharply lower and may come under further selling pressure as Greece's bailout moves back into focus, and as the European Central Bank chimes in on monetary policy next week. The euro dropped against the dollar for a third straight day on Friday and was on track for its worst week since mid-December after debt-burdened Spain challenged the European Union's new fiscal pact. Spain, the euro zone's fourth-largest economy, set a softer 2012 deficit target than originally agreed to under the euro zone's austerity drive. Earlier in the global session, the euro was pressured by a surprise slide in retail sales in Germany, the euro zone's largest economy. However, the euro initially gave up ground on Wednesday after the European Central Bank offered 530 ...

(Reuters) - European stocks inched lower on Friday as a rally sparked by European Central Bank's huge cash injection loses steam, while Brent crude futures dropped as concerns of a supply disruption from Saudi Arabia abated. U.S. stock index futures pointed to a slightly lower open on Wall Street, with futures for the S&P 500, Dow Jones and Nasdaq 100 down 0.1-0.3 percent. The FTSEurofirst 300 .FTEU3 index was down 0.1 percent around midday, surrendering early gains after Spain Prime Minister Mariano Rajoy said the country will base its 2012 budget on a deficit target of 5.8 percent of gross domestic product, a softer goal than the official EU-agreed objective of 4.4 percent. "Stock indexes are losing speed, although it looks too early to start selling. Equities still have a 3 to 4 ...