Effect On The Stoked Markets

(Reuters) - Brent crude edged lower towards $119 per barrel on Monday as economic woes in developed economies stoked fears of lower fuel demand, although the prospect of a third round of monetary easing by the United States limited its decline. Economic growth cooled in the first quarter, raising expectations that the Federal Reserve could start a third round of government bond buying, or quantitative easing known in markets as QE3, to support the economy. Such a move would increase market liquidity and heighten risk appetite for commodities. Brent June crude was down 22 cents to $119.61 per barrel by 12:37 a.m. EDT (0437) GMT after gaining nearly 1 percent last week. U.S. June crude was at $104.80 per barrel, down 13 cents. Trading in Asia is likely to be subdued, with Japan and China ...

(Reuters) - Brent crude oil futures gave back most early gains on Wednesday, as weak U.S. economic data stoked fresh oil demand worries. Brent rose in early trade bouncing back from a recent price slump, as investors grew less worried about the euro zone on news of strong investor demand for Spanish bonds. But despite solid demand for the bonds, investors remained skeptical about Spain's fiscal outlook. Crude futures fell after economic data showed jobless claims dipped less than expected, while existing home sales fell unexpectedly and mid-Atlantic factory activity slipped. "The jobless claims numbers as well as housing sales data were not supportive, adding to yesterday's bearish data on the U.S. crude stock build," said Kyle Cooper, managing partner at IAF Advisors in ...

(Reuters) - Asian shares and the euro fell on Tuesday, as surging Spanish borrowing costs underscored the fading impact of the European Central Bank's bond purchases and stoked investor nervousness over euro zone debt woes, sapping their risk appetite. Oil and the Australian dollar slipped while a firmer dollar dented appetite for safe-haven gold, which eased 0.3 percent to fall below a key technical level of $1,650 an ounce. Spanish 10-year government bond yields rose above 6 percent on Monday for the first time since the beginning of December, fuelling concerns that Madrid could fail to meet deficit targets as the country acknowledged it has probably tipped into its second recession since 2009. That would raise the risk of the euro zone's fourth largest economy being pushed into ...

The scale of money printing in the West has become so massive that the world may fall prey to "monetary anarchy," with traces of bubbles appearing everywhere. At least that's what some critics see in the latest round of cash pumping by major central banks. It is also an eerily reminiscent of 2011, when similarly generous monetary easing sparked higher oil prices, slowed the recovery and stoked speculative hot money flows into vulnerable emerging markets. The European Central Bank alone is expected to lend another half trillion euros or more of super-cheap money to banks on Wednesday, following Japan and Britain which have already injected fresh cash. The Federal Reserve has promised to keep interest rates low until 2014 and act further if needed. There is a sense of deja-vu in ...

(Reuters) - Bond investors are showing no immediate worries about a resurgence in inflation, even though the Federal Reserve is thought to be close to adopting an official target for price growth as soon as next week. Though 10-year inflation expectations have risen 0.4 percentage point since last September, this is primarily seen as a recovery to normal levels after becoming depressed last year during the euro zone government debt crisis. Now the market sees a 10-year inflation rate of 2.1 percent, based on the difference in yields on Treasury Inflation Protected Securities and conventional U.S. government debt, which is a key gauge of expectations monitored by the Fed. That spread, called the breakeven inflation rate, is in line with the 2 percent rate markets have for some time seen ...

(Reuters) - The Bank of Japan kept monetary settings unchanged on Wednesday but offered a bleaker view on the economy than last month on mounting evidence of the pain Europe's debt crisis is inflicting on global growth and Japan's recovery prospects. Slowing exports, worsening business sentiment and soft capital spending are challenging the central bank's view that the world's third-largest economy will recover early next year. In a sign of the growing damage from the global slowdown, Japan's exports fell at their fastest annual pace in six months in November with shipments to Asia declining on weak demand for semiconductor chips and digital cameras. The BOJ held off on offering additional monetary stimulus, as widely expected, but cut its economic assessment to say that the pickup in ...

(Reuters) - The dollar fell sharply on Wednesday as a move by major central banks to cut the cost of much-needed liquidity for the global financial system and upbeat U.S. economic data drove investors to currencies with higher returns. The announcement by central banks of developed economies that they were acting to prevent a credit crunch fueled the market's appetite for risk, lifting currencies such as the Australian, New Zealand and Canadian dollars and the euro. In a joint statement on Wednesday, the U.S. Federal Reserve, the European Central Bank and the central banks of Canada, Britain, Japan and Switzerland said they had agreed to cut the cost of existing dollar swap lines by 50 basis points from December 5, in order to ensure that banks outside the United States have easy access ...

We reached the middle of the week, where markets will be anticipating pending data on labor conditions due before the U.S session opening bill, having the ADP employment change for October, while also on the focus today, the Federal Open Market Committee will announce the rate decision later in the session. If truth to be told, the members of the Federal Open Market Committee meet for the seventh time this year in order to determine the near-term direction of monetary policy and whether short-term borrowing costs should be changed to sustain its objectives of stronger growth and stable inflation. The meeting will be capped at 12:30 in New York time today, where the benchmark interest rate decision will be announced, probably unchanged at 0.25 percent according to median estimates, with ...

Gold steadied on Wednesday in choppy trade, retreating from highs after U.S. stocks opened lower, with investors still wary of buying into the precious metal after its recent heightened price volatility. Spot gold was down 0.2 percent at $1,616.60 an ounce at 1346 GMT, off a high of $1,633.29. It earlier fell as low as $1,596.75, extending losses it posted on Tuesday as investors sold the metal to cover losses on other markets as shares slid. European stocks rebounded on Wednesday, with banking equities surging on news that European finance ministers are exploring ways to recapitalize the ailing sector amid growing expectation of a Greek debt default. "Less pressure on other, riskier assets like stock markets means there is also less pressure to sell gold holdings to compensate for ...