Enough Negativity From Europe

Crude continues the sharp downside wave extending the losses for another consecutive session, where it retreated yesterday after attempting to move slightly higher to reach the lowest levels this year after the failure of Greek parties to form a coalition government and new elections will take place in June. Crude oil opened today’s session at $93.11 and declined sharply to reach so far a low of $91.79 after it recorded a high of $93.41, where it is currently trading around $92.26 a barrel. The commodity is facing strong downside pressure after Greek parties said yesterday that they haven’t reach an agreement to form a coalition government and new elections will likely be held in June, which raised fears again over Greece’s membership in the euro bloc. Despite the bullish effect from U. ...

Crude oil continued in its biggest decline this year amid high uncertainty in Europe due to elections in several countries, and signs of a weakening recovery in the world’s biggest oil consumer. Also, the world leaders led by Saudi oil minister try to push crude prices downwards as it is much expensive than it should be. By assembling many factors together, a very strong downside pressure has been formed on crude, after it declined last week below $100 level on a bad U.S. jobs report which triggered fears over its weak recovery pace and a high uncertainty in Europe with a new French president and dark outlook for Greece. However, the downside pressure on crude has intensified after a failure in Greece’s parliamentary vote for a new coalition government, which called fears back to cover ...

The New Zealand dollar climbed today, reaching the all-time high versus the euro, after positive employment data from the United States bolstered risk appetite among Forex traders, making them prefer higher-yielding currencies. US employment data overshadowed the problems of Europe for a day and provided a major boost for currencies tied to growth. The United States has its share of problems, but traders prefer to look at a brighter side of things in the USA as they have enough negativity from Europe. That may change in a time, but for now positive indicators and low interest rates make a good economic environment for riskier assets. Commodity and stocks markets also reacted very positively to the US jobs growth, adding to appeal of the New Zealand currency. The Thomson Reuters/Jefferies ...

Fundamental Analysis EUR "ECB action is required but it cannot do the whole job on its own" - Thomas Mirow, president of the EBR The European Central Bank may lose credibility if it will conduct large scale intervention in the bond market, said European Central Bank President Mario Draghi on Friday. USD "The economy looks to be getting better despite the continued drumbeat of negativity in financial markets" - Joseph LaVorgna, chief economist at Deutsche Bank Securities Inc. The composite index of U.S. leading indicators rose more than expected in October, said the Conference Board Inc. on Friday. GBP "Markets are still troubled by the idea of contagion from the debt crisis to the rest of the world" - Morten Kongshaug, chief equity strategist at Danske Bank A/S U.K. stocks dropped ...

Forex News and Events: What a difference a bit of hard work can make. We should hope that European policymakers learn from this experience that “kicking the can down the road” is not as an effective method as addressing problems head on. FX markets were in full risk-on mode, with EURUSD clearing the 200 day ma and settling comfortable above 1.4100. USD on the other hand is currently bearing the brunt of the euphoric risk appetite. AUDUSD was one the big gainers, climbing nearly 3.50% to 1.0753, but has since lost ground in Asian sessions. Global equities indices got a boost of adrenal for the announcement, as the S&P 500 closed up 3.4%, and the CAC 40 up 6.00% and the DAX finished over 5.00% higher. The optimism has carried over to Asia with the Hang Seng up 2.01% and Shanghai 1.32%. ...

FUNDAMENTAL OUTLOOK at 0800 GMT (EDT +0400) USD All eyes will be back on the Eurozone today as the leaders of the European Union hold their second summit in the space of a week in search of a comprehensive solution to the Eurozone debt crisis. However, pre-summit nerves are showing as Tuesday’s headline flow was hardly reassuring for those in search of a positive outcome. German lawmakers initially disputed the inclusion of language in the final draft calling for more secondary bond purchases by the ECB. Shortly afterwards, newswires reported that Wednesday’s meeting of EU Finance Ministers had been unexpectedly cancelled, which triggered a brief selloff of the euro and risk assets more generally. The announcement came without any explanation, and investors naturally assumed the worst. ...

With yesterday's inflationary data out of Britain, it seems the pessimism in Europe isn't trickling across the English Channel, at least for now. Holiday spending and recent upticks in manufacturing should shore up the pound's advances this month. Economic News USD - Dollar Trading Sideways as Optimism Dominates Trading The US dollar (USD) was seen trading mildly bullish Tuesday as investors weighed the impact of recent PPI and investment reports from the American economy. A sudden wave of risk appetite last week seemed to have pushed down on the USD, but pessimism emerging early this week held back some of those losses. Data on inflation and investment yesterday also signaled a mild uptick in outlook from the previous month. The news has had some impact on the forex market, though it ...

The Japanese yen (JPY) was pushed back yesterday, as the Bank of Japan (BOJ) unveiled a new fund of approximately $100 billion in order to curb the rising strength of the island currency. With Wednesday's move by the BOJ, the future of the yen's strength is as yet undetermined, but will likely adopt a bearish overture in the next few days. Economic News USD - USD Moderately Lower as EUR Bounces The US dollar (USD) was seen trading moderately lower at yesterday's close after a day of mixed news from the global economy. Weak gains seen on the USD this week was offset yesterday after the stock rebounds led to minor returns of portfolio diversification. So far, this action has pushed investors back into the value of the euro (EUR), sapping safe-haven appeal from the greenback for the time ...

The Week Ahead Highlights Markets consolidate before The End of the World Greek problems get worse before they get better? The euro hinges on Spain Japan's economy still in a 'very severe' state The Loonie may see weakness ahead Key data and events to watch next week Markets consolidate before The End of the World This past week saw most major asset markets and currencies essentially consolidate around recent lows following the sell-off in the first half of May. Incoming data, however, continues to suggest increasing sluggishness in the major economies. In the US, housing data weakened further, both the Philadelphia and Empire manufacturing indexes declined, industrial production flattened, and the index of leading indicators dropped for the first time in 10 ...