Enough To Convince Markets

(Reuters) - Brent crude dropped toward $113 on Friday as risk aversion grew because of Greece's debt crisis, sending prices down by more than 4 percent this week in the biggest drop since early May. The euro weakened, with markets still unconvinced that Greece could dodge a default even after appearing to secure a round of near-term funding. Brent crude for August tumbled 67 cents to $113.35 barrel by 1:45 a.m. EDT, while U.S. crude benchmark West Texas Intermediate retreated 70 cents to $94.25. "Everyone is fearful about the euro financial crisis, especially in Greece," said Ken Hasegawa, a commodity derivatives manager at Japan's Newedge brokerage. "We have seen some good and some bad data. We hope the euro will stabilize because it's very much correlated with crude." U.S. data over ...

FX Briefing Highlights Swiss franc rises against euro and US dollar Ifo signals that robust growth will continue ...but Greek crisis is escalating US growth hopes fade Doom Versus Gloom Despite starting the week on a weak footing, the euro managed for the most part to hold its ground this week. After falling below 1.40 at times on Monday, EUR-USD rebounded to around 1.4230 at the end of the week. As regards the major global currencies, however, investors seem increasingly unable to decide whether to choose doom or gloom. At any rate, both currencies lost a lot of ground, dropping to historical lows against the Swiss franc. USD-CHF fell to 0.8533, EUR-CHF slipped briefly to below 1.22. The New Zealand dollar was also stronger than usual. Against a backdrop of a better ...

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 ...

The world is undercollateralized. This is the single most important feature of the 2011 economy. Sixty years ago, if assets were worth less than loans, it was possible to work our way into the black. In 1950, 59% of US corporate profits were from manufacturing; 9% were from finance. The roles of manufacturing and finance have reversed. Thus, we witness the desperate attempts to forestall what cannot be prevented. Yet, the world must deleverage. Banks must write off loans. Loans to bankrupt developers and companies must be called. Living standards must fall. The authorities are doing all they can to prevent the necessary deleveraging. That is the context in which Michael A.J. Farrell, CEO of Annaly Capital Management (NYSE:NLY), spoke to investors during his company’s first quarter 2011 ...

(Reuters) - Portugal faces profound economic problems and must be bold if it is to tackle them successfully, the European Union and IMF said on Thursday as they confirmed a three-year, 78 billion euro bailout for Lisbon. The economic aid package will push Portugal into recession for the next two years, require a painful overhaul of labor markets and force the government to sell shares in state utilities, but Portugal's finance minister said it would also help overturn decades-old structural problems. "This programme's success will require a truly national effort," the EU and IMF said in a joint statement, saying it combined the need to stimulate long-term growth, reduce the deficit and restabilize Portugal's banking and finance sector. Germany, as the euro zone's largest economy, pays ...

(Reuters) - The European Central Bank will signal its readiness to raise interest rates when it meets on Thursday and may use its 'strong vigilance' code words to signal a rise as soon as June. The Frankfurt-based bank raised euro zone rates by a quarter of a percentage point to 1.25 percent last month, ending almost two years of record-low interest rates and beginning what economists expect to be a run of increases. Just when the next rise comes will be the key issue on Thursday, with attention focused on the wording ECB President Jean-Claude Trichet uses in the opening paragraph of his post-meeting statement. "We think it's June," said RBS economist Nick Matthews. "If we're correct in that, we would expect President Trichet to use the wording 'strong vigilance' on Thursday to signal ...

(Reuters) - Growing speculation about a Greek sovereign debt restructuring is raising tough questions about the sustainability of Ireland's debt, but Dublin still has time to convince investors that it won't be next in line. Some Greek politicians and German officials suggested last week that Athens might have to seek relief from private creditors. This pushed Irish bond yields to euro lifetime highs, since many investors fear a Greek restructuring could eventually be followed by similar action by Ireland and Portugal. But Ireland, which will not have to return to markets for funding until an 85 billion euro bailout by the European Union and the International Monetary Fund stops flowing in 2013, still looks as if it has a substantially better chance than Greece of avoiding a debt ...

As most investors eye Wednesday's monetary policy meeting by the US Federal Reserve, the possibility exists for the Fed to view the latest string of economic reports, particularly from the housing market, as a signal to release a hawkish assessment of the American economy. Consumer confidence has also risen lately and traders appear to be anticipating an uptick by the greenback against its Atlantic rival this week. Economic News USD - USD Hesitant Prior to Week's Fed Meeting The US dollar has found itself in a position to rebound strongly in the days ahead if this week's policy meeting by the Federal Reserve produces a hawkish assessment. Most reports released at the end of last week had begun to call for a fast-paced injection of trading volume, deemed almost certainly to go towards ...

Brent crude oil futures fell below $120 on Tuesday for the first time in two weeks, pressured by concern over the economic outlook and the risk that high prices could erode demand. By 1318 GMT, Brent crude was trading $2.20 lower at $119.41 a barrel. U.S. crude for May, which expires later on Tuesday, fell $1.16 to $105.96. Expectations that Greece would be forced to restructure its debt added to a bleak economic picture on Tuesday, a day after ratings agency S&P cut its outlook for U.S. credit. "There's still a few worries in Europe, yesterday's downgrading of the U.S. didn't really help and I think we're going to have to look at tomorrow's energy figures to give us a bit more impetus," said Rob Montefusco at Sucden Financial. "Events in the Middle East seem to be shoring up. We've ...