Euro Is Likely To Enjoy

FUNDAMENTAL OUTLOOK at 0800 GMT (EDT +0400) The full G20 summit kicks off in Cannes today with the situation in Greece firmly in the minds of all participants. Before the gathering the Eurozone is to hold yet another summit (though dubbed ‘mini-summit’) amid the search for further clarity with regard to the situation with the referendum. It is clear that the Eurozone leadership is has accepted the vote but are fully framing it in the context of whether Greece wants to remain in the Eurozone; if the answer is in the negative then the Eurozone leadership will look to contain the fallout, and key officials are now openly contemplating the possibility. Much will depend on how the referendum is phrased, though Greek President Papandreou would need to get past a confidence vote first, ...

Forex News and Events: Trading remains dominated by random headline reports making FX trading volatile and prone to sudden reversals. The selloff in risk correlated trades has been driven primarily by heavy barrage of warnings that expectations for a grand solution at this weekend summit were overdone. In addition there is mounting reports that even if policy makers wanted to make a deal they lack the integration to execute a grand solution. Media outlets are reporting that the fund being made available to recapitalize banks could end up being less the €100bn and legal issues might stop having the EFSF directly guarantee sovereign debt. In addition, as rumor that emergence talks between French President Sarkozy, German Chancellor Merkel and the heads of the IMF and ECB have stalled. ...

The Weekly Bottom Line : 14/10/2011 HIGHLIGHTS OF THE WEEK United States Markets continued to rally this week, with the S&P 500 gaining more than 5%. While encouraging, the index remains down about 3.5% on the year. The growing appetite for risk among investors stems from some policy action in Europe, diminished recessionary fears in the U.S., and signs that the Fed is ready to inject more stimulus if the economy weakens. However, the risks to the economic outlook remain largely unchanged from a few weeks ago. While the market's recent rally is encouraging, volatility is sure to remain elevated in the weeks and months ahead. Canada This week's Canadian data helped underscore our view that the Canadian economy would bounce back modestly from the small contraction ...

Weekly Economic and Financial Commentary : 07/10/2011 U.S. Review Still Growing, but the Expansion Is Still at Risk The U.S. economy created 103,000 net new jobs in September with the private sector creating 137,000 net jobs, a pretty decent indication that modest economic growth continued in the United States in September. While still in the plus column and somewhat better than August's job reading, the labor market has clearly downshifted from the first quarter, putting the sustainability of the economic expansion at risk. The ISM manufacturing and non-manufacturing indexes both signaled modest expansion in September as well, although August factory orders declined. Slow and Steady Growth Continues Expectations are now so low for the U.S. economy's performance that the ...

Have we told you where we think the US and other developed countries are headed? No? Well, things won’t necessarily be so bad. In a few words: the lust for MORE will become a lust for BETTER. Yes, the age of easy growth is over. You probably won’t make any money buying stocks. And your house will never return to the levels of ’05-’06. And oh yes…you may not be able to get a job. But that’s the good news. We’ll deal with the bad news some other day. Today, we’re going to stick with this good news. People in the developed countries are going to stop thinking so much about GDP, which measures the gross amount of economic activity. Instead, they will be thinking about the quality of it. They’ll switch from thinking about their standard of living, measured in dollars or pounds or euros, and ...

The Weekly Bottom Line: 01/10/2011 HIGHLIGHTS OF THE WEEK United States Germany ratified the terms of the second Greek bailout package on Thursday. That may have bought Europe more time, but the reality is Greece will need to default. A redefinition of the euro area would be ugly for everyone, most of all Greece. Given the social and economic consequences of such an outcome, it is likely that European politicians would opt for some sort of fiscal transfer union among the zone's member states. Whatever the outcome in Europe, the U.S. won't be immune from the fallout. But the country will have a better chance of holding onto market confidence if it continues working towards a credible plan for medium-term deficit reduction while avoiding a premature tightening of the public ...

Not much market movement yesterday. Dow basically flat. Gold rose $30. Gold investors don’t seem to be able to decide. Is the economy good for gold…or bad? Here’s our opinion: This is a good time to own gold. But it won’t seem like a good time. Not now. Because the Great Correction just gets worse and worse. And as the correction bites the economy, the dollar goes up against almost everything. “Gold is not going down,” says David Rosenberg. But we’re not so sure. Gold investors bought gold to protect themselves against the dollar. But in the short and medium term, they won’t need protection against the dollar. They’ll need protection against everything else! They’re likely to be disappointed with gold and drop it as this period of de-leveraging drags on. Yesterday, we promised to ...

The outlook is still getting dimmer for the global economy and especially for Europe with central banks turning dovish and thinktanks revising their outlook to the downside assuring the tough times ahead! Last week ended again on a soft tone, with the BoE maintaining their steady stance and the ECB shifting dovish. The United States attempted to calm markets with Obama presenting a new proposal to stimulate jobs growth and Bernanke assuring the Fed will stipulate new means to support the economy in the coming meeting; nevertheless, they actions combined only confirmed the slowing recovery. With the pessimism predominant, investors expect another tough week for the European continent where heavy downbeat data from the United Kingdom are on the queue for release and more debt debate is ...

A darkening euro zone economic outlook, a shrinking interest rate advantage and skepticism over European authorities' ability to resolve the sovereign debt crisis have raised the risk the euro will fall toward $1.30 before year-end. The single currency has already broken below $1.40 -- a level around which sovereign demand has been clustered -- and plumbed a six-month low around $1.3790 on Friday after the European Central Bank on Thursday signaled a halt to its policy tightening. A near 5 percent fall in the euro against the dollar in the 10 days reflects investor concern over the stability of fiscally weak euro zone countries, including Greece and Italy, which in turn has shaken confidence in the region's banking system. Greg Anderson, an FX strategist at Citi in New York, saw more ...