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Euro Is Unlikely To ReboundTitle:
A dead cat bounce?
After a bunch of creepy economic figures starting from the euro zone manufacturing and services numbers which showed the sectors extended contraction last month and confidence among business within germany dropped to 106.9 from 109.4, that was followed by the GDP figure from the U.K which confirmed further contraction as the country’s economy contracted more than expected. While from the U.S; core durable goods orders dropped by 0.6% while markets were expecting a 1.1% expansion.
Although the overall picture remains clearly uncertain, however markets were well supported after being extensively oversold today, rebounding slightly this morning, and currently extending the recovery after the Greek central bank chief said that Greece’s four largest banks are to be recapitalized by an 18 ...
Title:
Risky trade getting hammered
Higher yielders remained under pressure as uncertainty continues to surround markets. The lack of assurance of an Imperative action on Greece from the euro leaders in their informal summit today makes things further vague for the destiny of the risky trade. While markets lack a conclusive expectation for the outcome of the summit majors look skeptical around key support levels.
During a teleconference earlier today, the Eurogroup Working Group (EWG); which consists of the officials preparing the meetings of finance minister, and form the board of the ESF as well, agreed that euro zone countries must consider and prepare for the consequences of a Greece exit. The move could have further negative impact on the common currency.
While Later today, the finance ministers are expected to unveil ...
Title:
Dukascopy Morning Forex Overview : 23/05/2012
Fundamental Analysis
EUR
"The rally is mostly technically driven after we became quite oversold last week."
- Raimund Saxinger, a fund manager at Trust Investment GmbH
European stocks rose by the most in a month on Tuesday. The Stoxx Europe 600 Index gained 1.91 per cent to 244.76. Germany’s DAX Index edged higher 1.65 per cent and France’s CAC 40 Index added 1.88 per cent. The U.K.’s FTSE 100 Index rose 1.86 per cent to 5,403.28
USD
"People are becoming more confident about job prospects and about taking on mortgages."
- Millan Mulraine, a senior U.S. strategist at TD Securities Inc.
U.S. existing home sales rose in April to an annual rate of 4.62 million from 4.47 million in March, said the National Association of Realtors.
GBP
"These figures give the Monetary Policy Committee ...
Title:
Asian stocks driven lower by downgrades in China, Japan ahead of EU summit
Ahead of a meeting of European leaders, the MSCI Asia Pacific Index dropped 1.5% at 12:31 in Tokyo after investors lost their appetite for risk after they were spooked by the mounting worries over Greece exiting the eurozone, while BoJ held its monetary policy unchanged although growth is slowing.
Greece’s former Prime Minister Lucas Papademos said yesterday that while it is unlikely that the nation will leave the eurozone, the risks are still high. And if this would prove to be the case, other countries may follow, warned Jin Liqun, chairman of China Investment Corp.
Meanwhile, one day after Fitch cut the Japan’s rating by one notch to A-plus from AA with negative outlook, citing “high and rising public debt” burden, Japan showed a slowdown in its exports during April, adding to ...
Title:
EUR/USD Rebound On Profit Taking
Sunrise Market Commentary
- Fixed Income: limited profit taking on core bond markets
- Global core bond markets fell prey to some profit taking in a thin, dull trading session. However, given the strength of equities, bond losses were very limited and occurred at the onset of trading. Today, the eco calendar remains thin and the profit taking might go some further in the run-up to tomorrow's informal EU Summit.
- Currencies EUR/USD rebound on profit taking
- The correction in EUR/USD was prolonged, but the euro gains were modest and mostly technical in nature. The UK inflation report is the eye-catcher of the day as it may influence sterling. However, overall trading might again be thin ahead of tomorrow's euro Summit.
The Sunrise Headlines
- US Equities rose for a second ...
Title:
Dukascopy Morning Forex Overview : 22/05/2012
Fundamental Analysis
EUR
"Inevitably there is going to be an element of bargain hunting as investors look to top up their holdings on the basis of slightly lower prices"
- Richard Hunter, head of equities at Hargreaves Lansdown Stockbrokers
European stocks edged higher on Monday on China’s pledge to boost growth.
USD
"Equity prices have gotten oversold"
- Mark Luschini, chief investment strategist for Janney Montgomery Scott LLC
U.S. equity market edged higher on Monday on China stimulus hopes and after German and French officials said they would cooperate to keep Greece in the monetary union.
GBP
"Obviously, as the euro depreciates, the U.K. gets slightly more expensive"
- Miles Shipside, Rightmove commercial director
U.K. national house prices stagnated in March, announced the ...
Title:
Greek Chaos Continues But Solution Ultimately Found
- While waiting for the Greek election on 17 June we are likely to see continued high uncertainty and continued high stress in the markets. Things are likely to get worse before they get better.
- Amid this uncertainty, Greek citizens are likely to withdraw more money from their banks and this could escalate into a real bank run.
- A major game of chicken has started between the EU on the one hand and Greek politicians on the other.
- The EU is likely to stand firm on its demands for Greece to deliver austerity and give only a few concessions. The rethoric from the left coalition party Syriza is likely to continue to be fiercely against the EU as it is aiming to become the biggest party and get 50 bonus mandates for this.
- We look at three different post-election scenarios. ...
Title:
Dukascopy Morning Forex Overview : 05/18/2012
Fundamental Analysis
EUR
"Spain, once again, is where the confidence game is played"
- Sebastian Paris Horvitz, strategist at HSBC Private Bank Suisse
Spain sold the maximum targeted amount of debt, 2.5 billion euros, during yesterday’s auction with spiking borrowing costs. The interest rate of three-year bonds rose to 4.373% from April’s figure of 2.89% while interest rate of five-year bonds surged to 5.106% from 3.374 in March.
USD
"What we’re seeing in foreign-exchange markets is strong demand for the U.S. dollar"
- Steven Saywell, head of foreign-exchange strategy for Europe at BNP Paribas SA
Latest US initial unemployment claim data was released yesterday – 370 000 Americans demanded their jobless benefits last week versus a 368 000 consensus forecast. The Labor Department revised ...
Title:
Holiday in Europe Keeps Trading Subdued
Forex News and Events:
While the news flow emanating from Europe has slowed, proving a temporary respite from risky assets, the pressure on Greek banks is growing. After market chatter and media reports, the ECB confirmed that some Greek banks had turned to the Bank of Greece for Emergency Liquidity Assistance (ELA) pending recapitalization. The recapitalization that was to be finalized 'soon', and in theory would allow troubled Greek banks to return to normal ECB funding channels. However, with the other story that massive deposits are being withdrawn from Greek banks (€700bn ins May 6th election) circulating, the erosion of core capital means the prospects of these institution quickly returning to ECB seem unlikely. The recent ECB 3 year LTRO operation was an attempt to build a firewall ...
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