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Euro Weighed By UncertaintyTitle:
European Market Update : 24/05/2012
Major European PMI Manufacturing data misses expectations; German IFO Business Confidence falls for the first time in 7 months
Economic Data
(RU) Russia Gold & Forex Reserve w/e May 18th: $514.3B v $518.8B prior
(DE) Germany Q1 Final GDP Q/Q: 0.5% v 0.5%e; Y/Y: 1.7% v 1.7%e; GDP WDA Y/Y: 1.2% v 1.2%e
(DE) Germany Q1 Private Consumption: 0.4% v 0.2%e; Government Spending: 0.2% v 0.3%e; Domestic Demand: -0.3% v 0.0%e; Capital Investment: -1.1% v -0.3%e; Construction Investment: -1.3% v -0.4%e; Exports: 1.7% v 0.9%e; Imports: 0.0% v 0.3%e
(CH) Swiss Apr Trade Balance (CHG): 1.3B v 1.9Be; Real Exports M/M: -0.9% v +0.2%e; Real Imports M/M: 2.6% v 5.9% prior
(FI) Finland Apr PPI M/M: -0.1% v +0.4% prior; Y/Y: 1.4% v 1.4% prior
(FI) Finland Apr Preliminary Retail Sales Volume Y/Y: -2.0% v ...
Title:
EUR/USD Cedes The 1.2624 Support
Sunrise Market Commentary
- Fixed Income: Risk off pushes German bond yields to new lows
- Risk off sentiment pushed core bonds higher and non-core bond yield spreads re-widened substantially. The Summit didn't bring new information, but another hole found in Spain's regions' budgets might get attention today.
- Currencies EUR/USD cedes the 1.2624 support
- On Wednesday, the EMU debt crisis was again omnipresent. Markets feared that the EU leaders wouldn't be able to take decisive action to address the debt crisis. Extreme risk aversion pushed EUR/USD to a new low for 2012. The losses of EUR/GBP were more contained, as poor UK retail sales and rather soft BoE minutes kept the door open for more policy stimulation.
The Sunrise Headlines
- In the final hour of trading, US ...
Title:
Oil falls on potential Iran deal, economy concerns
(Reuters) - Oil fell on Wednesday on growing hopes of a deal between Iran and the U.N. nuclear watchdog, which eased fears of oil supply disruption, while concerns over the debt crisis in the euro zone and a slowing Chinese economy weighed on demand.
The U.N.'s International Atomic Energy Agency expects to sign a deal with Iran soon to unblock investigations into suspected work on nuclear bombs in the oil-producing country.
This improved the prospects for talks with Tehran to stop a drift towards conflict.
Brent crude fell $1.39 to $107.02 per barrel. U.S. July crude fell $1.08 to $90.77.
Brent crude oil has fallen from a peak of $128.40 at the start of May and is down 12.9 percent this quarter, its biggest such drop since the fourth quarter of 2008.
Analysts said they believe there ...
Title:
Copper falls as dollar firms, debt crisis weighs
(Reuters) - Copper fell on Tuesday as the dollar firmed and uncertainty about Europe's ability to resolve its debt crisis outweighed reports that top metals consumer China will fast-track infrastructure investment.
Three-month copper on the London Metal Exchange touched a week-high of $7,816 a metric ton (1.1 ton) in the session, before erasing gains to $7,712 at 5:37 a.m. EDT (0937 GMT), down 0.2 percent from Monday's $7,731 close.
One of the price supports for copper on Tuesday was a report in the state-backed China Securities Journal that Beijing will fast track its approval of infrastructure investments to combat slowing growth and a sluggish property sector. Copper is used extensively in construction.
Premier Wen Jiabao has also called for additional efforts to support growth, ...
Title:
Asia Session: Europe, Europe And More Europe
Nervousness underpinned price action today. Despite voices from throughout Europe attempting to reassure the market that Greece will remain in the euro, stock markets in Asia didn't significantly build on their opening gains and the euro slowly drifted lower throughout the session.
Why is the market behaving like this? In one word – caution. Investors are acutely aware that the talk from Europe may just be that, and when push comes to shove nothing may happen. And, in this case that is a very bad thing considering the fate of so many economies (both in Europe and elsewhere) hang in the balance.
Whilst there are many different views, most economists agree that letting Greece slipe away may prove to be more costly than keeping it in the Eurozone. Thus, the market wants reassurances that ...
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:
Euro gets respite, but stays under pressure
(Reuters) - The euro traded firm above recent four-month low on Monday as some investors who had bet on the currency falling booked profits, but deep-seated concerns about financial turmoil in Greece and Spain will keep it under pressure.
The common currency earned respite from this month's relentless bout of selling, as speculators who had piled up a record amount of bets against it cut some of those positions.
The euro was steady at $1.2781, well above Friday's four-month low of $1.2642 struck on trading platform EBS. The euro has managed to stay above its 2012 low of $1.2624, a major support, a break of which would take the single currency back down to levels not seen since August 2010.
Traders cited sell-side stops above $1.2835 with plenty of offers ahead of that level, all of ...
Title:
Euro knocked by Greece worries, more losses likely
The euro fell to a four-month low against the dollar on Wednesday and risked more losses on the prospect of prolonged political instability in Greece that could result in the country exiting the euro.
With Greece announcing fresh elections next month and investors concerned about the knock-on effects of a Greek euro exit for economies like Spain and Italy, investors fled the euro and sought the perceived safety of the dollar and the yen.
The dollar rose to its highest in four months against a basket of currencies, while the euro also hit a three-month low versus the yen.
The euro dropped to $1.2681 against the dollar on EBS trading platform, which left it on track to test the January low of $1.2624, below which would mark the euro's lowest level since August 2010.
However, it recovered ...
Title:
Greece worries send euro to 4-month low vs. dollar
The euro fell to a four-month low against the dollar on Wednesday and was poised for more losses after Greece announced it would hold new elections, boosting the risk the country could exit the euro.
The prospect of prolonged political instability and worries about the knock-on effects of a Greek euro exit for struggling economies like Spain and Italy caused investors to flee the euro and seek the safety of the dollar and the yen.
The euro also hit a three-month low against the yen, while the dollar rose to its highest in four months against a basket of currencies.
"The uncertainty around the political situation in Greece continues to undermine risk appetite, which is affecting a range of currencies," said Paul Robson, currency strategist at RBS.
"There is uncertainty around the ...
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