Europe Looks Pretty

(Reuters) - Brent crude dropped more than $3 on Monday to below $106 a barrel, while U.S. oil fell more than a dollar to below $82, on the potential for a resumption of exports from OPEC-member Libya as a six-month civil war there appeared close to an end. A bleak global economic outlook has also dampened prices, analysts said. Libya pumped around 1.6 million barrels per day (bpd), nearly 2 percent of global supply, before the war cut output. Most of Libya's high-quality crude flowed to European refiners, and tightening supply after Libyan exports stopped drove Brent to a two-year high of $127.02 in April. Brent crude dropped $3.47 to $105.15 per barrel at 3:31 a.m. EDT. U.S. crude fell 24 cents to $82.02 a barrel after dropping to as low as $81.13 earlier. The front-month September U.S. ...

Weekly Economic and Financial Commentary U.S. Review The Economy Continues to Lose Momentum In July, industrial production rose a solid 0.9 percent, but reports from the New York and Philadelphia Federal Reserve banks showed activity falling off in early August. Home sales and new home construction also appear to be losing momentum. Sales of existing homes fell 3.5 percent in July, while housing starts fell 1.5 percent. Mortgage applications for home purchases also declined, despite the recent drop in mortgage rates. Inflation is still running a little hotter than the Fed would like, with the CPI rising 0.5 percent in August and the “core” CPI rising 0.2 percent (1.8 percent y-o-y). Timing Is Everything Most of the hard data we received this week, including reports on ...

(Reuters) - Brent crude fell toward $106 on Friday, extending the previous session's plunge after weak economic data added to expectations the world would head back into recession and oil demand could shrink. Brent was trading at $106.09 a barrel by 5:49 a.m. EDT, off a session low of $105.06. A day earlier, it fell by about three percent. U.S. crude sank $2.04 to $80.34 a barrel, up from a low for the day of $79.17. "This short-term downturn is not done yet. It could take WTI (U.S. crude) to as low as $75. The fundamental picture is not that bad, but if the overall economy remains weak it is very hard to make a case for a bull run in oil," said Tony Nunan, a risk manager with Mitsubishi Corporation in Japan. "What could turn the situation around is if OPEC tightens supply. The ...

(Reuters) - U.S. Treasury prices soared on Thursday and benchmark 10-year note yields fell below 2 percent for the first time as global economic fears sent investors scrambling for safe-haven government debt. U.S. bond buying intensified after data showed that factory activity in the Mid-Atlantic region plummeted in August while sales of U.S. existing homes unexpectedly dropped in July. Rising fears about the ability of European policymakers to contain the region's debt crisis, which threatens to further derail economic recovery in Europe, earlier had driven a bid for U.S. Treasury debt. The latest U.S. data added to concerns that the United States will head back into recession at the same time as the country's rising debt load and record deficit leaves the government and the Federal ...

(Reuters) - American consumers, faced with grim job prospects and the looming threat of a national debt default, are in no position to support the global economy with a new wave of spending. That bodes poorly for rather rosy forecasts for U.S. economic growth in the second half of the year from many Wall Street economists and top Federal Reserve officials. One ray of hope for the global expansion is a surprisingly rapid industrial rebound in Japan following the devastating earthquake and tsunami earlier this year. Output in the industrial sector bounced 6.2 percent in May and a report on Thursday is expected to show it surged another 4.5 percent in June, according to a Reuters poll. But stateside, the figures give little cause for optimism. The U.S. Commerce Department is slated to ...

Forex News and Events: Today FX traders will have their sights squarely on events in Greece. Currency markets were relatively quiet, with marginal USD selling dominating activity. Optimism has been growing as a short term solution to the Greece debt crisis looks to be near (debt rollover agreement and vote on austerity) and leading to a broad revival in risk appetite. EURUSD witnessed a strong two day risk rally / short squeeze, pushing up to the 1.4400 border with marginal spread to the EURCHF, which climbed to 1.1959, perhaps illustrating the markets lingering fears. Watching the news last night as wide spread violent protests paralyzed Athens, it’s hard to see a parliamentary vote providing anything but a short-term solution. Interestingly, the originally May 2nd 2010 EU / IMF €110bn ...

Forex News and Events: Last night’s announcement of an agreement between the Greek government, EU and IMF on future austerity measures has managed to halt the spiralling decline in risk assets seen yesterday, and we have witnessed an encouraging recovery in most equity indices as well as EURUSD. However, this agreement should only be seen as required first step (this package still needs to be voted on by Greece’s parliament), and while it has come as a welcome short-term respite to strained markets, it seems there is still a long way to go before policy makers can throw together a decisive and viable solution to the long-term problem of Greece’s debt. As such, we remain cautious of getting carried away in bullish momentum, and instead view this rebound as an opportunity to re-load short ...

(Reuters) - Investors reacted with caution on Thursday to a relatively downbeat outlook from the U.S. Federal Reserve, sending world stocks lower and boosting the dollar in a search for safety. Europe's debt crisis added to the mood, with a summit of European leaders beginning later in the day due to focus on the Greek bailout. On the economic front, Germany's manufacturing growth eased in June. The Fed said on Wednesday that while longer-term the U.S. economy should pick up, it was taking longer than predicted. "The economic recovery is continuing at a moderate pace, though somewhat more slowly than (we) had expected," it said. Financial markets responded by shifting away from riskier assets. World stocks as measured by MSCI .MIWD00000PUS were down 0.6 percent, barely in positive ...

NEW YORK, June 16 (IFR) - Greece's precarious financial position has dealt a blow to the love affair US investors have had this year with European bank issuers in the investment grade dollar market. Borrowers from across the continent and the UK are watching their spreads gap out well beyond their Financial Institutional Group (FIG) comparables in the US, regardless of whether they have Greek exposure or not. Issuers are shelving deals until a window of opportunity opens as bankers tell them they'd be struggling to get enough demand for even a $1bn offering. "There are definitely issuers who are looking at the market that ultimately may decide to stand down," said Dan Mead, managing director and head of FIG syndicate at Bank of America Merrill Lynch. While higher quality European banks ...