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Eurozone Bond MarketsTitle:
EU Data Deteriorates
The euro remained under pressure against most of the majors after disappointing economic data and as the EU summit concluded without giving markets any indication of significant progress. European leaders debated the topic of eurobonds and whether or not it would contribute to growth. Germany remaining firmly opposed to the joint bonds saying that it would give countries with already large deficits incentive to continue to spend.
Economic data out of Europe added to the deterioration in sentiment as German, French, and Eurozone May PMI figures printed below expectations. Manufacturing PMI's in Germany, France, and the EZ fell to 44.4 (cons. 47.0), 45.0 (cons. 46.8), and 45.0 (cons. 46.0) respectively. The below 50 readings indicated ongoing contractions in manufacturing. Furthermore, ...
Title:
Markets vs. Technocrats
Forex News and Events:
Over the past few days, the media has been relaying comments suggesting leaders are backing the stay of Greece in the EMU. For starters the G8 stressed the importance for Greece to remain in the monetary union regardless of the discord over how to best tackle the crisis. During an interview with CNBC on Tuesday, former Greek PM insisted that an exit would yield “catastrophic” consequences for the country itself and “far reaching” implications for the EU. During yesterday’s European session however, EU officials stated they have agreed over a teleconference call with Eurogroup Work Group (EWG) that each nation in the EMU must prepare an individual contingency plan in case of an exit. The EUR sank against the USD to its lowest level since July 2010 at 1.2544, down 5. ...
Title:
Greek Exit Fears Weigh, Gold Bounces Epically
The euro (EUR) dropped to a 22-month low falling to 1.2545 from 1.2686 against the US dollar on a heightened risk aversion in the markets. Concerns that Greece may face a damaging default and a messy exit from the eurozone weighed on the single currency after talks said that Eurogroup was asked to prepare a Greek exit plan. Wednesday’s informal EU summit did little to restore sentiment in the market after it showed no progress on how EU leaders are planning to tackle the eurozone debt crisis but all agreed on the importance that Greece stays in the euro. France pushed a proposal of joint eurozone bonds, which can help with funding difficulties for some heavily-indebted eurozone countries but that policy is rejected by Germany.
The US dollar (USD) strengthened against a basket of ...
Title:
Gold hovers about $1,560 an ounce; Greece fear persists
(Reuters) - Gold hovered around $1,560 an ounce on Thursday, and remained on shaky ground as worries about Greece and the euro zone still dominated market sentiment after a European Union summit yielded few practical steps to manage the debt crisis.
FUNDAMENTALS
* Spot gold edged down 0.1 percent to $1,559.30 an ounce by 0049 GMT, after dropping to $1,533.41 in the previous session.
* U.S. gold gained 0.7 percent to $1,559.30.
* European Union leaders, advised by senior officials to prepare contingency plans in case Greece decides to quit the single currency, urged the country to stay the course on austerity and complete the reforms demanded under its bailout program.
* Spain announced a 9-billion-euro ($11 billion) bailout for troubled lender Bankia on Wednesday, while also seeking ...
Title:
Will Greece Leave or Not?
We have heard conflicting information about Greece over the last 24 hours: first we heard that Greece was making plans to leave the Eurozone from former Prime Minister Papademos, which was denied. Then this morning reports from a German newspaper suggested that the ECB had set up a task force (tucked away in a bunker) working on the potential fallout from a Greek exit. It's likely that we will get these conflicting headlines between now and the end of the EU summit, which starts this evening at 1800 BST.
The markets' seemed to like the idea of an Avengers - style ECB working to combat the negative effects if Athens goes to the wall, and the euro bounced from its lowest level since 2010 earlier. But the real test will be the outcome of today's summit. So what should we expect and, ...
Title:
Investors driven by rumors as they wait for concrete solutions
MORNING BRIEFING: Investors driven by rumors as they wait for concrete solutions
What’s new:
Equity: Asian and US equities down on fears of a Greek euro exit
JPY: Fitch downgrade Japan’s long term rating to “A+” with a negative outlook
Forex: USD/JPY lower after BoJ stated it would keep its interest rate unchanged and made no changes to its QE.
Forex: EUR/USD was sold-off in the US session after some rumors of a Greece’s contingency plan
Rates in Asia and Indices:
EUR/USD 1.2645 1.2689 -0.03 %
USD/CHF 0.9466 0.9498 -0.02 %
GBP/USD 1.5743 1.5772 -0.01 %
USD/JPY 79.45 80.08 0.50 %
EUR/CHF 1.2009 1.20135 0.02 %
EUR/JPY 100.61 101.48 0.54 %
Dow Jones 12447.33 12575.96 -0.01 %
Nasdaq 2524.11 ...
Title:
Japan Policy On Hold, Eyes On BoE Minutes
The euro (EUR) dropped near a 21-month low falling to 1.2645 from 1.2814 against the US dollar as risk aversion dominates the markets. Comments from former Greek Prime Minister Lucas Papademos raised concerns after he said that Greece has two options, stick to a painful austerity program or face a damaging default and a messy exit from the eurozone. Focus now turns to today’s informal EU summit where France is expected to push a proposal of joint eurozone bonds. The idea of joint bonds can help with funding difficulties for some heavily-indebted eurozone countries but that policy has been rejected by Germany before. EU leaders are also expected to focus more on growth and ways to help Greece stay in the euro.
The US dollar (USD) strengthened against a basket of currencies as fears of a ...
Title:
Shares up on Europe summit hopes, euro dips
(Reuters) - World shares gained for a second day on Tuesday amid speculation of fresh action by European leaders to tackle the region's debt crisis, even as the euro fell on doubts that much would come of this week's meeting.
A rise in existing home sales to their highest annual rate in nearly two years in April and a decline in foreclosures added to the positive tone in equity markets.
The National Association of Realtors said existing home sales increased 3.4 percent to an annual rate of 4.62 million units, the highest since May 2010. Across the U.S., the median price for a home resale jumped to $177,400 in April, up 10.1 percent from a year earlier.
"The housing market is showing some signs of life and the April number suggests that sales of single-family homes are rising again," ...
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 ...
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