Extending Gains Made

(Reuters) - World shares fell and Germany sold two-year bonds paying virtually no interest on Wednesday as investors shunned riskier assets, doubting that any new measures to tackle the euro zone debt crisis would emerge from a European leaders summit. Concerns the latest EU summit could be a failure sent the euro to a 21-month low, put an end to a rally in European equities, and sent yields on Spanish and Italian bonds higher. But investors bid strongly at an auction of safe-haven two-year German government bonds resulting in a yield of just 0.07 percent, while the dollar, measured against other major currencies .DXY hit a high not seen since September 2010. The leaders are expected to discuss boosting growth at their meeting later on Wednesday and the idea of a joint euro zone bond. ...

(Reuters) - Gold eased on Wednesday extending sharp losses made in the previous session as investors were skeptical that an informal European Union meeting later in the day would yield steps to help solve the region's debt crisis. Gold fell to as low as $1,555.03 an ounce earlier in the day, its lowest level in nearly a week, tracking a weaker euro as investors fretted about the possibility of a Greek exit and its implications for the global economy. Investors will be watching the outcome from the EU summit, but confidence is on the wane since Germany and France are likely to confront each other on the idea of mutualized European debt. "Can it solve the debt crisis? No," said Dick Poon, manager of precious metals at Heraeus in Hong Kong, "Everyone is worried about Greece withdrawing ...

(Reuters) - London copper futures fell on Wednesday, extending losses after hitting two-week lows near $8,000 a metric ton (1.1023 tons) in the previous session, weighed down by worries about the impact of political turmoil in Greece and the euro zone debt crisis. Greece was struggling to form a government several days after elections, raising the risk that a hard-won bailout could be nullified. A raft of Chinese data this week is also expected to keep investors cautious although figures are likely to show the economy of the world's top copper user has bottomed out as inflation slows and output picks up. Three-month copper on the London Metal Exchange fell 0.3 percent to $8,073.75 a tonne by 0413 GMT, after falling 1 percent on Tuesday. The most-active August copper contract on the ...

(Reuters) - Shares, precious metals and oil fell and the euro remained pressured on Wednesday as Greece struggled to form a government after an election that saw incumbent parties punished, heightening the risk that a hard-won bailout deal could be scrapped. MSCI's broadest index of Asia-Pacific shares outside Japan .MIAPJ0000PUS shed 1.4 percent to its lowest in more than three months, with energy .MIAPJEN00PUS, materials .MIAPJMT00PUS and growth sensitive industrials .MIAPJIN00PUS leading the declines. Resources-heavy Australian shares .AXJO plunged 1 percent to a three-week low as oil, precious metals and copper slid. European shares will likely edge up after a mauling on Tuesday, with financial spreadbetters predicting that major European markets .FTSE .FCHI .GDAXI would open 0.6 ...

Dollar Weaker ahead of FOMC USD softer against all of its major counterparts except for the British pound. Sentiment is improving today as global equities are broadly higher and yield spreads in Europe continue to ease. US Treasury yields are up with the 10-year yields approaching the pivotal 2.00% and the dollar index is lower as it remains below its daily cloud and Kijun line. Due out shortly at 0830ET are March durable goods orders which are expected to decline by -1.7% from the prior +2.2% on the headline print. The Federal Open Market Committee (FOMC) concludes its 2-day meeting today and with no change expected on policy, the focus will be on the bank’s updated projections and Chairman Bernanke’s press conference. With recent commentary from some of the more hawkish Fed officials ( ...

Sunrise Market Commentary - Fixed Income: the only way was up - Political tensions in the Netherlands and France in combination with weak PMI data set the tone for a risk off environment in which especially German bonds profited. The Bund set a new contract high and the German 10-yr yield set a minor record low (1.63%). The Dutch spread added 18 bps (78 bps) and is well underway to a the all time high (86 bps). - Currencies: EUR/USD showed only limited losses even as risky assets were sold - On Monday, EUR/USD ceded ground as negative political and economic headlines from Europe weighed on global market sentiment. However, investors were also cautious on the dollar ahead of tomorrow's Fed decision. Sterling was again an outperformer as EUR/GBP reached a new correction low. ...

(Reuters) - Gold prices slid below $1,630 an ounce on Monday as concerns that the euro zone debt crisis could ensnare higher-rated countries hurt the single currency, though moves were muted ahead of this week's Federal Reserve meeting. The metal is extending the 2 percent losses it has posted so far this month, in line with a drop in the euro. The currency has come under heavy pressure from growing fears over the ability of some euro zone countries, particularly Spain, to manage debt. Spot gold was down 0.7 percent at $1,629.69 an ounce at 7:53 a.m. EDT (1153 GMT), while gold futures for June delivery were down $11.80 an ounce at $1,630.90. "We are basically caught between two opposing factors," Credit Suisse analyst Tobias Merath said. "On the one hand, we have U.S. bond yields ...

(Reuters) - The yen fell broadly on Wednesday, extending its slip from a seven-week high against the dollar earlier this week, as a revival in risk appetite saw Wall Street score its biggest gains in a month. Upbeat earnings from U.S. companies such as Coca-Cola (KO.N), Spain's successful move to raise money in the debt market and an unexpectedly strong reading of German investor confidence all worked to boost market confidence. The dollar rose as high as 81.284 yen, pulling further away from Monday's trough of 80.29, while the euro rose to 106.55 yen, well off Monday's low around 104.62. The yen is coming under pressure ahead of Japan's trade data on Thursday, which is expected to show Tokyo's trade balance swung to deficit in March after a small surplus in February. Also hampering ...

FUNDAMENTAL OUTLOOK at 0800 GMT (EDT +0400) WORLD Asian equity markets slipped into negative territory overnight, helping set the scene for a modest dollar recovery after Monday’s weakness. The minutes from the RBA’s April 3 policy meeting sounded slightly more dovish than the policy statement itself, and more overtly signaled the possibility of a future rate cut – inflationary pressures permitting. Investor focus is likely to shift quickly back to Europe now, and to Eurozone bond markets in particular. Spain auctions bills today, but fears for Thursday’s bond auction have receded somewhat after Spain’s Tesoro announced its intention to issue a smaller-than-expected amount of only EUR1.5bn-2.5bn. Meanwhile the ECB’s Securities Markets Program has been dormant now for five consecutive ...