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(Reuters) - The now familiar European cycle of crisis followed by political action, temporary respite, then another crisis enters that crucial second stage next week when leaders of the 27-member European Union seek solutions in Brussels. Investors will also be concerned with how hard the crisis is hitting the euro economy, with flash estimates of business activity due from the latest purchasing managers' surveys, and with the view from Bank of Japan policymakers meeting in Tokyo. The potential for a Greek euro exit and the deteriorating health of the Spanish banking system have fueled a growing sense among investors that the crisis in the 17-member currency bloc is nearing new heights. "This whole European situation has been managed via crisis," said Didier Saint-Georges, a member of ...

The now familiar European cycle of crisis followed by political action, temporary respite, then another crisis enters that crucial second stage next week when leaders of the 27-member European Union seek solutions in Brussels. Investors will also be concerned with how hard the crisis is hitting the euro economy, with flash estimates of business activity due from the latest purchasing managers' surveys, and with the view from Bank of Japan policymakers meeting in Tokyo. The potential for a Greek euro exit and the deteriorating health of the Spanish banking system have fueled a growing sense among investors that the crisis in the 17-member currency bloc is nearing new heights. "This whole European situation has been managed via crisis," said Didier Saint-Georges, a member of the ...

Confidence is already in short supply in financial markets and could evaporate further in the coming week if investors judge that Europe's often fractious political leaders aren't mapping out a sustainable path through the current crisis. Over the past week investors have been rocked by the increased likelihood of Greece leaving the euro, and an admission by one of the world's more highly regarded banks, JPMorgan Chase (JPM.N), of an embarrassing failure in risk management. Many in the markets are now looking to Europe's political leaders to signal a shift in the German-led austerity drive across Europe which they now see as threatening the fragile recovery underway in the world economy if cuts are not tempered with some efforts to encourage growth. Credit rating agency Fitch put the ...

Euro area manufacturing deterioration and unemployment rise raise concerns of facing a deepening recession Euro zone data manufacturing data add to worries that euro area may be heading to a severe recession after today's report had showed contraction for the ninth month with the beginning of the second quarter. PMI manufacturing showed widening contraction to 45.9 in April from 47.7 in March, where the reading in Germany came in at 46.2 from a previous of 48.4 and in Italy it retreated to 43.8 last from 47.9 in March. Before the release of the final PMI services reading this week, the advanced reading released last week showed a contraction of 47.9 from 49.2 in March. Meanwhile, there are worries the euro area would continue contracting in the first quarter to experience a ...

Another week is starting with mounting tensions in markets ahead as uncertainty prevails amid recession concerns, financial woes and political conflict in the euro area. This week, investors will continue to focus on the latest developments in the European debt crisis on hopes to find any signs of recovery. Regarding fundamentals, the spotlight will be on the euro area's main sectors, manufacturing and services, to track their development with the beginning of the second quarter. The final readings of PMI manufacturing and services are expected to remain unrevised, where last week the manufacturing sector showed a widening contraction to 46.0 in April from 47.7 and services also showed a contraction of 47.9 from 49.2 in March. Accordingly, PMI composite slipped to 47.4 from a prior of ...

(Reuters) - Caught in a vice between sluggish global growth and worldwide debt deleveraging, investors face another week of potentially gloomy economic news with no relief in sight from the growing concerns about euro zone debt. The focus will be mainly on the European Central Bank's monthly policy meeting, the U.S. non-farm payrolls report and data on the outlook for the world's manufacturing sector, which still represents 20 percent of the global economy. But these events are not expected to offer much diversion from the steadily worsening crisis in the euro zone, which is driving demand for safe haven assets. "It's about capital preservation from an investor point of view," said Richard Batty, global investment strategist at Standard Life Investments, which has $240.7 billion of ...

Still, concerns are spreading in markets with mounting speculations Spain and Italy would eventually ask for an international bailout as they will be unable to improve their fiscal stance. After bailouts provided to Greece, Portugal and Ireland, it seems that the debt dilemma is intensifying as the contagion spread to large euro area economies which probably caused euro area members to expand the European permanent rescue fund and global economies to raise funds to combat the lingering effects of the crisis. Worries sparked after the rise in Spanish 10-year bond yield above 6% at the beginning and the end of the week, as this level is close to 7% which forced euro area peripheral nations to ask for international aid, despite the ECB intervention through buying Spanish debt. Spanish ...

(Reuters) - The euro zone crisis is flaring up and debt auctions by safe-haven Germany and current bad boy Spain in the coming week will provide a gauge how far investor sentiment has changed since the shock and awe of recent ECB liquidity injections has worn thin. Protecting the world economy from the euro area's debt crisis will top the agenda at the International Monetary Fund spring meeting in Washington at the end of the week, just as quarterly U.S. corporate earnings begin to reflect some improvements coming through in economic activity. Eyes will also be on the outcome of the first round of the French presidential election on April 22, and March data on the health of U.S. retail sales and industrial production. But it is the debt markets that are expected to hold the key to ...

Concerns are still predominate despite upbeat announcements from euro area officials, eyes to track Italian bond selling Despite the efforts done by European officials to ease the debt crisis, it seems that a lot of reforms from the euro area's highly indebted nations are needed to pass to the safe side. Still, there are worries in markets after the rise in Spanish 10-year bond yields to 6 percent yesterday, coming close to levels which forced Greece, Portugal and Ireland to ask for international bailouts. Later in the day, investors will focus on Italian bond selling of three-year notes after yesterday's auction showed a sharp rise in borrowing cost. Italy sold 11 billion euros of bills on Wednesday, where the government borrowed 8 billion euros from the 361-day bonds with a surge in ...