Focus Of Greek Response

- 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. ...

Equities and risky FX bounce after G8 commitment to Greece and China hints of easing Economic Data (JP) JAPAN MAR ALL INDUSTRY ACTIVITY INDEX M/M: -0.3% V -0.1%E (3rd consecutive decline) (NZ) NEW ZEALAND APR NET MIGRATION: -850 V 230 PRIOR (NZ) NEW ZEALAND APR CREDIT CARD SPENDING M/M: 0.2% V 0.4% PRIOR; Y/Y: 3.7% V 5.3% PRIOR (TH) THAILAND Q1 GDP Q/Q: 11.0% V 10.0%E; Y/Y: +0.3% V -0.5%E (UK) UK MAY RIGHTMOVE HOUSE PRICE M/M: 0.0% V 2.9% PRIOR (4-month low); Y/Y: 2.0% V 3.4% PRIOR Markets Snapshot (as of 04:30GMT) Nikkei225 +0.7% S&P/ASX +0.3% Kospi +0.9% Shanghai Composite +0.2% Hang Seng -0.1% Jun S&P Futures +0.5% at 1,297 June gold +0.4% at $1,599/oz June Crude +0.5% at $91.90 Overview/Top Headlines Asian equity markets, commodities, and risk-on FX opened the new week ...

The euro edged higher against the dollar on Friday but hovered near a 3-1/2-month low as political uncertainty in Greece and hefty losses unveiled by U.S. bank JPMorgan Chase kept investors wary of placing bets in favor of the currency. The euro rose for a second day after falling for eight straight sessions, with investors squarely focused on Greece, where inconclusive election results last Sunday threw the country into political disarray and raised the risk of it exiting the euro zone. "The recent decline in the euro/dollar is clearly a direct response to the decline in global equity markets," said Gareth Sylvester, senior currency strategist at Klarity FX in San Francisco. "These declines have been driven by the shifting political landscape in Europe, most notably in Greece and ...

The euro hovered near a 3-1/2-month low on Friday as Greek political parties made efforts to form a coalition government, and looked fragile as risk sentiment struggled on weak Chinese data and JPMorgan's shock trading losses. The common currency was steady at $1.2936 after earlier hitting a trough of $1.2905, its lowest level since January 23. Investors were heavily focused on Greece, where inconclusive election results on Sunday threw the country into political disarray and raised the risk of it exiting the euro zone. The euro climbed to a session high of $1.2956 as Greek conservative leader Antonis Samaras said there were still hopes a government could be formed, but came further pressure when the leader of the moderate Democratic Left said the country was heading for a repeat poll. ...

(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 ...

Sunrise Market Commentary - Fixed Income Weak US payrolls push core bonds higher again - On Friday, it was weaker US payrolls that helped core bonds eke out more gains, but non-core bonds held up quite well. Spreads even narrowed in the intra-EMU bond markets. We fear that this won't be the case today, as French and Greek election results inject uncertainty into markets. - Currencies: Euro testing key support levels - On Friday, trading in the major euro cross rate was rather calm, but the pressure remained to the downside. The US payrolls were unable to change this pattern. This morning, EUR/USD is testing the key 1.2974 support while EUR/GBP is trading south of the 0.8068 level. A sustained break below these levels would raise a red alert for the single currency. The ...

(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 ...

FUNDAMENTAL OUTLOOK at 0800 GMT (EDT +0400) WORLD Those hoping for less dovish commentary from Fed Chair Bernanke were mostly disappointed. Although he acknowledged the recent “genuine improvement” in the labour market, he again emphasised that the situation is still “far from normal”. What hurt the dollar most was Bernanke’s view that “continued accommodative policies” could help boost employment. This is a marvelously vague remark and open to interpretation. While it does not endorse the market’s recent decision to price in a rate hike as soon as in late 2013, it does not rule it out either. Furthermore, as our US economists point out, “continued” accommodation does not mean additional accommodation. As such, Bernanke was non-committal about the possible need for further asset ...

FUNDAMENTAL OUTLOOK at 0800 GMT (EDT +0400) WORLD Broad USD strength amid the post-FOMC rise in US Tresury yields remains the dominant theme. While USDJPY broke above 84 in the Asia session, EURUSD is threatening to slip through 1.30. Although Japanese bonds were under pressure, USDJPY was driven by the widening 2y UST-JGB yield spread on expectations of a Fed-BoJ policy divergence. USDJPY still has upside risk, with the Fed backing away from more QE and BoJ boasting plenty of room to expand, amend, and extend its Asset Purchase Programme (APP) as early as next month – perhaps in conjunction with the release of its Outlook Report on April 27. Repatriation flows are not yet prominent in the run-up to the March 31 book closing in Japan. MoF data released earlier today confirmed that ...