Gains Were Widespread

(Reuters) - The U.S. dollar climbed to a 20-month high and safe-haven German bonds set record low yields, after data showed Europe's economic woes intensifying as business confidence is undercut by talk of a Greek exit and slow progress in tackling the debt crisis. Private-sector factory activity in China also faltered in May as demand for exports fell, in a worrying sign the impact of the euro zone crisis could be undermining the global economic recovery. Europe is China's largest export market. But U.S. stock index futures have edged higher as investors remain hopeful that pending data on durable goods orders and initial jobless claims will show the world's largest economy is staying on track for recovery. The slowdown in economic activity in Europe's powerhouse Germany sent the euro ...

- 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. ...

The Weekly Bottom Line : 19/05/2012 HIGHLIGHTS OF THE WEEK United States - Global economic concerns ratcheted up this week. Widespread discussion of a Greek exit continued, Spanish banks faced rating downgrades and periphery sovereign debt yields moved higher. - Financial markets have responded to these global worries with increased risk aversion. The S&P is poised to end the week 3% lower, and 10-year treasuries are yielding just 1.7%. - U.S. economic data has proved somewhat more encouraging, but growth is still struggling to breakout beyond a moderate pace. This has kept the possibility of additional monetary stimulus alive even if the threshold remains quite high. Canada - Recent economic indicators are showing a resurgence of strength in the Canadian economy. Strong ...

Gold sank to a 2012 low on Wednesday before paring losses in choppy trade, as traders were torn between hope that France and Germany would work together to keep the Euro zone intact and new signs of stress in the Greek banking sector. Bullion briefly crossed into bear market territory, down 20 percent from its record last September, as intensifying fears a Greek exit from the euro zone would worsen the debt crisis gripped financial markets earlier in the day. Prices later recouped most of their losses following a meeting between new French President Francois Hollande and German Chancellor Angela Merkel at which they pledged to forge a joint approach for an EU summit next month. That eased concerns of a spat that could worsen the euro zone crisis. During the U.S. session, gold prices ...

(Reuters) - In a ramshackle township in northwest China's Shaanxi province, red Communist Party banners call on a nearby steel mill's workers to seek "progress" and avoid making "backward steps". The slogans demonstrate the hybrid nature of China's floundering steel sector, which as it tries to serve the twin masters of the state and the market has seen margins plummet and racked up a mountain of debt. Beijing's attempts to tackle the problems by forcing lumbering state-owned mills to consolidate or push up the value chain look likely to aggravate rather than solve the problems of a sector that accounts for 3-4 percent of China's GDP. An obvious solution - to allow the worst performers to go out of business - seems unlikely in an industry identified by Chairman Mao Zedong nearly half a ...

(Reuters) - Brent crude futures held steady above $118 on Wednesday as concerns on the euro zone crisis eased after a successful Spanish debt auction and a better growth forecast from the International Monetary Fund. The IMF offered a cautiously optimistic view on global growth, which it said is slowly improving as the U.S. recovery gains traction and dangers from Europe recede. While the euro zone will suffer a mild recession, the IMF said it would be less severe than feared after moves to calm markets at the turn of the year. Brent June crude slipped one cent to $118.77 a barrel by 2:34 a.m. EDT, after settling higher at $118.78 in the previous session. U.S. May crude gained 25 cents to $104.45, after settling at its highest close since April 2. The May contract expires on Friday. " ...

Weekly Economic and Financial Commentary U.S. Review A Rough Start To April Another week of softer U.S. economic data weighed on market sentiment this week. More hints of slower economic growth are appearing in the data, consistent with our forecast that U.S. GDP growth slows to a 2.8 percent annualized pace in the first quarter and continues slowing to a sub 2 percent annualized pace in the second. Initial jobless claims jumped by 13,000 in the first week of April. February imports plunged 2.7 percent, small business confidence fell in March for the first time in seven months and core inflation is on the rise. A Rough Start to April United States economic data releases so far this month have not been kind to the bulls on Wall Street. The poor March payroll report rattled some ...

The selloff in U.S. stocks accelerated on Tuesday, as the Dow and S&P 500 dropped for a fifth day, with the pullback coming on the cusp of earnings season. The slide marked the S&P 500's worst day since December 8. The declines were the largest losses this year in terms of both points and percentage drops for each of the three major U.S. stock indexes. All S&P 500 sectors ended solidly lower, with industrial and materials names suffering the biggest drops. About 80 percent of shares listed on the New York Stock Exchange and the Nasdaq Stock Market ended lower. The major U.S. stock indexes each fell more than 1.5 percent, pushing the S&P 500 below its 50-day moving average of 1,372.30, an area viewed as a significant support level that will make or break the current uptrend. "Dropping ...

Wall Street's recent sell-off accelerated on Tuesday, with the benchmark S&P posting its worst day in four months, stung by worries about slowing economic growth, and oil prices suffered their biggest percentage decline this year on worries about weakening demand from China. Signs of a cooling U.S. recovery after Friday's release of disappointing data on jobs creation in March and the euro zone's festering debt crisis fueled a view of tepid global growth, stoking safety bids for gold as well as U.S. and German government debt. Oil prices closed down below $120 a barrel in London after China, the world's second largest oil consumer, reported a decline in imports of crude oil in March, raising concerns about its oil demand and a slowdown in the Chinese economy. The pullback on Wall Street ...