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Euro Rebound Short-Lived
Sunrise Market Commentary
- Fixed Income: Profit taking continued, but now concluded?
- The profit taking on global core bond markets continued in the run-up to tonight's informal EU-Summit. Spanish and Italian spreads decreased significantly but yields remain at elevated levels. Today, the eco calendar is again thin and trading will again be driven by sentiment.
- Currencies: Euro rebound short-lived On
- Tuesday, the euro came again under pressure even as the global context was not that negative. Sentiment on risk was constructive and intra-EMU spreads narrowed, but all this didn't prevent investors to use any upticks in the single currency to further reduce exposure. The key 1.2642/24 support is again coming within reach.
The Sunrise Headlines
- In the final hour of ...
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Euro hits 21-month low versus dollar before EU summit
(Reuters) - The euro hit a 21-month low against the dollar on Wednesday ahead of an EU meeting later, with investors doubtful that leaders would come up with measures to stem the euro zone debt crisis.
An informal EU summit is expected to discuss growth-boosting measures but was not expected to produce any plan that would restore optimism among investors, especially given Germany remains strongly opposed to joint euro bonds.
The euro fell to $1.2615, dropping below the 2012 low of $1.2624 set in January to mark its lowest since August 2010.
Fears that Greece may have to leave the euro grew after Dow Jones earlier quoted former prime minister Lucas Papademos as saying Greece had no choice but to stick with a painful austerity program or face a damaging exit from the euro zone.
However, ...
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Asian stocks driven lower by downgrades in China, Japan ahead of EU summit
Ahead of a meeting of European leaders, the MSCI Asia Pacific Index dropped 1.5% at 12:31 in Tokyo after investors lost their appetite for risk after they were spooked by the mounting worries over Greece exiting the eurozone, while BoJ held its monetary policy unchanged although growth is slowing.
Greece’s former Prime Minister Lucas Papademos said yesterday that while it is unlikely that the nation will leave the eurozone, the risks are still high. And if this would prove to be the case, other countries may follow, warned Jin Liqun, chairman of China Investment Corp.
Meanwhile, one day after Fitch cut the Japan’s rating by one notch to A-plus from AA with negative outlook, citing “high and rising public debt” burden, Japan showed a slowdown in its exports during April, adding to ...
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Analysis: In India, muddled leadership leaves economy adrift
"Dear God," wrote economist Rajeev Malik as he called on the Almighty to help India's "rudderless" government in a biting critique that underscored a growing frustration at home and abroad with the stewardship of Asia's third-largest economy.
Writing in India's Business Standard newspaper, the well-respected Malik echoed the exasperation of Indian and foreign business groups pressing for the government to swiftly implement major economic reforms and formulate a coherent strategy to deal with its mounting problems.
Another newspaper said India could be heading to a Greek-style crisis.
Prime Minister Manmohan Singh's Congress Party blames unreliable allies in his coalition government for blocking major reforms aimed at opening up the economy to much-needed foreign investment and tackling ...
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China’s slower exports brought volatility in Asia; eyes on Europe and BoE
Pessimism brought volatility in Asian on Thursday, where the Asian stocks swung between gains and losses while the MSCI Asia Pacific Index rose only 0.1% at 14:25 in Tokyo, after China’s slowing growth was confirmed by the trade balance data.
Investors continue to limit their appetite for risk as cautious persist since doubts over the strength of the US recovery were combined with the complicating the outlook for Europe and the slower growth in China.
Greece’s political deadlock is still a major concern for markets, as it puts the eurozone unity at risk, derail the austerity plans and could aggravate the region’s debt crisis especially after the political changes seen in France.
The leader of Greek leftist party Syriza, Alexi Tspiras, failed again to form a government coalition, which ...
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EUR/USD Testing Key Support
Sunrise Market Commentary
- Fixed Income: new contract highs
- London-traders returned and the market seemed to react with a lag to this weekend's election results. In a risk off session, both the German Bund Future and the US Note Future set new contract highs, respectively at 142.62 and 133-04.
- Currencies EUR/USD testing key support
- On Tuesday, sentiment on the euro remained fragile even as there was little news from the political scene in France or Greece. EUR/USD is again testing the key 1.2974/55 support area. A break below this level would be highly significant from a technical point of view.
The Sunrise Headlines
- US Equities dropped sharply lower yesterday, but reversed most of their losses in the final hours of trading. The S&P ended the session 0.43% lower. ...
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Greek Election Result Worry Traders
Forex News and Events:
A wave of anti-austerity election results has shifted the market’s attention away from the weak US payroll reports and has sent traders in search of safe-havens. France Socialist leader, Francois Hollande defeated President Sarkozy. Frances's new socialist President Hollande has expressed his distaste for the EU fiscal treaty and vowed to hold back France's vote until additional growth measures are included. However, we suspect Hollande will be more realistic with his insistence on changes in the fiscal pact by balancing demands with practical expectations of the bond market. Moving forward, we don’t expect the new president to damage their cost of capital and are already hear advisors tone down Hollande rhetoric. On the other hand the situation in Greece is ...
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Weekly Economic and Financial Commentary : 04/05/2012
U.S. Review
Modest Growth on a Broadening Base
- The underlying tone of the recent economic reports remains consistent with modest economic growth. Consumer spending ended the first quarter on a solid note and spending is now on track to grow at a 2 percent pace in the second quarter.
- Reports from the regional manufacturing surveys showed some weakness but the National ISM report came in stronger than expected. The nonmanufacturing survey, however, came in below expectations.
- Nonfarm employment rose by 115,000 jobs in April and the unemployment rate fell 0.1 percent to 8.1 percent.
Modest Growth on a Broadening Base
This week's ISM report came in better than expected, rising 1.4 points to 54.8 in April, which greatly relieves fears built up from the weaker factory orders ...
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Eurozone woes spark worst UK property recession
(Reuters) - UK commercial property is suffering its deepest downturn since records began after uncertainty surrounding the euro zone crisis pushed values down for the second consecutive quarter and more pain looms on the horizon, data showed.
Investment Property Databank (IPD) said the value of shops, offices and warehouses fell 0.7 percent during the first quarter of 2012, following a 0.1 percent decline in the previous period and were 31 percent below the last peak in September 2007.
The slump is twice as severe as during the previous recession of the late 1980s when values recovered to 15 percent below their pre-crash levels within five years and is the worst downturn since the UK's benchmark index began in 1971.
"The UK has fallen back into technical recession largely due to a lack ...
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