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Given The News FlowTitle:
Euro tumbles on Greek exit fears
(Reuters) - The euro slumped 1 percent against the U.S. dollar on Tuesday, ahead of an informal meeting of European leaders, on growing fears of a Greek exit from the euro zone.
Dow Jones quoted former Greek prime minister Lucas Papademos as saying that Greeks had no choice but to stick with a painful austerity program or face a damaging exit from the euro zone, a risk he said was unlikely to materialize but that was real.
He also told the news agency that some European states and institutions were considering contingency plans for any eventuality.
"Sentiment is heavily against the euro," said Joseph Trevisani, chief market strategist at Worldwide Markets, Woodcliff Lake in New Jersey. "Any negative comment from former or current Greek officials sends the euro plummeting. There were ...
Title:
Euro slides vs. dollar as EU summit hopes wane
(Reuters) - The euro fell against the dollar on Tuesday after two days of gains as investors pared back expectations that an informal meeting of European leaders this week would yield much progress in tackling the region's debt crisis.
However, given the market's stretched bearish positioning and oversold signals on the technical charts, the euro could see a short-term squeeze higher ahead of the European summit.
The yen, meanwhile, tumbled after Fitch downgraded Japan's ratings and although the currency posted the biggest loss versus the dollar, investors remained focused on the euro.
While there have been hopes in some quarters that Wednesday's summit may lead to agreement on measures to boost euro zone growth, investors were not confident of a breakthrough given apparent differences ...
Title:
Euro falls vs. dollar as EU summit hopes dim
(Reuters) - The euro fell against the dollar on Tuesday after two days of gains as investors pared back expectations that an informal meeting of European leaders would yield much progress in tackling the region's debt crisis.
However, given the market's stretched bearish positioning and oversold signals on the technical charts, the euro could see a short-term squeeze higher ahead of the European summit.
While there have been hopes in some quarters that Wednesday's summit may lead to agreement on measures to boost growth, investors were not confident of a breakthrough given apparent differences in opinion between Germany and France.
French President Francois Hollande is expected to push for a joint euro zone bond, a measure backed by Italy, Spain and the European Commission.
However ...
Title:
Greek Chaos Continues But Solution Ultimately Found
- 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. ...
Title:
Safe-Haven Dollar
Forex News and Events:
Friday’s trading session was mostly uneventful with all the focus shifted to Facebook’s IPO. Many markets that had been freefalling these last two weeks caught a breather, with gold, silver, and the EUR gaining 1.12%, 2.57% and 0.63% respectively against the USD. The reversal has been attributed to a weak Philly Fed reading on economic activity in a sign that the world’s reserve currency is riskier than panicked markets are pricing. The weak number raised speculation over a new round of interventions from the part of the Fed in order to boost its economy. WTI however, was not able to profit from this reversal as it dropped to a six-month low before closing at 91.33. A 22-year high in inventory levels for the US could explain the decoupling of oil from the rest of ...
Title:
Copper up but Greek contagion fears weigh
(Reuters) - Copper extended gains on Monday, rising from four-month lows hit last week despite investors' concern about the risk of contagion if Greece defaults on its debt and leaves the euro.
Leaders of G8 major industrialized nations meeting at the weekend vowed to take steps to combat financial turmoil and revitalize a global economy threatened by Europe's debt crisis, but they offered no specific prescription for debt-crippled Greece which is to hold elections on June 17.
Recent opinion polls show Greek voters are returning to the establishment parties that negotiated its bailout, offering potential salvation for European leaders.
But deepening banking sector instability in Spain heightened concerns about contagion from Greece's political turmoil, meaning investors will likely stay ...
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Weekly Economic and Financial Commentary : 19/05/2012
U.S. Review
To QE3 or Not To QE3: That is the Question
- Some market participants are beginning to speculate about another round of quantitative easing. Although recent growth indicators have not been particularly stellar, the economy is still growing. Moreover, core CPI inflation in the neighborhood of 2 percent means that the threshold for more QE is relatively high.
- Overall, indicators were positive during the week. Housing starts increased by 2.6 percent in April, the Empire Manufacturing index improved to 17.09 in May from a 6.56 print in April and retail sales printed a 0.1 percent increase in April, in line with expectations.
To QE3 or Not To QE3: That is the Question
QE3 seems to have more lives that a cat; it comes back into the forefront of the U.S. economy discussion ...
Title:
Holiday in Europe Keeps Trading Subdued
Forex News and Events:
While the news flow emanating from Europe has slowed, proving a temporary respite from risky assets, the pressure on Greek banks is growing. After market chatter and media reports, the ECB confirmed that some Greek banks had turned to the Bank of Greece for Emergency Liquidity Assistance (ELA) pending recapitalization. The recapitalization that was to be finalized 'soon', and in theory would allow troubled Greek banks to return to normal ECB funding channels. However, with the other story that massive deposits are being withdrawn from Greek banks (€700bn ins May 6th election) circulating, the erosion of core capital means the prospects of these institution quickly returning to ECB seem unlikely. The recent ECB 3 year LTRO operation was an attempt to build a firewall ...
Title:
Ongoing Greek Drama
Forex News and Events:
In light of the current political turmoil in Greece, the EUR has gradually slipped to a three-month low at 1.2905 after a period of trading in a highly volatile range. The move coincides with the election on May 6th of anti-austerity Greek fringe parties, instead of the mainstream PASOK or New Democracy Party who helped secure the bailout package much needed to avoid disorderly default. After multiple attempts at forming a coalition government, the task has been handed to Mr Venizelos who reckoned having a slim chance of succeeding where others have failed. After a meeting with Venizelos yesterday evening, Democratic Left Party’s Kouvelis suggested a “formation of an ecumenical government that will respect the people’s mandate”. These statements coincide with weak ...
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