Heighten The Markets Nervousness

Fundamental Analysis EUR "The cost of postponing a solution is extremely high for Europe, but especially for the future of the euro" - Giovanni Bossi, chief executive officer of Banca Ifis SpA Talks on Greek debt swap resumed on Thursday as European finance ministers pressure private bondholders to take bigger losses on their Greek holdings. USD "Improving economic momentum and diminished angst surrounding the financial crisis has encouraged businesses to take on more risk" - Richard DeKaser, deputy chief economist at Parthenon Group Inc. The number of Americans claiming for unemployment benefits rose to 377 thousand in the week ended January 21 from 356 thousand the week before, said the Department of Labor on Thursday. GBP "Given the key role of consumer spending, the CBI survey ...

(Reuters) - The beating that Asian currencies have taken in the past week will probably open up opportunities for longer-term investors to load up on local currency bonds, with the region still mostly seen as resilient to Europe's debt crisis. Stronger fiscal positions, long-term expectations for currency appreciation and relatively high interest rates are helping some fund managers stomach a sharp selloff in Asian currencies and take a long view while investing in Asian debt markets. Other institutional investors have joined the likes of hedge funds and slashed bets on emerging Asian currencies, even though local bond yields have held up relatively well. Indonesian and Philippine government yields, for example, did not surge in the past month when other global markets reeled from ...

Previous session overview Stock market declines around the globe sent the safe-haven yen higher and the euro lower in Asian trading Friday, with no signs that the equities sell-off was running out of steam. Asian markets fell sharply after Wall Street tumbled 3.7% on Thursday amid heightened concerns about U.S. growth and the potential for a credit freeze in Europe. The Nikkei Stock Average lost 2.2% in the morning session. FX trading was relatively subdued, however. The dollar fell to JPY76.50 as of 0300 GMT from JPY76.57 in late New York trade. The euro fell to USD1.4327 from USD1.4334, and JPY109.60 from JPY109.75. The dollar was at CHF0.7940 from CHF0.7941. The European woes come amid growing concerns the U.S. economy is headed back into recession. Overnight, the Philadelphia ...

The euro extended losses and commodity currencies fell on Wednesday after China raised rates for the third time this year, driving investors to shed exposure in riskier assets in a market already shaken by Portugal's rating being cut to junk. Investors cut exposure to stocks, commodities and growth-linked currencies, pushing the Australian dollar down 0.3 percent to $1.0660. Analysts, though, said the sell-off was a knee-jerk reaction and would be limited. "When the Chinese raise interest rates the initial reaction of the commodity currencies is normally negative in the short-term but the story is that China is serious about moderating the pace of its economy and the trend is still a positive one," said Peter Kinsella, analyst at Commerzbank. The latest move increases China's benchmark ...

Risk sentiment failed to capitalize on the Irish financial rescue plan yesterday, as risk reduction continued to be the name of the game. As to be expected, EURUSD was hardest hit, dropping 2.00% as any confidence that the EU sovereign crisis was solved, quickly eroded. EU peripheral bond yield spreads widened further with Spain vs. Germany leading the way 27bp to 271bp. EURUSD has come under significant selling pressure as the ECB released a report showing that overnight borrowing from the ECB climbed to €1.9bn from yesterdays €852m. While today’s number is still way off the recent high of €4bn, it is still a considerable jump. Figures like this will only heighten the markets nervousness surrounding bailout speculation in Spain, Portugal and Belgium. In addition, yesterday's weak ...

(Reuters) - Gold slid below $1,340 an ounce in its most volatile trading day in two months Thursday, having earlier hit a record high on investor expectations for the Federal Reserve to support flagging U.S. growth. Spot gold was last at $1,337.75 an ounce at 1451 GMT, up from $1,345.80 late Wednesday, but down from an all-time peak of $1,364.60 struck earlier in the day as a rebound in the dollar against the euro dented gold. The Fed is still widely expected to resume quantitative easing -- in which the central bank would buy government bonds for example and pump extra cash into the financial system to keep interest rates low -- which has pushed the dollar down 7 percent against a basket of currencies in the last month. Gold, which usually benefits from dollar weakness due to its ...