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Hit Markets YesterdayTitle:
All Eyes on BoE
Forex News and Events:
Bank of England stands to make a crucial decision today as turmoil hinders most of its peer Euro Zone economies. UK’s GDP contracted in the last quarter of 2011 by a revised 0.3%, and inflation remained higher than the 2% average target set by the BoE. During the last weeks, economic data in services and manufacturing were mainly affected by rising petroleum prices and austerity budget cuts biting deep into consumer / household spending. But MPC member Adam Posen, hitherto a fervent supporter of QE stated: “My own personal view is that I think the economy is stronger than what data is going to show”. The central bank last increased its asset purchase program target by 18% in February to GBP325bn as the money supply gauge M4 dipped heavily, suggesting a tightening of ...
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Risk Recovery Looks Fragile
It's one step forward and two steps back for risk at the moment. On the one hand we heard yesterday that Greece was 'more than likely' to receive its next aid tranche in order to cover a bond redemption due later this month, yet the political deadlock from Sunday's election is now entering its fourth day. The chances are that Greece will have to go back to the polls next month (at the cost of about EU 18mn) and the financial markets are concerned that the electorate will choose an anti-austerity party as its first choice.
The choice is up to the Greeks
However, Greece may not like austerity, but it also wants to remain in the Eurozone. EU officials, particularly in Germany, have broken the taboo that no one can leave the Eurozone and started to publically announce that Greece has to ...
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Fragile euro holds above multi-month lows
(Reuters) - The euro edged away from a 3 1/2-month low against the dollar on Thursday as stress in Spanish debt markets abated slightly and after Greece secured funds needed for bond repayments, tempering the threat of a Greek insolvency and possible euro exit.
Greece averted an imminent funding crisis after the board of the European Financial Stability Facility agreed to a scheduled 5.2 billion euro ($6.72 billion) payment. However, impatient governments withheld part of the latest tranche of rescue funds to be paid to Greece on Thursday.
Ten-year Spanish government bond yields fell after Spain's government effectively took over Bankia, one of the country's biggest banks, in a bid to restore confidence in Spain's ailing banking system.
Title:
Political Situation in Greece Drives Risky Assets lower
Forex News and Events:
Considering the risk building in Europe, the EUR has held up surprisingly well. However, given the following headlines from Greece, we doubt how much longer the single currency can remain resilient. Conservative leader Samaras stated “I tried to form a coalition government with two goals: that the country remain in the euro and bailout policies change to include growth measures,” the lack of success after 6 hrs of talks in Athens means he will hand over the mandate back to the president. This also means that the attempt to form a government will now be passed to Alexis Tsipras, the head of Syriza, who has vowed to derail the current bailout path. Comments from Tsipras overnight has rattled the markets nerves as the Syriza leader Alex stated that he will annul the ...
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Contending With Greece And Spain
Risk assets continue to get sold today and the back-drop remains fragile. The leader of the radical left Syrizia party in Greece has two days to try to form a government, thus expect anti-austerity/ anti bailout rhetoric to continue to come out of Athens today. It appears that Tsipars – the head of Syrizia - wants to hold new elections to try and win the premiership. This only extends the uncertainty about Greece remaining in the Eurozone, which spooked risk assets yesterday.
Spanish banks
That isn't the only thing that investors need to contend with. The Spanish bond market is pricing in the risk of the government needing to bail out its banking sector, hence why its bond yields are flying higher this morning. The 10-year yield has risen nearly 25 basis points so far today and is back ...
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Euro falls 7th day vs dollar on political uncertainty
The euro fell for a seventh straight session against the dollar on Tuesday on worries that political uncertainty in Greece and a change of French presidents could threaten austerity plans seen as key to tackling the euro zone debt crisis.
The euro fell below the psychological level of $1.30 after the leader of Greece's Left Coalition party said the country's Greece's commitment to an EU/IMF rescue deal has become null and void.
"The euro reacted to the Greece headlines, but the move lower has faded a bit because what he said was not so unexpected," said Camilla Sutton, chief currency strategist at Scotia Capital in Toronto.
"The euro remains extremely vulnerable to political risk and if we close below yesterday's low of $1.2955 that would potentially shift the technicals into bear ...
Title:
Will EURUSD Fall Below 1.30?
This is the key question for currency traders right now. The fundamental back-drop looks challenging for the euro. Although the Merkel/ Hollande rift seems overdone to us, Greece is the real problem. The leader of the New Democracy party announced late last night that he had failed to form a coalition government. The baton is now passed to the leader of the radical left wing Syrizia party, which now has three days to form a government. If this fails then another round of elections is on the cards for June. However, these elections could coincide with Greece running out of money, which makes them a much riskier prospect than the elections held last weekend.
Election deadlock
However, why has the euro not fallen through the floor? Back in 2010 the mere mention of the word bailout caused ...
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Greek Elections Lead to Significant Euro Losses
The results of Greek parliamentary elections held over the weekend kept the euro low against virtually all of its main rivals throughout yesterday's trading session. Investor concerns about Greece's new government and how it will act toward tough austerity measures imposed on the country brought the euro down to a 3 ½ year low against the British pound and a three-month low against the US dollar. Turning to today, euro-zone news is once again forecasted to impact the markets. The German Industrial Production figure and a speech from the ECB President have the potential to create significant volatility.
Economic News
USD - USD Takes Slight Losses against Main Currency Rivals
After seeing significant gains when markets opened for the week, the US dollar staged a minor downward correction ...
Title:
ECN monetary policy unchanged; Market cautious ahead of US jobs report
Forex Morning Briefing : ECN monetary policy unchanged; Market cautious ahead of US jobs report
What’s new:
Forex: Euro recovers after ECB President Mario Draghi’s news conference
Global Markets: Asian stocks close in positive territory
Euro zone: ECB leave rates unchanged at 1.00 percent, Draghi sounds less dovish
Europe: Focus on French and Greek elections this weekend
United States: Shares down before US jobs data release today
United States: Jobless claims fall to one-month low, today’s jobs report in focus
Rates in Asia and Indices:
EUR/USD 1.3144 1.3163 -0.00 %
USD/CHF 0.9129 0.9141 -0.01 %
GBP/USD 1.6177 1.6195 0.05 %
USD/JPY 80.14 80.28 0 %
EUR/CHF 1.2014 1.2017 -0.00 %
EUR/JPY 105. ...
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