Housing Market Is Weakening

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 ...

Fundamental News Today’s highlights: · CPI (MoM) (GB, 09:30 GMT) · BOE Inflation Letter (GB, Tentative) · Existing Home Sales (U.S., 15 :00 GMT) The U.S. labor market is set to strengthen this year, a survey published by the National Association for Business Economics said Monday. The survey of 54 economists said non-farm payroll increases will average 188,000 per month this year, up from the prior projection of 170,000. The jobless rate is expected to fall to 8 percent by the fourth quarter of 2012. Japan’s foreign investments and assets grew to the second-highest level on record as companies used the high yen to make acquisitions abroad, a trend that may help them cope with stagnant demand at home. Investments abroad grew 3.3 percent to 582 trillion yen ($7. ...

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 ...

Crude oil picks up in today’s session on a strong GDP from Japan and relief seen in the United States which showed some positive signs yesterday by recovering manufacturing and housing sectors. Nevertheless, fears are still elevated in Europe with the possibility of a Greek exit from the Euro bloc and bad economic conditions in Spain. The Japanese economy released its industrial production that showed improvement in March, where the actual reading came at 1.3%, compared with the previous reading of 1.0%. The economy also reported 1.0% expansion in the first quarter that beat expectations. Crude oil opened today’s session at $92.77 and reached so far a high of $93.69 and a low of $92.68 and is currently trading around $93.25 a barrel. The EIA reported the eight’s consecutive week of ...

Forex News and Events: Yesterday’s European session was a breather for the Euro area as German GDP came in much better than expected at 0.5% q-o-q. The strength of Germany’s numbers pulled EU’s GDP higher to 0.0% against a forecast -0.2%, avoiding a technical recession after last quarter’s -0.3% GDP. Nevertheless, both German and Euro zone economic sentiments were lower, underscoring a fading institutional optimism over economic health. GDP for the biggest European economies after Germany were worrisome, with France generating no growth in the first quarter of 2012 while Italy and Spain’s economies contracted by 0.8% and 0.3% respectively over the same period. The situation in Greece is still moving towards a new round of elections with Independent Greeks party leader Kammemos announcing ...

The RBA surprised the market by electing to cut the official cash rate by 50 bps, double the expected 25 bps cut. The aussie plummeted on the back of the announcement, with AUDUSD immediately sliding around 70 pips. The board had previously hinted that current economic conditions provide scope for a rate cut, but 50 bps was not expected given that a cut of this size is usually only delivered during emergency conditions, which we believe is not the case. Nevertheless, we think the board decided to move based largely on last month’s weak inflation figures, which the bank had previously stated would dictate whether or not they decided to cut rates. Also, RBA Governor Stevens highlighted soft domestic conditions and weakening global growth as underlying reasons for the big move. Earlier in ...

Multiple key data and reports from the key sectors and activities were released this week in the superpower all in all confirming one clear scheme; the world's leading economy is expanding only moderately, watching a gradual recovery taking place successfully but remains insufficient to suppress the jobless levels to boost growth. It is no surprise that the Federal Open Market Committee decided as accustomed and as already forecasted to keep the federal funds target rate intact at its historical low of 0.00 percent to 0.25 percent, and attesting once again that the country's economic momentum during this past period was "expanding moderately". Having in mind that several times before we have watched the FOMC members pledge to keep exceptionally low rates through at least late 2014; the ...

The Weekly Bottom Line HIGHLIGHTS OF THE WEEK United States - Europe provided plenty of negative headlines this week. Both Spain and the U.K. confirmed their economies fell back in recession, while the former saw its unemployment rate jump to 24.4%. - The Dutch government collapsed over a dispute regarding fiscal tightening measures and S&P downgraded Spain's sovereign rating by two notches to BBB+. - Although unspectacular, things were better in the U.S. First quarter GDP growth came softer than expected. However moderate, a 2.2% q/q annualized economic expansion feels comforting against the European backdrop. Canada - Retail trade slid by 0.2% in February as auto sales declined following strong January results. - Newfoundland and Labrador brought down its budget, ...

Weekly Economic and Financial Commentary U.S. Review First-Quarter GDP Growth Slows The U.S. economy grew at a 2.2 percent annual rate in the first quarter, somewhat slower than the consensus had expected. Consumption remained the primary driver of growth as business spending slowed and the government sector continued to scale back spending. In our U.S. review section this week, we discuss the GDP report in the context of the big miss in durables and consider what it means for business spending going forward. We also look at a very small change in the Fed statement this week that reflects an improving view on the troubled housing sector. Business Spending Poised for a Slowdown? Durable goods orders for March were ugly. The 4.2 percent drop was the largest decline since the U.S. ...