Impasse Is Weighing On The Market

Euro zone data released today showed that euro area growth stalled in the first quarter, amid the undergoing political uncertainty and fiscal woes. The GDP advanced reading for the first quarter showed a flat reading, following the 0.2% drop in the last quarter of 2011. On the year, the reading also came flat compared to the prior 0.3% drop. In fact, the reading beat expectations of seeing 0.3% contraction on the quarterly basis, probably boosted by the better-than-expected advance in the German reading which recorded 0.5% expansion. In France, the growth path stalled in the first quarter from a revised of 0.1% which was 0.2% initially. Although there is improvement in the region`s largest economy, yet it seems that Germany is moving solely as other euro area nations are ...

Crude oil found strong support from the German data today to halt the sharp downside wave and starts an upside correction after the sharp losses. Germany remains the rescuer for the Euro area’s economy after it grew better than expected in the first quarter, offering room in the market for relief. Crude oil opened today’s session at $94.04 and reached so far a high of $95.01 and a low of $93.95, where it is currently trading around $94.75 a barrel. The commodity found strong support from the weakening dollar that declined from the opening at 80.70 to the low of 80.48. Uncertainty remains in Europe but relief is seen after the Euro’s biggest economy Germany released its first quarter GDP figures beating all estimates. The German economy grew by 0.5% over quarterly basis recovering from ...

The euro fell to a near four-month low on Monday as political turmoil gripped Greece, highlighting the risk the country may exit the euro zone, while worries about slowing Chinese and global growth drove down higher-yielding currencies. Safe-haven currencies including the dollar and the Japanese yen rose as coalition talks in Greece hit an impasse on Sunday, increasing the chance of another election. Euro zone industrial production unexpectedly fell in March, adding to signs the bloc is heading into recession and further fuelling bearish sentiment, while Spain's short-term debt costs rose at auction and its 10-year yields soared. The common currency fell to $1.2861 on trading platform EBS, its lowest level since January 23. It has lost 2.7 percent so far this month after losing 0.8 ...

USD trading broadly higher (except against the JPY) as the Greek political impasse is raises concerns and increases risk aversion. The IMF remained firm saying that Greece must deliver necessary economic reforms and that it is not acceptable for the country to seek laxer loan terms. German officials are speaking out as well calling the latest developments ‘very worrying' and saying that Greeks must decide whether or not they want to stay in the euro. It is another light day for economic data in the US with weekly mortgage applications rising by +1.7% and March wholesale inventories due out at 1000ET. UST yields continues their descent across the curve with the 10-year yield falling below the 1.80% level as a result of both increased risk aversion and increased speculation of QE3. The ...

Dutch Fears Trump French Elections If you looked at the headlines from the weekend you may have thought that risk was poised to rally today. The first round of the French Presidential election was a tighter race than expected. Socialist Hollande won 27.1% of the vote while Sarkozy was not that far behind with 26.7%. The French left, which has called for ECB rate cuts and a re-negotiation of the EU's Fiscal Pact, did less well than expected, which should have calmed markets this morning. However, weak economic data out of the currency bloc combined with fears about the Dutch triple A credit rating has caused risk aversion to grip the markets at the start of this week. Dutch budget wrangling hurts risk sentiment The Netherlands has overtaken France as the largest political risk this week ...

Yesterday, Europe was back in the news. Whenever Europe is in the headlines, the headlines are bad. And the ideas behind the headlines are absurd. In fact, it is amazing how many crackpot ideas the press can throw at you in a single day. The immediate problems in Europe were two: First, it looked like Portugal was going the way of Greece. It would soon need another bailout, said the papers. Second, the Greeks themselves, were still having trouble settling up with their creditors — despite years of negotiation, bailouts, rescue plans, and mouth-to-mouth resuscitation. Bloomberg was on the story yesterday afternoon: …a stalemate between European policy makers and Greek bondholders over debt relief increased concern that the European credit crisis will spread. …finance ministers balked ...

(Reuters) - Gold fell on Tuesday as a lower euro, due to an impasse to restructure Greek debt, and weakness in crude oil and equities prompted investors to take profits. After hitting a six-week high in the previous session, gold fell on the weaker euro. The euro was hurt as Greece appeared to move closer to a possible chaotic default when euro zone officials rejected a final offer from the country's private bondholders. Analysts said some gold buyers stayed on the sidelines ahead of a U.S. Federal Reserve policy statement on Wednesday. The central bank will for the first time offer its projections for the path of interest rates, laying out views on when the first rate hike should occur. "There is a refocus on the debt crisis in Europe. Gold will continue to trade in tandem with the ...

The Week Ahead Highlights Risks remain high amid debt and growth concerns Cracks appear in the EU debt deal UK's growth picture not as bleak as expected Asia/Pacific FX - Rising inflation in Oceania and rising intervention risks in Japan Key data and events to watch next week Risks remain high amid debt and growth concerns Uncertainty remained elevated and markets were on edge as debt problems on both sides of the Atlantic dominated headlines. Safe havens such as the JPY, CHF, and gold were beneficiaries amid market jitters. The Swiss franc reached new record highs gaining over 4% this week against the greenback and roughly 3.73% against the euro at the time of writing. In Europe, peripheral yields moved higher as the euphoria over the previous week's EU summit wore ...

Previous session overview Durable-goods orders fell for the second time in three months during June, indicating the sluggish economy is weighing on the nation's manufacturing sector. Manufacturers' orders for durables decreased 2.1% to a seasonally adjusted USD191.98 billion, the Commerce Department said Wednesday. Economists had forecast orders for goods designed to last at least three years would rise by 0.4% during June. The euro has fallen to session lows against the dollar, yen and Swiss franc as a sell-off that began overnight accelerates heading into the London close. Renewed concerns about the implementation of a second bailout for Greece and an overhaul of the common currency zone's bailout fund hurt the euro, say dealers. The euro is down to USD1.4421, a drop of more than ...