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Increasing Growth ConcernTitle:
A week full of important economic data from Japan
Currently, the Japanese economy started its recovery trip gradually during the second three months of the year, but the economic growth is still facing a lot of obstacles that will impede its rebound.
The Japanese GDP preliminary shrank by 0.3% during the second quarter, better than the first quarter's contraction of 0.9%, while analysts' expectations referred to -0.6%.
Machine orders in Japan advanced in June after the sharp declined in May, giving s better outlook for business investments in the upcoming period. Increasing demand from the Asian region, especially China, encouraged Japanese manufacturers to enhance productivity, supporting the recovery from the nation's worst earthquake.
Japanese exports dropped by 3.3% more than expected during the month of July due to the decline in ...
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Another heart-wrenching week buoyed by sluggish growth and possible bank funding problems
Worries continued to persist in markets as the general sentiment remained negative, pushing European shares to record low and triggering haven demand.
The slowdown in global growth and fears of spread of debt contagion to European banks revived concerns the world is in the throes of another crisis.
European equities recorded the sharpest daily fall since March 2009 on Friday while German bunds advanced for the whole week and gold touched a new record high on risk aversion behavior by inventors.
In the euro area, worries aggravated after the Franco-German meeting resulted in disagreement about expanding the European rescue fund beyond the current 440 billion euros and creating Eurobonds next year, or, in other words, establishing a fiscal union, as it was met by refusal from other ...
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Risk Sentiment Stumbles Again, Waiting for Jackson Hole
The Week Ahead
Highlights
Risk sentiment stumbles again
Waiting for Jackson Hole
Are 'safe-havens' due for a short-term pullback?
SNB intervention risk is here to stay
The ECB calms sovereign debt markets
Key data and events to watch next week
Risk sentiment stumbles again
Risk assets (stocks, commodities, JPY- and CHF-crosses, and commodity currencies) stabilized further to start this past week, but suffered what seems likely to be the first in a series of periodic relapses, as market conviction remains extremely low. We remain cautiously optimistic that the sell-off in the first half of August marked the low point in the current risk retrenchment, but we are keenly aware that risks remain skewed to the downside. In support of the view that a medium-term bottom ...
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The Weekly Bottom Line : 20/08/2011
The Weekly Bottom Line
HIGHLIGHTS OF THE WEEK
United States
With German growth slowing to a crawl, Europe's economy is sputtering as its ability to solve its fiscal woes is increasingly being called into question.
The U.S. economy is also showing continued signs of weakness, raising the sobering prospect that the uncertainties of the last month may have begun bleeding into the real economy.
The risk of a shallow recession is rising. However, we still feel that marginally positive growth is the more likely scenario. Once August data begins trickling in next month, we will have a better sense of the real economic damage wrought by this month's financial upheavals.
Canada
Bank of Canada Governor Mark Carney and Finance Minister Jim Flaherty were called to testify on the ...
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Dukascopy Morning Forex Overview: 19/08/2011
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 ...
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Volatility raises refinancing risk for lowest-rated issuers
NEW YORK (IFR) - So much for stability. This week's apparent improvement in the markets was short lived as risk assets once again retreated on recession fears and banking worries.
The unrelenting volatility and slowdown in economic growth threatens to put increasing pressure on lower-junk rated issuers' ability to refinance, as risk aversion remains de rigueur.
Sales of new junk debt have tumbled to the lowest monthly level in two years, with only four companies tapping the market for a total of $1 billion so far in August. This falls far short of the 50 companies that tapped the market in August last year for nearly $25 billion, or the 27 companies that priced for nearly $10 billion in August of 2009, according to data from Thomson Reuters.
Given that August supply tends to be ...
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U.S. bond yields plunge as economy fears mount
(Reuters) - U.S. Treasury prices soared on Thursday and benchmark 10-year note yields fell below 2 percent for the first time as global economic fears sent investors scrambling for safe-haven government debt.
U.S. bond buying intensified after data showed that factory activity in the Mid-Atlantic region plummeted in August while sales of U.S. existing homes unexpectedly dropped in July.
Rising fears about the ability of European policymakers to contain the region's debt crisis, which threatens to further derail economic recovery in Europe, earlier had driven a bid for U.S. Treasury debt.
The latest U.S. data added to concerns that the United States will head back into recession at the same time as the country's rising debt load and record deficit leaves the government and the Federal ...
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Focus on Swiss Franc
FUNDAMENTAL OUTLOOK at 0800 GMT (EDT +0400)
USD
The Swiss franc opened on a soft note in Europe as investors began to price in a strengthening in official resolve to combat the currency’s strength. Yesterday afternoon the Swiss government launched a package of measures for industries affected by the exchange rate and also confirmed the SNB’s authority to set a floor on EURCHF single-handedly if it sees fit to do so. However, government consultation will still be needed if the SNB wishes to impose capital controls at some point in the future. Further liquidity injections and action in the FX swaps market are likely to continue but the effects are expected to be muted, especially as sight deposit levels approach target. Overnight during Asian trading risk softened as growth concerns ...
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SNB intervening in FX Forwards
Morning Briefing : Euro choppy overnight after Franco-German summit
What's new:
Forex: Swiss franc trims gains as risk sentiment improves after S&P comments on France
Global Markets: Asian stocks hurt by fears of US recession; Gold higher on growth concerns
France: S&P confident that France will maintain AAA rating with stable outlook
Switzerland: SNB to increase sight deposits in an effort to curb franc’s strength
Euro zone: Headline annual CPI as expected at 2.5%, Core CPI lower at 1.2% y/y
Forex rates in Asia and Indices:
EUR/USD: 1.4440 - 1.4383
USD/CHF: 0.7990 – 0.7890
GBP/USD: 1.6547 - 1.6506
USD/JPY: 76.71 – 76.53
EUR/CHF: 1.1515 – 1.1368
EUR/JPY: 110.64 – 110.19
DowJones: 11'410.21 +0.04%
NASDAQ: 2'511.48 -0.47%
S & P 500: 1'193.89 +0.09%
Nikkei: 8’943.76 -1.25%
Shanghai: 2’561. ...
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