Instability Of Free Markets

Fundamental Analysis EUR "Inevitably there is going to be an element of bargain hunting as investors look to top up their holdings on the basis of slightly lower prices" - Richard Hunter, head of equities at Hargreaves Lansdown Stockbrokers European stocks edged higher on Monday on China’s pledge to boost growth. USD "Equity prices have gotten oversold" - Mark Luschini, chief investment strategist for Janney Montgomery Scott LLC U.S. equity market edged higher on Monday on China stimulus hopes and after German and French officials said they would cooperate to keep Greece in the monetary union. GBP "Obviously, as the euro depreciates, the U.K. gets slightly more expensive" - Miles Shipside, Rightmove commercial director U.K. national house prices stagnated in March, announced the ...

Fundamental Analysis EUR "Fears of a Greek exit from the euro zone and the negative consequences from that are prevailing" - Ben Kwong, KGI Asia European stocks edged lower after Fitch downgraded Greece’s credit rating to ‘CCC’, implying that the country is vulnerable and highly dependent on favourable economic conditions to fulfill its financial obligations. USD "If there were scope to do another twist of some type it would be prudent to consider it, especially in the scenario where things are worse and the Fed feels like it needs to move" - Nathan Sheets, Citigroup Inc. Fed policymakers might potentially launch another round of Operation Twist rather than a direct asset purchases in case of increased risks or further weakening of the US economy. GBP "We must work together to give ...

Asian shares tumbled on Friday and were set for their worst weekly showing since September, amid political turmoil in Greece and signs of growing instability in Spanish banks, with investors adding the latest weak U.S. data to the list of risk factors. Assets across the board, from commodities such as oil and gold to riskier currencies such as the euro and the Australian dollar were all heading for their weekly losses. Financial stocks were hammered after the head of Australia and New Zealand Banking Group (ANZ.AX) said volatile conditions in global markets have caused the wholesale funding market for Australian banks to freeze again, a worrying echo of the global financial crisis. European shares were also set to fall, with financial spreadbetters predicting that major European markets ...

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 ...

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. ...

RBNZ leaves rates unchanged; Equities get a little boost from Fed meeting Economic Data (NZ) RESERVE BANK OF NEW ZEALAND (RBNZ) LEAVES OFFICIAL CASH RATE UNCHANGED AT 2.50% (AS EXPECTED) (SG) SINGAPORE MAR INDUSTRIAL PRODUCTION M/M: +2.7% V -1.4%E; Y/Y: -3.4% V -5.8%E (KR) SOUTH KOREA Q1 PRELIMINARY GDP Q/Q: 0.9% V 0.9%E; Y/Y: 2.8% V 3.0%E (JP) JAPAN FEB ALL INDUSTRY ACTIVITY INDEX M/M: -0.1% V -0.2%E (AU) AUSTRALIA FEB CONFERENCE BOARD LEADING INDEX M/M: 0.0% V 1.0% PRIOR (UK) UK MAR NATIONWIDE CONSUMER CONFIDENCE: 53 V 43E (9-month high) (AU) AUSTRALIA MAR DEWR INTERNET SKILLED VACANCIES M/M: 0.8% V 0.3% PRIOR (HK) Hong Kong Monetary Authority (HKMA) keeps base rate unchanged at 0.5%, as expected (JP) Japan investors sold ¥1.2T in foreign bonds last week v ¥116B bought in prior week ...

The last couple weeks were wrapped in bright economic reports from the U.S economy, but truthfully, the weekly jobless claims were too good to be true, particularly after we watched the number of Americans filing for unemployment insurances falling by 19 thousand to 366 thousand in the week ended December 10, the lowest level since May 2008, while the four-week average was lower by 6.5 thousand to 387.75 thousand, the lowest since July 2008. Figures from the U.S Department of Labor may show that that initial jobless claims for the week December 17 week gained about 12 thousand to 380 thousand, while the continuing claims for the December 10 week may have added a slender 3 thousand to 3600 thousand, for sure, the labor markets are still battling to seek full stability though unemployment ...

Forex News and Events: FX markets were very quiet yesterday with closes to zero data or news stories to spark any kind of directional volatility. Without any real drivers, FX pairs just bounced around with flows on the light side. Overnight, EURUSD ranged between 1.2994 and 1.3020 for most of the session while AUDUSD roamed around 1.3010 handle. News agencies tackled the death of Kim Jong-Il with as much zeal as they could muster, but with little spillover effect into the financial markets. Kim Jong Il's youngest son, Kim Jong Un, was later named and praised by North Korea's official news agency KCNA as "the outstanding leader of our party, army and people". Initially there were some worries of instability and generally fears of a disorderly succession, as missiles were reported to have ...

Fundamental Analysis EUR "The losses are enormous" - Jacques-Pascal Porta, fund manager at Ofi Gestion Privee Credit Agricole SA, France’s second largest bank by assets, will make losses in 2011, write of 2.5 billion euros worth of assets and cut approximately 2,350 jobs as European debt crisis looms. Fitch and Moody’s downgraded the company’s credit rating this month. USD "Inflation will crest around here. This will give the Fed more comfort in terms of implementing further monetary policy" - Jacob Oubina, a senior U.S. economist at RBC Capital Markets LLC U.S. month on month consumer prices stagnated in November after declining 0.1 per cent in October, said the Bureau of Labor Statistics on Friday. Prices were little changed as gasoline and food prices dropped, supporting the ...