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Interest Rate DecisionTitle:
European Market Update : 24/05/2012
Major European PMI Manufacturing data misses expectations; German IFO Business Confidence falls for the first time in 7 months
Economic Data
(RU) Russia Gold & Forex Reserve w/e May 18th: $514.3B v $518.8B prior
(DE) Germany Q1 Final GDP Q/Q: 0.5% v 0.5%e; Y/Y: 1.7% v 1.7%e; GDP WDA Y/Y: 1.2% v 1.2%e
(DE) Germany Q1 Private Consumption: 0.4% v 0.2%e; Government Spending: 0.2% v 0.3%e; Domestic Demand: -0.3% v 0.0%e; Capital Investment: -1.1% v -0.3%e; Construction Investment: -1.3% v -0.4%e; Exports: 1.7% v 0.9%e; Imports: 0.0% v 0.3%e
(CH) Swiss Apr Trade Balance (CHG): 1.3B v 1.9Be; Real Exports M/M: -0.9% v +0.2%e; Real Imports M/M: 2.6% v 5.9% prior
(FI) Finland Apr PPI M/M: -0.1% v +0.4% prior; Y/Y: 1.4% v 1.4% prior
(FI) Finland Apr Preliminary Retail Sales Volume Y/Y: -2.0% v ...
Title:
Markets vs. Technocrats
Forex News and Events:
Over the past few days, the media has been relaying comments suggesting leaders are backing the stay of Greece in the EMU. For starters the G8 stressed the importance for Greece to remain in the monetary union regardless of the discord over how to best tackle the crisis. During an interview with CNBC on Tuesday, former Greek PM insisted that an exit would yield “catastrophic” consequences for the country itself and “far reaching” implications for the EU. During yesterday’s European session however, EU officials stated they have agreed over a teleconference call with Eurogroup Work Group (EWG) that each nation in the EMU must prepare an individual contingency plan in case of an exit. The EUR sank against the USD to its lowest level since July 2010 at 1.2544, down 5. ...
Title:
EUR/USD Cedes The 1.2624 Support
Sunrise Market Commentary
- Fixed Income: Risk off pushes German bond yields to new lows
- Risk off sentiment pushed core bonds higher and non-core bond yield spreads re-widened substantially. The Summit didn't bring new information, but another hole found in Spain's regions' budgets might get attention today.
- Currencies EUR/USD cedes the 1.2624 support
- On Wednesday, the EMU debt crisis was again omnipresent. Markets feared that the EU leaders wouldn't be able to take decisive action to address the debt crisis. Extreme risk aversion pushed EUR/USD to a new low for 2012. The losses of EUR/GBP were more contained, as poor UK retail sales and rather soft BoE minutes kept the door open for more policy stimulation.
The Sunrise Headlines
- In the final hour of trading, US ...
Title:
Euro sinks to 21-month low as Greek exit fears rise
(Reuters) - The euro plunged to a 21-month low against the dollar on Wednesday as investors dumped the currency on growing fears of a Greek euro zone exit and widespread doubts about the outcome of an EU summit later in the day.
EU leaders are expected to discuss growth-boosting measures but are not expected to produce any plan that would restore optimism among investors, especially given Germany's strong opposition to joint euro bonds.
Investors are doubtful that the leaders will come up with any measures to calm fears that have grown since an inconclusive Greek election earlier this month left the country on the path to bankruptcy and a possible exit from the euro zone.
"The whole problem of Greece, of fiscal retrenchment in the euro zone, the lack of growth across the region, and the ...
Title:
Euro drops to 21-month low as break up risks mount
(Reuters) - The euro fell to a 21-month low against the dollar on Wednesday as investors added to bearish bets on growing concerns about a chaotic Greek exit and widespread skepticism about the outcome of an EU summit due later in the day.
EU leaders are expected to discuss growth-boosting measures but are not expected to produce any plan that would restore optimism among investors, especially given Germany remains strongly opposed to joint euro bonds.
Investors are doubtful that the leaders will come up with any measures to calm fears that have grown since an inconclusive Greek election earlier this month left the country on the path to bankruptcy and a possible exit from the euro zone.
The euro fell to $1.2615 on trading platform EBS, dropping below the 2012 low of $1.2624 set in ...
Title:
Will Greece Leave or Not?
We have heard conflicting information about Greece over the last 24 hours: first we heard that Greece was making plans to leave the Eurozone from former Prime Minister Papademos, which was denied. Then this morning reports from a German newspaper suggested that the ECB had set up a task force (tucked away in a bunker) working on the potential fallout from a Greek exit. It's likely that we will get these conflicting headlines between now and the end of the EU summit, which starts this evening at 1800 BST.
The markets' seemed to like the idea of an Avengers - style ECB working to combat the negative effects if Athens goes to the wall, and the euro bounced from its lowest level since 2010 earlier. But the real test will be the outcome of today's summit. So what should we expect and, ...
Title:
Fitch Fires Another Round
Forex News and Events:
Fitch downgraded Japan by two notches yesterday afternoon from AA to A+ with outlook negative. The agency justified the credit rating cuts by saying that the Japanese government isn’t reactive enough in tackling its “high and rising public debt ratios”. The move came in a few hours after the OECD urged Japan to prioritize the implementation of a fiscal consolidation plan, as debt-to-GDP ratio exceeds 200 percent, and budget deficits are forecast at 10 percent of GDP for the current year. PM Yoshihiko Noda has staked his political career on a law to increase sales tax to 10% with the goal of offsetting rising social security costs mainly due to the fast ageing of the population. But the opposition that controls the upper house is refusing to negotiate and is ...
Title:
European Market Update : 23/05/2012
Euro hits fresh 2012 lows ahead of informal summit; More reports of an ECB contingency plan in the works
Economic Data
(GR) Greece Mar Current Account: -€2.1B v €1.1B prior
(NL) Netherlands Mar Consumer Spending Y/Y: % v -1.3% prior
(SE) Sweden Apr Unemployment Rate: % v 7.8%e
(EU) Euro Zone Apr Current Account: +€7.5B v -€5.6B prior; Current Account Seasonally Adj: +€7.5B v -€1.2B prior
(IT) Italy May Consumer Confidence: 86.5 v 89.5e (lowest reading on record after series began in 1996))
(ZA) South Africa Apr CPI (all items) M/M: 0.4% v 0.5%e; Y/Y: % v 6.2%e
(TW) Taiwan Apr Industrial Production Y/Y: -2.3% v -1.7%e; Commercial Sales Y/Y: -2.4% v -0.9% prior
(UK) Apr Retail Sales Ex Auto Fuel M/M: -1.0% v -0.7%e; Y/Y: -0.3% v +0.7%e
(UK) Apr Retail Sales with Auto Fuel M/M: -0.8% ...
Title:
Japan Policy On Hold, Eyes On BoE Minutes
The euro (EUR) dropped near a 21-month low falling to 1.2645 from 1.2814 against the US dollar as risk aversion dominates the markets. Comments from former Greek Prime Minister Lucas Papademos raised concerns after he said that Greece has two options, stick to a painful austerity program or face a damaging default and a messy exit from the eurozone. Focus now turns to today’s informal EU summit where France is expected to push a proposal of joint eurozone bonds. The idea of joint bonds can help with funding difficulties for some heavily-indebted eurozone countries but that policy has been rejected by Germany before. EU leaders are also expected to focus more on growth and ways to help Greece stay in the euro.
The US dollar (USD) strengthened against a basket of currencies as fears of a ...
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