International Pressure To Abandon

Highlights - An acceleration in deposit withdrawals, combined with the prospect of an anti-austerity party winning the next election, has brought to the fore concerns about a potential Greek exit from the euro zone. - Our base case assumption is that under the most likely scenario, the Greek election will lead to a government that sticks to an EU/IMF program, even if the terms are renegotiated. - However, we do believe that Greece needs a further restructuring of its debt and we do think the country will ultimately exit the euro - we're just not convinced that Europe is ready for this to happen at the moment. - If an accident does occur and Greece does leave the euro in the near term, it would have global financial ramifications that could range from severe to catastrophic. ...

Brent crude held steady above $109 on Thursday, supported by a rebound in U.S. oil prices on hopes that a reversal in oil flow for the Seaway pipeline will reduce a supply glut in the U.S. Midwest. Investors cast aside worries about higher oil supply and the euro zone crisis that have dogged the market for the past few weeks and bought U.S. crude futures, allowing the front-month contract to rebound for the first time in five sessions. West Texas Intermediate (WTI) crude was up 61 cents to $93.42 by 0641 GMT, after rising to an intraday high of $93.72. Brent crude for July edged down 21 cents to $109.54 but recovered from a low of $109.01, the lowest intraday price since January 25. Brent-WTI spread for July also narrowed to $15.74 after widening to $19.46 on Wednesday, the widest ...

Brent crude slipped to a near four-month low on Thursday as investors shunned riskier assets following turmoil in Greece and the euro zone, while oil supplies could rise as G8 countries may tap emergency reserves ahead of sanctions on Iran in July. Greece faces a possible exit from the euro zone as it failed to form a government to implement austerity measures in exchange for rescue funds from the common currency region. Investors feared Greece's exit could drag down other EU economies. Brent crude for July was down 42 cents at $109.33 by 0453 GMT, after slipping to $109.01, the lowest intraday price since January 25. U.S. crude gained for the first time in five sessions, rising 53 cents to $93.34. "The euro zone crisis can only go one way, that is, Greece leaving the EU on a temporary ...

The euro remained under pressure against the US dollar throughout yesterday's trading session, as investors remained cautious regarding Greece's financial situation. The EUR/USD spent much of the day range trading around the 1.3225 level after failing to break above key resistance lines the day before. Today, traders will want to pay attention to the weekly US Unemployment Claims figure. A better than expected result may result in the euro falling further against the greenback. Economic News USD - US Unemployment Claims May Generate Volatility Today The US dollar saw gains virtually across the board yesterday, as the combination of a number of international factors resulted in investors reverting to the greenback. The USD/JPY extended its bullish trend, reaching as high as 80.37 before ...

In an attempt to increase the pressures on Tehran to abandon its nuclear program, UAE and Qatar asked lenders to stop financing trade with Iran. Meanwhile, U.S. Defense Secretary Leon Panetta believes Israel will attack Iran as early as April. Iran lost another credit source after the central banks of UAE and Qatar asked lenders on Thursday to stop financing trade with Iran, which is added to the economic sanctions imposed on Tehran over its nuclear program. “About 8,000 Iranian traders are registered in Dubai, and re-export trade between Iran and the UAE totaled 19.5 billion dirhams ($5.32 billion) in the first half of 2011, according to the latest figures from United Arab Emirates' customs authority”, said Reuters. The EU foreign ministers decided in January to impose an embargo on ...

Brent crude extended gains above $113 on Friday after data showed the U.S. economy created jobs at the fastest pace in nine months in January, spurring hopes this could stimulate demand at the world's top consumer. A warning by Iran's supreme leader of retaliation over an oil embargo "at the right time" also supported oil prices. By 1440 GMT, front-month Brent crude was up $1.63 at $113.70 a barrel, gaining for a fourth consecutive day. U.S. crude rose by 64 cents to $97.00 a barrel, reversing five straight sessions of losses. U.S. nonfarm payrolls jumped by 243,000 versus expectations for a gain of only 150,000 in January. U.S. unemployment rate also dropped to a near three-year low of 8.3 percent, indicating last quarter's growth carried into early 2012. "The jobs number came much ...

Brent crude rose above $112 on Friday as Supreme Leader Ayatollah Ali Khamenei warned that the Iran would retaliate over an oil embargo "at the right time". Khamenei said Tehran would not yield to international pressure to abandon its nuclear program. "Sanctions will not have any impact on our determination to continue our nuclear course ... In response to threats of oil embargo and war, we have our own threats to impose at the right time," Khamenei told worshippers in a speech broadcast live on state television. By 4:46 a.m. ET, front-month Brent crude was 33 cents up at $112.40 a barrel, gaining for a fourth consecutive day. U.S. crude rose by 50 cents to $96.86 a barrel, reversing five straight sessions of losses. "This newsflow should continue to build a Brent premium, and could ...

Conviction is a vital element in sustaining market and political confidence and this will be a pivotal week ahead for Euro-zone faith following another day of torture on Friday. Standard & Poor’s decision to downgrade France and Austria can hardly have been a surprise as markets have been on high alert for the announcement throughout the past few weeks, but there will still be important implications at the economic and political level as the cost of Euro-zone support continues to increase. Market talk will focus on the risks of a further escalation of the Euro crisis, although it is doubtful whether selling offers immediate value at current levels. The decision will increase political pressure in both France and Germany while the EFSF will find it even more difficult to attract funds ...

Fundamental Analysis EUR "Can the euro be saved without more active engagement from the ECB? Quite frankly we think no" - David Riley, the head of sovereign ratings at Fitch The European Central Bank should boost its bond purchasing programme to support the third largest euro zone economy, Italy, and avert a “cataclysmic” collapse of the euro, said David Riley, the head of sovereign ratings at Fitch, on Wednesday. USD "There is a natural tendency for policymakers to pull back on accommodation too early before the real rate of interest has fallen to low enough levels" - Charles Evans, Chicago Fed President The U.S. Federal Reserve should keep interest rates near zero to combat high unemployment and help the economy to recover, said Fed’s top official on Wednesday. GBP "Trade is ...