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Wall Street to slide, S&P 500 faces key test
U.S. stock index futures fell sharply on Monday, tracking global equity markets lower as a political impasse in Greece heightened concerns about the Europe's debt crisis as the region struggles to avoid a deepening recession.
Greece's political landscape has been in disarray for a week since an inconclusive election left parliament divided between supporters and opponents of the 130 billion euro ($168.3 billion) EU/IMF bailout, with neither side able to form a government.
The general move out of risky assets, such as equities and commodities, was likely to see the S&P 500 retest an important support level at 1,340 which, if broken, could result in a steeper pullback for the index.
"The world markets are all sharply lower on mounting fears over euro land, Europe's potentially steepening ...
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China’s growth engine cooling down
Forex News and Events:
As anticipated in Friday’s newsletter, China cut its Reserve Requirement Ratio for the second time this year. Shielded by easing inflation, Chinese authorities relaxed their grip on banks’ cash reserves parked at the PBoC through a 50 basis point cut effective starting May 18. This measure will allow the RRR to drop to 20% for the main national financial institutions and will release an estimated CNY 400bn in capital into the market. The move came after the publication of a weaker-than-expected Chinese Trade balance on Thursday, indicating exports and imports grew by 4.9% and 0.3% y-o-y respectively, a far cry from the 10 and 11 percent goals for the year. The near-zero import growth could be explained by the piling up of metal domestic inventories and might affect ...
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Global shares, euro hit as political risks pile up
Uncertainty over the impact of a potential Greek exit from the euro on the debt-laden 17-nation currency bloc drove a rush to safety by investors on Monday, sending the single currency to near four month lows and European shares down 1.5 percent.
Problematic negotiations on forming a new Greek government have increased the chances it will be unable to meet the conditions of its bailout deal, and a worsening fiscal position in Spain has added to the sense of crisis facing the region.
The list of political risks facing the euro area grew on Sunday when German Chancellor Angela Merkel's conservatives suffered a crushing defeat in an election in Germany's most populous state.
"Selling rallies in risk assets seems the best way to make money in most asset classes given the event risk is still ...
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Riskier assets hit as Euro zone worries grow
The euro hit four month lows and shares fell on Monday as the increasing likelihood of a new election in Greece worsened the sense of crisis in the euro zone and China's latest move to loosen monetary policy only added to investor risk aversion.
The refusal of a major leftist party to join a new Greek government has brought the prospect of its exit from the euro a step closer. The region's finance ministers, gathering in Brussels, also face a worsening fiscal position in Spain.
Adding to the negative tone for the higher risk sector, German Chancellor Angela Merkel's conservatives suffered a crushing defeat on Sunday in an election in Germany's most populous state.
"Selling rallies in risk assets seems the best way to make money in most asset classes given the event risk is still very ...
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Greek woes drag euro to near 4-months lows; Aussie dips
The euro fell to a near four-month low on Monday as political uncertainty in Greece deepened, keeping alive the risk of the country exiting the euro zone while worries about slowing Chinese and global growth drove down higher-yielding currencies.
Safe-haven currencies like the U.S. dollar and the Japanese yen advanced as coalition talks in Greece hit an impasse on Sunday and Greece's radical leftist leader spurned an invitation from the president for a final round of talks on Monday, all but ensuring another election next month.
Adding to the bearish tone, German Chancellor Angela Merkel's conservatives suffered a crushing defeat on Sunday in an election in Germany's most populous state, a result which could embolden the left opposition to step up attacks on her European austerity ...
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YouTradeFX Weekly Market Analysis : 14/05/2012
Consumer sentiment in the U.S. rose to 77.8 in May from the final April reading of 76.4, according to a report released by Reuters and the University of Michigan on Friday. While, the Labor Department said on Friday that its producer price index fell by 0.2 percent in April. According to Bloomberg news, Sales at U.S. retailers probably slowed in April as the weather turned more seasonable and consumers took a breather following a pre-Easter holiday buying spree, economists said before a report this week. The projected 0.2 percent gain in purchases would follow a 0.8 percent advance in March, according to the median forecast of 68 economists surveyed by Bloomberg News ahead of Commerce Department figures on May 15. Events in the U.S, likely to affect the markets this week are: Monday; a ...
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Nikkei edges up, China easing offset Greek turmoil
Japan's Nikkei share average inched higher on Monday as China's monetary easing countered unease ahead of Greece's last-ditch attempt to form a coalition government later in the day.
Gains in Kansai Electric Power Co (9503.T) also helped the index to stay in positive territory.
The Nikkei .N225 closed 0.2 percent higher at 8,973.84, holding below the psychological key 9,000-mark but holding above technical support at 8,945, the 61.8 percent retracement of its rally from November to March.
The broader Topix .TOPX index slipped 0.2 percent to 756.68.
Kansai Electric Power surged 5.6 percent after a local town assembly agreed to support the restart of two offline nuclear reactors.
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Brent slips towards $111 on euro zone worries
Brent crude slipped towards $111 on Monday, continuing to drop for a third straight session, after talks to form a new government in Greece failed, deepening the euro zone crisis and cutting fuel demand further.
Investors were cautious as a repeat Greek election will be needed if politicians cannot reach a compromise, pushing the debt-laden country closer to bankruptcy and likely driving oil prices southwards.
Brent crude had fallen 46 cents to $111.80 a barrel by 23:00 EDT (0300 GMT) after settling at $112.26 on Friday, its second straight weekly loss.
U.S. crude dropped 74 cents to $95.39, after earlier declining to a low of $95.17.
"The path of least resistance for oil is down, on sentiment on the euro zone and weak data from China on Friday," said Ben Le Brun, market analyst at ...
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Asia awaits Japan GDP and RBA minutes
Once again key data is set to be release from Asia and the main focus will be Japan and Australia. Japan’s Gross domestic product for the first quarter is due alongside the RBA minutes for the surprise decision that saw 50 bps rate cut.
The start will be on May 14 with the Reserve Bank of Australia minutes. The rapid developments in the Australian economy grabbed investors attention during the past period especially after the budget surplus that made the nation’s economy stronger and well prepared to resist any further global growth deceleration, also gave the chance to the RBA to act more freely with monetary policies.
Australia’s trade balance deficit widened in March more than expected to A$1587 million pressured by weaker mining production, and the mining boom has been the major ...
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