Maintain Ultra Loose

Consolidation Continues Post The Spanish Bond Auction The big event of the morning was the Spanish bond auction, however it failed to generate anything more than an immediate ripple in the FX market. The auction raised just below the top of its target amount of EU2.5bn, at EU 2.49bn. Although demand was strong, Madrid had to pay up to attract investors to its debt. The yield on the 2015 debt it sold jumped to 4.375% vs. 2.89% at an auction in April, the 2016 debt sold with a yield of 4.876% vs. 4.037% at an auction earlier this month. Will Germany soften its stance? In the aftermath, EURUSD is down about 20 pips but it remains above 1.27, while Spanish bond yields have actually fallen. The consolidation period in the market may continue as we lead up to the G8 summit in the US this ...

(Reuters) - The Bank of Japan is likely to ease monetary policy on Friday by boosting asset purchases by up to 10 trillion yen ($123 billion) and in doing so may extend the maturity of government bonds it targets to around three years, according to sources familiar with the central bank's thinking. The action, which would be the central bank's second easing in just over two months, would serve to show the BOJ's determination to overcome deflation and reach the 1 percent inflation target adopted at its February meeting. The central bank has been under constant pressure from politicians to do more to rev up the world's third biggest economy, and BOJ policymakers have signalled their readiness to provide more stimulus. But there is no consensus yet within the central bank on whether it ...

Sunrise Market Commentary Fixed Income: core bonds remain near contract highs Global core bonds reversed Tuesday's losses in a rather uneventful session. Today, all attention will go to the Spanish bond auction. A weak auction two weeks ago put pressure on Spanish yields since. The 10-yr yield flirts with the psychological 6% mark. In order to avoid more tensions, failure today is not an option. Currencies Sterling leaps higher on less dovish BoE Minutes While EUR/USD trading was rather uneventful, sterling was the star performer. Helped by less dovish BoE Minutes and a stronger labour market report, sterling shot higher pushing EUR/GBP below key support and GBP/USD above 1.60. The Sunrise Headlines US Equities dropped slightly lower on Wednesday, giving back part of ...

(Reuters) - German government bond yields hit their lowest level since September on Tuesday and European shares fell as investors returning from a long weekend switched to safer assets after surprisingly weak U.S. jobs data. The cost of insuring Italian and Spanish debt and their bond yields also climbed higher, reflecting the risk aversion and concerns about those economies. But U.S. stock markets, which digested the employment report on Friday when Europe was shut for Easter, were poised to end a four-session losing streak and open higher with attention turning to the start of the quarterly company reporting season. The concerns about growth in the world's largest economy also overshadowed positive trade numbers from Germany and China, with both nations enjoying strong rises in ...

Containing inflation will be critical when the time finally comes for the U.S. Federal Reserve to reverse its ultra loose monetary policy, two top Fed officials said on Thursday. With inflation hovering near the Fed's 2.0 percent target, the focus for U.S. policymakers has been kick-starting economic growth and lowering the 8.3 percent unemployment rate. Still, there are lingering concerns that the central bank's unprecedented actions have sown the seeds for a possible big jump in prices. "As always, we have to look at the inflation side and be comfortable that price stability will be maintained and that inflation will be low and stable," Fed Chairman Ben Bernanke told students at George Washington University. "Those are the things we'll be looking at. There's no simple formula but as ...

(Reuters) - Gold prices slid below $1,700 an ounce in Europe on Monday as weaker-than-expected euro zone economic data lifted the dollar versus the euro, and as appetite for assets seen as higher risk, like stocks and commodities, suffered after China set its lowest annual growth target in eight years. Spot gold hit a low of $1,693.99 an ounce and was down 0.9 percent at $1,697.09 an ounce at 1037 GMT, while U.S. gold futures for April delivery were down $11.20 an ounce at $1,698.60. Spot prices fell 3.9 percent last week, their worst weekly performance since mid-December, after Federal Reserve chairman Ben Bernanke gave no further hints, in a key speech, of a third round of quantitative easing in the United States. "Markets had really hoped for QE3, and that did create a plunge for ...

(Reuters) - Gold prices bounced back into positive territory on Tuesday, paring earlier losses in line with a rallying euro after a Greek official said the government is drafting an agreement on a second bailout. Spot gold was up 0.3 percent at $1,723.89 an ounce at 1502 GMT (10:02 a.m. EST), having earlier fallen as low as $1,709.29 an ounce, while U.S. gold futures for February delivery were up $1.70 at $1,726.60. A Greek government official said Greece's government is preparing the text of an agreement on a 130 billion euro bailout that will be put to political leaders for approval, suggesting Athens had largely wrapped up talks with lenders on the rescue. A conclusion to the discussions would likely to support gold, although it has struggled to maintain upward momentum as the ...

(Reuters) - Gold prices eased towards $1,710 an ounce on Tuesday in line with a softening euro as traders awaited a breakthrough on talks over a second bailout deal for Greece, with its leaders fighting to avoid a chaotic debt default. Spot gold eased 0.4 percent to $1,712.79 an ounce at 1210 GMT (7:10 a.m. EST), while U.S. gold futures for February delivery were down $10.20 at $1,714.70. While a retreat in stock markets and the euro kept gold under pressure on Tuesday, the precious metal still is up 10 percent so far this year after December's sharp drop, supported by a Federal Reserve pledge to maintain ultra-loose monetary policy. The euro eased 0.2 percent versus the dollar. For Greece, failure to secure the 130 billion euro ($170 billion) rescue would mean it faces a messy debt ...

Gold prices fell on Monday, extending the previous session's 2 percent price drop, as concerns over the progress of Greek bailout talks weighed on the euro and on assets seen as higher risk, such as stocks and commodities. Spot gold was down 0.5 percent at $1,716.44 an ounce at 1442 GMT, while U.S. gold futures for February delivery were down $21.10 an ounce at $1,719.20. The precious metal posted its worst daily performance of the year on Friday after better-than-expected jobs data dampened expectations of another round of U.S. monetary easing. It is still up nearly 10 percent this year, but if more signs emerge that the economy in the United States is recovering faster than the euro zone, pointing to an earlier-than-expected rise in U.S. interest rates and a stronger dollar, gold may ...