Markets Are More Optimistic About Greece

EU leaders call on Greece to work harder, June meeting to provide more details on measures; China flash PMI contracts again Thu, 24 May 2012 1:41 AM EST Economic Data (CN) CHINA MAY HSBC FLASH MANUFACTURING PMI: 48.7 V 49.3 PRIOR FINAL (7th consecutive contraction) (NZ) NEW ZEALAND APR TRADE BALANCE (NZ$): 355M V 400ME (11-month high); TRADE BALANCE YTD: -541M V -651ME (NZ) NEW ZEALAND ANNUAL BUDGET RELEASE: AFFIRMS TARGET OF RETURNING BUDGET TO SURPLUS IN 2015 (AU) AUSTRALIA Q1 CBAHIA HOUSE AFFORDABILITY: 61.8 V 58.5 PRIOR (JP) JAPAN BOJ MONTHLY ECONOMIC REPORT: Increasingly Evident Japan Economy Is Shifting To Pickup (KR) SOUTH KOREA Q1 HOUSEHOLD CREDIT Y/Y: +7.0% V 7.8% PRIOR (lowest level since Sept 2009) (VN) Vietnam May CPI m/m: 0.2% v 0.1% prior; y/y: 8.3% v 8.9%e (JP) ...

Oil prices slipped below $107 a barrel on Friday and hit a 2012 low as investors fought shy of riskier, growth-oriented assets on fears that Greece would leave the euro, and after a downgrade of 16 Spanish banks by Moody's added to the contagion gloom. Brent crude was down 51 cents to $106.98 a barrel by 1122 GMT after earlier slipping to its lowest level for the year at $106.40. U.S. crude was up 16 cents to $92.72. "The driving factor is still what is going on in Europe with the downgrades of the Spanish banks and very negative sentiment towards risk investments," said Eugen Weinberg, an analyst at Commerzbank in Frankfurt. "It's not surprising to see further falls in Brent today." The euro fell to fresh four-month lows as the dollar strengthened .DXY, putting commodities priced in ...

Brent crude slipped below $107 per barrel on Friday to its lowest in 2012 as a worsening euro zone crisis and weak U.S. economic data raised fears of a global slowdown that could dent oil demand. Worries about the euro zone, already roiled by Greek political chaos, mounted as Spain slipped into a recession, pushing the euro to a four-month low while sluggish data out of the United States sent worrisome signs about a still-fragile recovery at the world's largest economy and top oil consumer. Brent crude was down 64 cents to $106.85 by 2:47 a.m. EDT after slipping to its lowest level for the year at $106.40. Front-month Brent is on track to post its largest three-week fall since May 2011. U.S. crude was down 58 cents to $91.98, heading for its largest three-week fall since August 2011. " ...

Brent crude held steady above $107 per barrel on Friday, but prices were headed for a third straight weekly drop as a worsening euro zone crisis and weak U.S. economic data raised fears of a global slowdown that could dent oil demand. Worries about the euro zone, already roiled by a Greek political chaos, mounted as Spain slipped into a recession, while sluggish data out of the United States sent worrisome signs about a still-fragile recovery at the world's largest economy and top oil consumer. Brent crude edged up 7 cents to $107.56 a barrel by 11:34 p.m. EDT after slipping to as low as $106.62. Front-month Brent is on track to post its largest three-week fall since May 2011 after settling at the lowest level in 2012 on Thursday. U.S. crude inched up 3 cents to $92.59, but is still ...

Stocks fell on Monday as investors dealt with the one-two punch of worsening political upheaval in the euro zone and the possibility that China's economy may be softening more than previously thought. The S&P 500 finished lower for the fourth day of five to close at its lowest level since February, adding fuel to worries of a coming market correction. Economically sensitive shares, including banks and energy companies, paced the decline. Exxon Mobil Corp (XOM.N) lost 1.2 percent to $82.12. The NYSEArca oil index .XOI fell 1.8 percent. State television in Greece reported the president of the fiscally beleaguered country will continue talks on forming a coalition government, although Socialist leader Evangelos Venizelos said on Monday he was not optimistic that a government could be ...

The Week Ahead ■The Bank of England's next move ■Is this the beginning of the end for the Eurozone? ■Fed officials reluctant to signal more easing ■Broader risk environment outweighs Japanese rhetoric The Bank of England's next move The BOE kept rates on hold when it concluded its May meeting last week; it also allowed the asset purchase program to come to an end. Since the UK slipped back into recession in Q1 2012 and the growth figures at the start of the second quarter have continued to look weak, the decision to hold interest rates was mostly down to the sticky outlook for inflation. The attention now turns to Wednesday's Inflation Report. The focus will be on the Bank's growth and inflation forecasts. The growth forecasts are likely to be revised lower. Even ...

This is the fifth day without a firm government in place for Greece; if a coalition is not found soon then we could be heading back to the polls, which open up the possibility of a prolonged period of Greek political instability. There was some hope this morning of the Conservatives forming a coalition with the Socialists and other moderate pro-bailout parties that would have a mandate to govern until 2014. This helped to lift the euro from its daily lows; however for a sustained rally in risk we need to get a firm commitment that a 'moderate' pro-European government will take the reins of power in Athens. Unless that happens then the markets are likely to remain jittery. Mixed signals The markets are particularly cloudy today. Some bullish reversal patterns that formed yesterday were ...

The euro dropped broadly on Monday after elections in Greece and France cast doubt on politicians' commitment to austerity plans aimed at tackling the euro zone debt crisis. Renewed fears about the stability of the euro zone made the common currency pierce the key psychological level of $1.30 on its way to hitting a three-month low against the dollar in the overnight session. Technical support helped pare losses during New York trade, though the single currency looked likely to remain under pressure in days ahead. The biggest blow to the common currency was the Greek election, in which the two main parties that support the nation's international bailout failed to secure a parliamentary majority. This threw into question the future of the program and potentially the country's membership ...

Sunrise Market Commentary - Fixed Income Weak US payrolls push core bonds higher again - On Friday, it was weaker US payrolls that helped core bonds eke out more gains, but non-core bonds held up quite well. Spreads even narrowed in the intra-EMU bond markets. We fear that this won't be the case today, as French and Greek election results inject uncertainty into markets. - Currencies: Euro testing key support levels - On Friday, trading in the major euro cross rate was rather calm, but the pressure remained to the downside. The US payrolls were unable to change this pattern. This morning, EUR/USD is testing the key 1.2974 support while EUR/GBP is trading south of the 0.8068 level. A sustained break below these levels would raise a red alert for the single currency. The ...