Purchasing Power Parity

(Reuters) - The euro hovered just above its 22-month low against the dollar on Thursday and remained vulnerable to further declines as the prospect of a Greek exit from the euro zone kept investors on tenterhooks. The euro eased 0.1 percent to $1.2575. It fell to about $1.2545 the previous day, its lowest level since July 2010. That level should provide initial support, followed by $1.2500. The euro drew little comfort from an informal summit of European Union leaders that shed no new light on how the euro zone nations intend to tackle its debt crisis, including the threat of Greece's exit from euro. "It's still hard to see what the endgame will be like," said a trader at a Japanese bank in Tokyo. European Union leaders urged Greece to stay the course on austerity and complete the ...

MORNING BRIEFING: No News is good News, or? What’s new: Asia: Awaiting news from Greece and potential spill-over effects. JPY offered on speculation that BoJ will add stimulus to boost growth. United States: Risk aversion moved flow from stocks to treasuries. 10yr generic fixed income futures in all-time highs at 133-27. USD weak on Friday. G8: Another round of talk, but no action on Greece. Europe: Slightly negative across the board in stocks. Only Spain managed to recover some of the losses, closing up 0.4%. EUR/USD re-visiting 1.28+ this morning. Rates in Asia and Indices: EUR/USD 1.2742 1.2813 -0.04 % USD/CHF 0.9375 0.9422 -0.07 % GBP/USD 1.5795 1.5839 -0.02 % USD/JPY 79.03 79.31 -0.34 % EUR/CHF 1.2010 ...

Fundamental Analysis EUR "Once we hit the 6.5 per cent mark , the alarm bells will go off loudly in Brussels and more rhetoric will be coming from the European Central Bank" - Adrian Miller, a global markets strategist at GMP The rating agency Standard & Poor’s has downgraded Spain’s credit rating by two notches to BBB-plus with a negative outlook from A, citing expectations the government finances will deteriorate. USD "While the economy continued to grow in the first quarter, the expansion remains modest in pace and subpar from a historical perspective" - Jim Baird, chief investment strategist at Plante Moran Financial Advisors The U.S. economy grew at a slower pace than forecast in the first quarter as businesses cut on investment. Gross domestic product increased at a 2.2 per cent ...

Fundamental Analysis EUR Spain's credit rating was lowered by Standard & Poor's for a second time in 2012 on enduring worries the nation will have to apply additional fiscal backing to lenders as the economy shrinks. S&P cut its long term grade for Spain from A to BBB+ adding a negative outlook. Country's short term rating was lowered from A-1 to A-2, S&P agency reported on Thursday. USD Crude oil price declined from almost 4-week high in New York trade after S&P ratings agency cut Spain's sovereign credit rating, boosting concerns that further recession in Europe may halt demand for crude. Oil to be delivered in June lost USD 0.61, reaching USD 103.94 a barrel. June Brent oil gave up USD 0.49 and traded at USD 119.43 a barrel. GBP Today the Great Britain Pound extended its gains ...

Fundamental Analysis EUR Deutsche Bank, the German biggest lender posted a 33% drop in its first quarter profit, citing debt crisis as a negative force that curbed trading. Net income declined to EUR 1.38 billion (USD 1.82 billion) compared to EUR 2.06 billion in the same period last year. Economists questioned by Bloomberg expected the profit to decrease less to EUR 1.56 billion. Deutsche Bank shares have added 16% this year. USD Crude oil fluctuated close to a one-week record high as Fed claimed they expect the economic growth to advance, encouraging the speculation that fuel demand will increase. Moreover Iran announced it may stop its nuclear expansion. June crude traded at USD 104.07 a barrel after climbing USD 0.57 yesterday. Brent oil to be delivered in June traded at USD 119 a ...

Fundamental Analysis EUR "There’s a bit of risk back on after some positive company numbers helped stocks and improved the tone of the markets" - Eric Wand, a fixed-income strategist at Lloyds Banking Group Plc Demand for Spanish and Italian debt rose, pushing Spanish and Italian bonds higher, as investors turned to higher-yielding assets after companies from Apple to Swedbank reported better than forecast earnings. USD "The committee expects economic growth to remain moderate over coming quarters and then to pick up gradually" - Federal Open Market Committee U.S. durable goods orders tumbled below forecast in March, a sign the manufacturing sector may be losing momentum. Bookings for long lasting goods dropped 4.2 percent, said the Commerce Department on Wednesday. GBP " could be ...

Fundamental Analysis EUR "Equities are stronger than in the fall, as central banks have moved to support the market with liquidity and removing the structural risks to banks" - Hans Peterson, the chief investment officer of SEB Private Bank Industrial new orders in the euro zone declined by more than forecast in February, Eurostat data showed on Tuesday. Orders decreased by a seasonally adjusted 1.3 per cent, after declining 2.9 per cent in January. USD "Overall, consumers are more upbeat about the state of the economy, but they remain cautiously optimistic" - Lynn Franco, director of the Conference Board Consumer Research Center U.S. consumer confidence declined in April as consumers became slightly less optimistic on the outlook of the country’s economy, the Conference Board Inc. ...

Dukascopy Fundamental Analysis EUR Dutch Premier Mark Rutte offered his minority coalition's resignation after his cabinet lost backing from Freedom Party caused by disagreements over deficit cut plans. The Freedom Party supported PM Rutte for about 18 months. Political uncertainty in the Netherlands cause boost concerns across whole Europe as the Netherlands was one of the nations than strongly favoured European Union fiscal treaty and in case of political collapse may turn to less EU-supportive policies. USD S&P/Case-Shiller 20-city composite index dropped to its lowest level since 2002, representing the cheapest house prices in a decade. Among 20 cities observed in the index, in 16 house prices have contracted while only three showed an increase. GBP Great Britain reported a bigger ...

Fundamental Analysis EUR "Today's dismal PMI figures clearly indicate that the euro zone economy remains in dire straits" - Martin Van Vliet, senior economist at ING The euro zone’s manufacturing contracted in April, a sign the economy is far from out of the woods. The purchasing managers index declined to 47.9 from 49.2 in March, Markit data showed on Monday. Reading below 50.0 indicates industry contraction. USD "There’s more work to be done in Europe" - Mark Bronzo, a fund manager at Guggenheim Investments U.S. stocks declined after data showed that manufacturing contracted in the euro zone. GBP "Political developments in Europe are weighing on indices" - Rupert Osborne, a futures dealer at IG Index U.K. stocks declined sharply on Monday after manufacturing in the single currency ...