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Fragile euro holds above multi-month lows
(Reuters) - The euro edged away from a 3 1/2-month low against the dollar on Thursday as stress in Spanish debt markets abated slightly and after Greece secured funds needed for bond repayments, tempering the threat of a Greek insolvency and possible euro exit.
Greece averted an imminent funding crisis after the board of the European Financial Stability Facility agreed to a scheduled 5.2 billion euro ($6.72 billion) payment. However, impatient governments withheld part of the latest tranche of rescue funds to be paid to Greece on Thursday.
Ten-year Spanish government bond yields fell after Spain's government effectively took over Bankia, one of the country's biggest banks, in a bid to restore confidence in Spain's ailing banking system.
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Market Drivers - Currencies : 10/05/2012
Today's Comment
Greek election: Also the second largest party in Greece failed in obtaining a majority in order to form a government. The mandate has now been passed on to the third largest party, which is the last party that will be given the mandate. It now has three days to obtain a majority. It now becomes increasingly unlikely that it will be possible to form a government. A new election is no longer unrealistic. Yesterday a major European opinion poll showed that more than 50% of investors expect Greece to leave the euro at some point.
UK BoE interest-rate meeting: Several research institutes point out that due to the fact that the UK has slid back into recession, the BoE will initiate a new round of asset purchases (QE). Our macro-economists assess that due to the high inflation ...
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Crude oil tries not to decline
Crude oil is being so volatile at today’s session after huge losses achieved during the last six sessions, the EFSF played a significant role in easing tensions today after it approved to give Greece a 5.2 billion euro tranche which eased fears over the near-term outlook for the country.
After achieving huge losses, the door is open for crude to rise slightly and any small positive factor would support it and help it in climbing upwards. And we can see this in today’s trading which showing some positivity due to EFSF’s decision.
However, this optimism that seen in Europe is temporary and would be vanished soon if nothing major comes out, as the 5.2 billion euro tranche for Greece would let the country to meet its short commitments, but what it will do for the longer commitment if lenders ...
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Dukascopy Morning Forex Overview : 10/05/2012
Fundamental Analysis
EUR
"The real concern isn’t about Greece, it’s about the euro and whether it breaks up -- that is key."
- Mark Tinker, a fund manager at AXA Framlington Investment EUR Management
European stocks declined on Wednesday as investors awaited resolution of Greek coalition talks and yields on Spanish 10-year bonds rose above 6 per cent.
USD
"Certainly as a result of the elections in Greece, the odds of a default and an exit from the euro have increased."
- James Dunigan, chief investment officer for PNC Wealth Management
U.S. wholesale inventories rose in March at a slowest pace since November, Commerce Department data showed on Wednesday.
GBP
"Consumers, struggling to balance their household budgets, remain reluctant to spend..."
- Stephen Robertson, BRC director ...
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YouTradeFX Daily Market Analysis : 10/05/2012
Fundamental News
Today’s highlights:
- ECB Monthly Report (EUR, 09:00 GMT)
- Italian Industrial Production (MoM) (ITA, 09:00 GMT)
- Trade Balance +Manufacturing Production (MoM)+ Industrial Production (MoM) (GB, 09:30 GMT)
- Interest Rate Decision (GB, 12:00 GMT)
- Initial Jobless Claims + Trade Balance (U.S, 13:30 GMT)
- Trade Balance (CAD, 13:30 GMT)
- Fed Chairman Bernanke Speaks (U.S, 14:30 GMT)
Wholesale inventories in the U.S. rose by 0.3% (less than expected) in the month of March, according to a report released by the Commerce Department on Wednesday. Prices for single-family homes climbed in half of U.S. cities in the first quarter as real estate markets stabilized, the National Association of Realtors said in a report yesterday.
According to Bloomberg ...
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EUR/USD Continues to Tumble
The euro continued to tumble vs. its main currency rivals yesterday, as traders remained cautious about investing in riskier assets due to political uncertainty in the euro-zone. The EUR/USD fell to a fresh three-month low during the afternoon session at 1.2929. Turning to today, traders should be prepared for market volatility, as significant indicators from the UK and US are scheduled to be released. Attention should be given to the UK MPC Rate Statement, followed by the US Trade Balance figure and a speech from Fed Chairman Bernanke. Should any of the news lead to additional pessimism in the global economic recovery, riskier currencies like the euro may fall further.
Economic News
USD - Safe Haven Dollar Extends Gains amid Euro-Zone Worries
A lack of news events yesterday helped the ...
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Euro Extends Its Trip South As Speculation On Greek Exit Is Growing
Sunrise Market Commentary
- Fixed Income: Core bonds higher at first, but gave back gains in US session
- Fears about Greece and Spain continued to boost core bonds, but a rumours, later confirmed, that the EFSF would today disburse a tranche of the Greek bail-out loan triggered some correction and erased part of the German bond gains and almost all of the US ones. Today, the BoE decision on QE may affect overall bond markets.
- Currencies: euro extends its trip South as speculation on Greek exit is growing
- On Wednesday, trading on global markets was still dominated by negative headlines on Europe. This weighed on the euro. After all, the decline of EUR/USD developed in an orderly way even as several EMU policymakers pondered the option of a Greek exit. Today, the BoE holds ...
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A Mixed Session For Investors In Asia
Attention was momentarily drawn away from Europe by employment data out of Australia and then trade figures out of China, with the former printing better than expected and the latter disappointing the market. Following the data, price action was fairly range bound in the FX market as investors await the slew of news and data out of the UK and US tonight.
In Australia, data released early in the session showed that the unemployment rate dropped to 4.9% from 5.2% and employment increased by 15.5K, much better than the expected increase in the unemployment rate to 5.3% and a drop in employment of 5K. The participation rate also cooled at little, coming in at 65.2% versus a prior 65.4%.
Overall, the employment data bodes well for the health of the Australian economy this year. We were ...
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Asian Market Update : 10/05/2012
China trade data misses expectations, Australia records 1-yr low for unemployment
Economic Data
(CN) CHINA APR TRADE BALANCE: $18.42B V $9.9BE
(AU) AUSTRALIA APR UNEMPLOYMENT RATE: 4.9% V 5.3%E (1-yr low); EMPLOYMENT CHANGE: 15.5K V -5.0KE (2nd consecutive increase); PARTICIPATION RATE: 65.2% V 65.4%E
(KR) BANK OF KOREA (BOK) LEAVES 7-DAY REPO RATE UNCHANGED AT 3.25%; AS EXPECTED
(JP) JAPAN MAR CURRENT ACCOUNT TOTAL: ¥1.59T V ¥1.4TE; ADJUSTED CURRENT ACCOUNT TOTAL: ¥785.5B V ¥647BE; CURRENT ACCOUNT BALANCE Y/Y: -8.6% V 17.1%E; TRADE BALANCE: ¥4.2B V -¥43BE
(NZ) NEW ZEALAND APR BUSINESS NZ PMI: 48.0 V 53.8 PRIOR
(PH) PHILIPPINES MAR TOTAL EXPORTS: -1.2% V 11.0%E; TOTAL MONTHLY EXPORTS: $4.3B V $4.4B PRIOR
(NZ) NEW ZEALAND APR QV HOUSE PRICES Y/Y: 3.1% V 3.0% PRIOR
(JP) JAPAN APR ...
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