Spread Of Contagion To Highly

(Reuters) - Uncertainty over the fate of the euro currency is already dampening U.S. economic growth and any significant worsening of the crisis would deal a blow to a recovery that is gradually gathering steam. Economists estimate that volatile markets and business uncertainty over the fate of Greece and the policy course in Europe is already shaving anywhere from one tenth to one half a percentage point from U.S. 2012 gross domestic product growth. In a Reuters poll last week, U.S. GDP was forecast on average at 2.3 percent for 2012 and 2.4 percent for 2013. The direct hit to growth comes through trade. U.S. exports to the European Union account for 19 percent of total exports, and those to the euro zone represent 13 percent of the total. But when calculated in terms of GDP, the share ...

(Reuters) - Asian shares eased on Thursday as markets were vulnerable to faltering factory orders in China and lack of concrete measures shown by European leaders to tackle the risk of Greece leaving the currency bloc. European Union leaders, at an informal meeting on Wednesday, said they wanted Greece to stay in the euro zone while respecting commitments it had made in return for its bailout, but have been advised by senior officials to prepare contingency plans in case Greece exits. The murky outlook for the euro zone and fears that the crisis could derail the global economy have prompted investors to park money in safe-haven assets such as U.S. and German government bonds, the U.S. dollar or cash. Implications of a retreat in China's HSBC Flash Purchasing Managers Index, the earliest ...

Highlights - An acceleration in deposit withdrawals, combined with the prospect of an anti-austerity party winning the next election, has brought to the fore concerns about a potential Greek exit from the euro zone. - Our base case assumption is that under the most likely scenario, the Greek election will lead to a government that sticks to an EU/IMF program, even if the terms are renegotiated. - However, we do believe that Greece needs a further restructuring of its debt and we do think the country will ultimately exit the euro - we're just not convinced that Europe is ready for this to happen at the moment. - If an accident does occur and Greece does leave the euro in the near term, it would have global financial ramifications that could range from severe to catastrophic. ...

Sunrise Market Commentary - Fixed Income: Global core bonds take a breather - Investors remained mostly sidelined in an uneventful session on Friday. The G-8 meeting stressed the need for growth, besides fiscal consolidation and sees Greece staying inside EMU. This shouldn’t surprise markets today. With a razor thin calendar, trading might start the week in a lackluster mode. - Currencies: Euro succeeds short squeeze - On Friday, the decline of the euro halted and EUR/USD succeeded a cautious rebound, even as uncertainty on the EMU debt crisis persisted. Technical considerations will also dominate trading today as the G8 meeting provided no high profile measures to address the debt crisis. The Sunrise Headlines - US Equities rose for a second consecutive session on ...

Brent crude slipped to a near four-month low on Thursday as investors shunned riskier assets following turmoil in Greece and the euro zone, while oil supplies could rise as G8 countries may tap emergency reserves ahead of sanctions on Iran in July. Greece faces a possible exit from the euro zone as it failed to form a government to implement austerity measures in exchange for rescue funds from the common currency region. Investors feared Greece's exit could drag down other EU economies. Brent crude for July was down 42 cents at $109.33 by 0453 GMT, after slipping to $109.01, the lowest intraday price since January 25. U.S. crude gained for the first time in five sessions, rising 53 cents to $93.34. "The euro zone crisis can only go one way, that is, Greece leaving the EU on a temporary ...

Gold eased below $1,560 an ounce on Tuesday after the failure of Greek politicians to form a government sent the single European currency to four-month lows and unnerved investors over the profitability of holding euro-denominated assets. With gold's decline to its lowest since late December, consumers in top purchasing-nations such as India have delved into the market, which analysts said could protect the bullion price from a more protracted decline. Gold remains vulnerable, however, as worries over the euro zone's future simmer in the background, keeping the single currency under pressure. Spot gold was down 0.1 percent at $1,555.69 an ounce at 1350 GMT, while U.S. gold futures for June delivery were down $8.70 an ounce at $1,552.10. Gold earlier hit its lowest since December 30 at $ ...

Concerns are still predominate despite upbeat announcements from euro area officials, eyes to track Italian bond selling Despite the efforts done by European officials to ease the debt crisis, it seems that a lot of reforms from the euro area's highly indebted nations are needed to pass to the safe side. Still, there are worries in markets after the rise in Spanish 10-year bond yields to 6 percent yesterday, coming close to levels which forced Greece, Portugal and Ireland to ask for international bailouts. Later in the day, investors will focus on Italian bond selling of three-year notes after yesterday's auction showed a sharp rise in borrowing cost. Italy sold 11 billion euros of bills on Wednesday, where the government borrowed 8 billion euros from the 361-day bonds with a surge in ...

Another mixed and volatile week has come to an end with renewed fears and widely spread recession-concerns pressuring the European common currency and sterling pound to the downside, but both currencies were able to end the session mixed on hopes European finance chiefs will expand the capacity of the European firepower next week, in effort to overcome the debt crisis and prevent the contagion from reaching highly indebted weak nations such as Spain. The European currency fluctuated heavily this week with the lack of major and critical macroeconomic fundamentals from the euro zone and Germany; however, on Thursday the euro slipped sharply to the downside and cut all the gain recorded during the week on fears Europe is not on the right track of recovery, but instead the old continent might ...

(Reuters) - Shares struggled but the euro recovered on Thursday, as markets were left without a clear direction after Greek political leaders failed again to conclude a deal for a bailout package, which Athens needs to avoid a messy debt default. Talks would continue with one issue left to be resolved, so a deal could be concluded before a meeting of euro zone finance ministers on Thursday, Prime Minister Lucas Papademos said in a statement. Greek officials said pension cuts were the sticking point. Greek political leaders agreed to cut the minimum wage by 22 percent but managed to prevent holiday bonuses from being scrapped. MSCI's broadest index of Asia Pacific shares outside Japan .MIAPJ0000PUS trimmed earlier losses to stand nearly flat at 445.95, after climbing to a six-month high ...