Stability Of The Entire Euro

Fundamental Analysis EUR Concern about Greece "is a big weight on the market and makes things uncertain" - Emmanuel Soupre, a fund manager at Neuflize Private Assets European stocks tumbled on Wednesday, after rising by the most in a month on Tuesday, on speculation Greece may exit the euro zone. USD "It’s very clear now that the housing market has turned a corner" - Richard DeKaser, deputy chief economist at Parthenon Group LLC Sales of new U.S. homes rose by more than expected in April, Commerce Department data showed on Wednesday. Purchases increased to an annual rate of 343,000, up by 3.3 per cent from a revised 332,000 in March. GBP " employment remains fragile and wage growth weak" - Ross Walker, chief U.K. economist at Royal Bank of Scotland Group U.K. retails sales declined by ...

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: limited profit taking on core bond markets - Global core bond markets fell prey to some profit taking in a thin, dull trading session. However, given the strength of equities, bond losses were very limited and occurred at the onset of trading. Today, the eco calendar remains thin and the profit taking might go some further in the run-up to tomorrow's informal EU Summit. - Currencies EUR/USD rebound on profit taking - The correction in EUR/USD was prolonged, but the euro gains were modest and mostly technical in nature. The UK inflation report is the eye-catcher of the day as it may influence sterling. However, overall trading might again be thin ahead of tomorrow's euro Summit. The Sunrise Headlines - US Equities rose for a second ...

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 ...

U.S. Review To QE3 or Not To QE3: That is the Question - Some market participants are beginning to speculate about another round of quantitative easing. Although recent growth indicators have not been particularly stellar, the economy is still growing. Moreover, core CPI inflation in the neighborhood of 2 percent means that the threshold for more QE is relatively high. - Overall, indicators were positive during the week. Housing starts increased by 2.6 percent in April, the Empire Manufacturing index improved to 17.09 in May from a 6.56 print in April and retail sales printed a 0.1 percent increase in April, in line with expectations. To QE3 or Not To QE3: That is the Question QE3 seems to have more lives that a cat; it comes back into the forefront of the U.S. economy discussion ...

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 ...

The Week Ahead Highlights When will volatility pick up Digesting payrolls Will there be more QE for the UK? Data Watch When will volatility pick up? Volatility in US Treasuries is at its lowest level since 2007, so too is volatility in the FX options market for short-term EURUSD products and the Vix has fallen sharply since peaking in autumn 2011. Yet Europe's sovereign stresses remain as strong as ever, Spain and Italy are struggling to sell their sovereign debt to anyone bar their domestic banking sectors and election risks are enormous as Greece and France go to the polls on Sunday. So why is volatility so low? The answer lies with central banks and fairly tight FX ranges. When central banks come in and pledge that interest rates will remain extremely low until 2014, ...

Pessimism dominated the market yesterday after the downbeat manufacturing and services data, which regenerated concerns that growth may weaken further in the coming period. In addition, the sentiment deteriorated more after the euro zone governments' debt widened in 2011 followed by confirmed recession in Spain, the thing that sent high yielding currencies south, led by the euro. The sentiment remains fragile in the euro-area region, where any improvement seen might trigger temporal stability; however, the tension in the debt market must fade away for this stability to last and linger. From here our eyes remain focused on the indebted Spain, where the nation already slipped into recession with fears the government despite the deep austerity adopted most probably will not be able to boost ...

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 ...