Tempers Market Momentum

(Reuters) - Gold steadied on Friday ahead of employment data that could cement expectations for the likely course of Federal Reserve monetary policy, shrugging off the negative impact of a weaker euro after Greece completed a crucial bond swap. Greece won a strong 85.8 percent acceptance from its private creditors for a bond swap deal which will ease its massive public debt and clear the way for a new international bailout. But concern over other indebted euro zone states persisted. Greek bonds trading at roughly a fifth of their face value in the grey market highlighted the lack of investor faith in the longer-term health of the Greek economy, pushing the euro down against other currencies. The main risk event for Friday was U.S. employment data that was expected to ...

(Reuters) - Greek resistance to the strict conditions attached to a bailout fund on Tuesday sapped recent momentum in markets spurred by hopes the global economy is improving, and the euro fell on renewed fears of a messy debt default. The Australian dollar leapt to a six-month high but stocks turned negative after the central bank held rates steady at a review when markets had positioned for a rate cut. Opinions were divided over whether the wrangling over Greece's debt restructuring talks would eventually be resolved or trigger contagion across other vulnerable euro zone countries, tempering risk-taking investments. MSCI's broadest index of Asia-Pacific shares outside Japan rose as much as 0.4 percent to its highest since September 1, then reversed direction, and last stood barely ...

The Weekly Bottom Line : 14/10/2011 HIGHLIGHTS OF THE WEEK United States Markets continued to rally this week, with the S&P 500 gaining more than 5%. While encouraging, the index remains down about 3.5% on the year. The growing appetite for risk among investors stems from some policy action in Europe, diminished recessionary fears in the U.S., and signs that the Fed is ready to inject more stimulus if the economy weakens. However, the risks to the economic outlook remain largely unchanged from a few weeks ago. While the market's recent rally is encouraging, volatility is sure to remain elevated in the weeks and months ahead. Canada This week's Canadian data helped underscore our view that the Canadian economy would bounce back modestly from the small contraction ...

Weekly Economic and Financial Commentary U.S. Review Recession Fears Rise Again Today, markets received a gut-wrenching August payroll report, ratcheting up recession fears again. There were zero net nonfarm payroll jobs created in August with 58,000 fewer net jobs created during July and June. More troubling for people who still have jobs, average hourly earnings and weekly hours both contracted. Yet, the week started on a bright note, personal spending for July surprised on the upside, suggesting that economic growth was motoring ahead, when it was hit by the equity market declines and the shock to business and consumer confidence in August. Is the Glass Half Full or Half Empty? Fears of recession increased on Friday as the BLS reported that August nonfarm payrolls did not ...

The Weekly Bottom Line HIGHLIGHTS OF THE WEEK United States Moody's and Standard and Poor's took the unusual steps of placing U.S. government debt on a downgrade review. While a deal on the debt ceiling remains the most likely scenario, it is not a sure thing. Europe's sovereign debt crisis entered a new and alarming phase this week, as markets shifted their focus to highly indebted Italy. In Bernanke's testimony to Congress this week, the Chairman revealed that the evolution of Fed policy remains as deeply data dependent as ever. Canada This week's economic data showed that Canada is emerging from the economic lull hit in the second quarter. Exports rose 1.2% in the May, the Bank of Canada outlook survey also showed that Canadian businesses remained relatively upbeat ...

The Weekly Bottom Line HIGHLIGHTS OF THE WEEK United States This has been a very interesting - and intense - week for financial markets. Several factors were driving the downbeat sentiment. First, China raised reserve requirements and interest rates yet again. This spells growth moderation for the Asian economic giant and reinforced concerns over deepening fault lines in the global outlook. Second, serious concerns continued to surround whether Greece would secure funding from the IMF and the EU to meet looming sovereign debt payments. And lastly, ongoing U.S. political wrangling over the debt ceiling has not yielded any results. However, we believe political rationality will win out at the end of the day. We deem the odds that the U.S. will default on its debt to be ...

The Weekly Bottom Line HIGHLIGHTS OF THE WEEK United States The risk of debt restructuring in Greece is mounting, which in turned spurred Standard & Poor's to downgrade the country's credit rating by two notches. Meanwhile, the roller coaster ride of crude oil underscored the volatility in oil markets, prompting U.S. stock markets to mirror these movements. The effects of surging oil prices were evident on March's trade data, and April's retail sales and consumer price data Going forward, should the recent drops in the price of crude oil be sustained, it could provide some relief to consumer spending and the trade balance. Canada Inflation is expected to record another sizeable gain when data are released next Friday. Food and energy have only been mostly ...