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That The Euro Is UnlikelyTitle:
European Market Update : 25/05/2012
Germany said to be working on growth plan for euro zone
Economic Data
(EU) ECB: €3.8B borrowed in overnight loan facility vs. €3.8B prior; €760.9B parked in deposit facility v €765.9B prior
(RU) Russia Narrow Money Supply w/e May 21st (RUB): 7.00T v 6.93T prior
(SG) Singapore Apr Industrial Production M/M: -3.5% v +06%e; Y/Y: -0.3% v +4.1% prior
(DE) Germany Jun GfK Consumer Confidence: 5.7 v 5.6e
(FR) France May Consumer Confidence: 90 v 88e
(ES) Spain Apr Producer Prices M/M: -0.8% v 0.0%e; Y/Y: 3.1% v 2.7%e
(AT) Austria Mar Industrial Production M/M: +1.6% v -1.4% prior; Y/Y: +0.8% v -0.9% prior
(CH) Swiss Q1 Non-Farm payrolls: 4.049M v 4.044M prior
(DE) Germany May CPI Saxony M/M: -0.2%% v +0.1% prior; Y/Y: 1.9% v 2.0% prior
(IT) Italy Mar Retail Sales M/M: -0.2% V -0.2%e; Y/ ...
Title:
Another Day, Another New Correction Low For EUR/USD
Sunrise Market Commentary
- Fixed Income: Hunt for yield
- Following horrible French and German PMI readings, core bonds set new highs. The German 10-yr yield set an all time low at 1.35% and this initiated for the first time a “hunt for yield” trade into Belgian, Austrian and French bonds. The trade was most visible at the longer end of the curve, resulting in a bull flattening.
- Currencies: Another day, another new correction low for EUR/USD
- On Thursday, the decline of EUR/USD was extended. However, given the flood of negative news, the damage could have been worse. EUR/GBP struggles to hold above the 0.8000 barrier. Today, the calendar is thin. However, one can expect investors to stay cautious going into a long weekend. This is no help for the euro
The Sunrise ...
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German Data Leads to Additional Euro Losses
Disappointing German data sent the euro to fresh lows against the USD during European trading yesterday. In a sign that even the euro-zone's biggest economy was not immune from the region's debt crisis, the German Flash Manufacturing PMI and Ifo Business Climate both came in significantly below expectations. As a result, the EUR/USD dropped as low as 1.2515, close to a two-year low. As we close out the week, traders will want to continue monitoring any developments out of the euro-zone. Any new negative developments could send the common currency below $1.2500 before markets close for the week.
Economic News
USD - Safe-Haven USD Sees Additional Gains
The US dollar was able to extend its gains against the euro yesterday, following the release of several disappointing economic indicators ...
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Western Asset Management sold European bank debt: CIO
(Reuters) - Fixed income money manager Western Asset Management Co slashed its holdings of European bank debt and shifted to borrowings in the United States, which will benefit from stronger economic growth, Chief Investment Officer Stephen Walsh said on Thursday.
Western Asset's biggest concern is the mounting economic challenge facing Europe that is likely to tip the region into recession, Walsh, who helps oversees $446.7 billion, said on a webcast for the firm's fund investors.
The situation is unlikely to be resolved soon, he said, making it a good time to reduce risk by selling European bank debt "and bringing it back to the U.S."
Western, a unit of Baltimore asset manager Legg Mason Inc (LM.N), is just one of a number of major bond managers grappling with how to treat their ...
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A dead cat bounce?
After a bunch of creepy economic figures starting from the euro zone manufacturing and services numbers which showed the sectors extended contraction last month and confidence among business within germany dropped to 106.9 from 109.4, that was followed by the GDP figure from the U.K which confirmed further contraction as the country’s economy contracted more than expected. While from the U.S; core durable goods orders dropped by 0.6% while markets were expecting a 1.1% expansion.
Although the overall picture remains clearly uncertain, however markets were well supported after being extensively oversold today, rebounding slightly this morning, and currently extending the recovery after the Greek central bank chief said that Greece’s four largest banks are to be recapitalized by an 18 ...
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Greek Debt Crisis: Answers to Frequently Asked Questions
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. ...
Title:
Dukascopy Afternoon Forex Overview : 23/05/2012
Fundamental Analysis
EUR
German bunds rose on worries that European leaders will struggle to resolve the euro zone debt crisis during tonight's European summit. David Schnautz of Commerzbank AG in London thinks that Europe is unlikely to solve key topics and will probably disappoint the market. The 5-year bund lost 5 bp to 0.47 percent at 10:49 GMT after tumbling to 0.461 percent, the lowest since 1990, when Bloomberg began gathering data.
USD
Crude oil futures declined in Asian session on Wednesday as Iran is ready to invite nuclear inspectors, the move that may ease oil import sanctions. Light, sweet crude oil futures for July delivery traded at 91.27 US Dollars per barrel, retreating by 0.63% from the last session's high of 91.72 US Dollars per barrel.
GBP
Today the minutes of the ...
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Risky trade getting hammered
Higher yielders remained under pressure as uncertainty continues to surround markets. The lack of assurance of an Imperative action on Greece from the euro leaders in their informal summit today makes things further vague for the destiny of the risky trade. While markets lack a conclusive expectation for the outcome of the summit majors look skeptical around key support levels.
During a teleconference earlier today, the Eurogroup Working Group (EWG); which consists of the officials preparing the meetings of finance minister, and form the board of the ESF as well, agreed that euro zone countries must consider and prepare for the consequences of a Greece exit. The move could have further negative impact on the common currency.
While Later today, the finance ministers are expected to unveil ...
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Will Greece Leave or Not?
We have heard conflicting information about Greece over the last 24 hours: first we heard that Greece was making plans to leave the Eurozone from former Prime Minister Papademos, which was denied. Then this morning reports from a German newspaper suggested that the ECB had set up a task force (tucked away in a bunker) working on the potential fallout from a Greek exit. It's likely that we will get these conflicting headlines between now and the end of the EU summit, which starts this evening at 1800 BST.
The markets' seemed to like the idea of an Avengers - style ECB working to combat the negative effects if Athens goes to the wall, and the euro bounced from its lowest level since 2010 earlier. But the real test will be the outcome of today's summit. So what should we expect and, ...
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