Wider Trade Gap

Forex News and Events: Fx markets remain hostage to shifting headlines and persistent evidence of contagion in european debt markets. Deeply concerning to traders is the aggressively rising funding costs across europe. Yesterday's spanish 10yr bond auction came in at 6.975 (out pacing the recent Italian auction), while bid to cover was an uninspired 1.54. In Italy, the new technocratic government, lead by Prime Minister Monti, took a big step forward by passing his first confidence vote. In his prepared remarks to the senate, Monti would look to reinforcing fiscal discipline, assist potential growth, and move forward a more populist agenda by setting taxes. Italian government yield spreads vs. German counterparts, rallied somewhat in reaction to Monti’s statements, but still remain ...

(Reuters) - The euro edged higher on Friday as traders covered short positions after its recent drop to a five-week low, but the single currency was expected to remain in a downtrend amid fears the euro zone debt crisis is spiraling out of control. Selling pressure on the euro has intensified this week on signs that contagion was spreading to core euro zone countries such as France, and the currency is on track for its biggest one-week drop since early September. The spotlight fell on Spain on Thursday, which had to pay the highest rate to sell its 10-year debt since 1997, just shy of the 7 percent mark seen as unsustainable. The euro, however, showed some resilience in the wake of the Spanish bond auction, getting a boost from short-covering and holding above a five-week trough of $1. ...

(Reuters) - Asian shares and the euro fell on Wednesday as signs that rising borrowing costs were affecting AAA-rated France stirred fears that even core euro zone members may not escape contagion from the region's debt crisis. The political outlook remained unclear in struggling Italy and Greece as they attempt to push through severe austerity measures needed to get bail-out funds and win market confidence. Prime Minister designate Mario Monti was expected to unveil Italy's new government on Wednesday. MSCI's broadest index of Asia Pacific shares outside Japan .MIAPJ0000PUS fell 2.1 percent, while Japan's Nikkei stock average .N225 slipped 0.9 percent on Wednesday. .T The euro hit a five-week low against both the dollar and the yen, as euro zone jitters spurred risk aversion, and stood ...

(Reuters) - Spot gold prices inched down on Tuesday, as investors unnerved by an Italian bond auction focused on the scope of the task faced by new governments in Italy and Greece in keeping the region's sovereign debt crisis under control. Though gold is supported by its safe-haven allure, it is prone to spillover from the heavy sell-off in the wider financial market, where sentiment remains fickle over Europe's painful journey en route to solving its debt crisis. Asian shares fell as a rise in euro zone bond yields reflected lingering doubts about the ability of politicians in Italy and Greece to push through painful reforms to resolve their debt crises and win market confidence. "There is a much greater likelihood of its ending badly," said a Singapore-based trader. "Whether it ...

(Reuters) - Brent crude rose on Friday above $114 a barrel, adding to gains in the previous session, on hopes that developments in highly indebted Italy and Greece were part of a move that will help avert a wider crisis in the region. BY 0914 GMT (4:14 a.m. ET), Brent crude futures were 52 cents a barrel firmer at $114.23, after settling Thursday up $1.40. U.S. light crude futures meanwhile traded 55 cents higher at $98.33 a barrel, after closing at a 15-week high of $97.78. Italy's Senate is due to vote on Friday on austerity measures demanded by the European Union to avert a euro zone meltdown; while a new emergency government is expected within days, ending the Berlusconi era. Greece's prime minister designate will name a new crisis cabinet on Friday, that will under new president ...

(Reuters) - Asian shares struggled and credit markets weakened on Monday, with investors still nervous despite the agreement on formation of a new Greek unity government intent on avoiding imminent debt default. Investors were also shifting their attention to another debt-burdened country, Italy, which faces political instability as well, putting it under pressure to swiftly restore its credibility on financial markets. MSCI's broadest index of Asia Pacific shares outside Japan, which traded between plus 0.2 percent and minus 0.6 percent, was down 0.2 percent while Japan's Nikkei stock average .N225 ended down 0.39 percent. U.S. stock index futures reversed course and fell into negative territory after opening higher, as market players refocused on a lack of commitment to details that ...

(Reuters) - The euro nudged up on Wednesday, moving away from a three-week trough marked the day before, as investors covered short positions following its worst two-day fall since May with jitters over Greece's referendum set to cap any bigger gains. The euro was up 0.1 percent at $1.3715, but a seven-week peak of $1.4248 set last Thursday was a distant memory. It hit a session high of $1.3732 with some stop loss points, reported between $1.3720-40, taken out on the way. Underscoring its vulnerability to headlines from Europe, the euro hit the day's low of $1.3637 after Greek Prime Minister George Papandreou said he would push ahead with a referendum on an EU bailout deal, defying demands from lawmakers of his own party that he quit for jeopardizing Greek membership of the euro. "I don' ...

(Reuters) - The fallout from the collapse of MF Global Holdings Ltd (MF.N) rippled through global exchanges on Tuesday, as operators moved to suspend the U.S. futures broker or limit trades of its customers. MF Global filed for bankruptcy protection on Monday following bad bets on euro zone debt. London clearing house LCH.Clearnet declared it a defaulter. MF Global became the most high-profile victim so far of the euro zone debt crisis, and revived memories of the collapse of Lehman Brothers in 2008 that triggered turmoil in global financial markets. But market participants said because MF Global, although highly leveraged, was far smaller -- its balance sheet, at $41 billion, was less than a 10th the size of Lehman's -- the wider impact of its fall would be contained. "While this is ...

(Reuters) - The euro dipped on Wednesday, taking a break from its recent corrective rally made on hopes for a solution to the debt crisis, with fragile risk sentiment souring after the Slovak parliament rejected a plan to expand the euro zone rescue fund. But the euro and the Australian dollar managed to come off intraday lows after a rebound in Shanghai stocks on talk that the country's sovereign wealth fund has been supporting bank shares. The Slovakian main opposition party was likely to support the rescue fund measure in another vote this week after the government has resigned, but the twist has added to market nervousness just as EU authorities are working on concrete steps to avoid a wider contagion. Sentiment was also hit by bickering between the United States and China over a ...