Year Reflects Confidence

Worries are expected to continue this week in the European continent amid the fiscal and economic woes in Spain in addition to the political upheavals in Greece. The situation seems to be getting worse which may provoke the need for further measures by European officials to prevent the escalation of the European debt crisis. Fears soared last week after the downgrade of Spain`s Banco Santander, the country`s largest lender, and BBVA by Moody`s amid the government`s efforts to reform the ailing banking sector, and the rise in borrowing cost at a bond selling auction. On the other hand, fundamentals showed that the euro area`s fourth largest economy recorded 0.3% contraction in the first quarter, following the 0.3% contraction in the last quarter of 2011; therefore, the country is ...

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 ...

Australia and its monetary policy makers sees that surplus in budget is the way to face the instability of global economy and its recovery and also the way to get over the Europe’s debt crisis. Meanwhile, the previous decline in interest rate by 50 basis point by the Bank of Australia to be 3.75% reflect the bank’s worries over the instability of global economy, where the move supported the nation’s growth and credit section, while Australia’s economy is expected to regain better growth rates during the upcoming year depending mainly on mining sector. Australian government is trying to find out new plans and alternative solutions amid the declining in its popularity, where the government intends to offer a new plan to support Australian budget. Consumer Confidence fell in April to the ...

U.S. Review Modest Growth on a Broadening Base - The underlying tone of the recent economic reports remains consistent with modest economic growth. Consumer spending ended the first quarter on a solid note and spending is now on track to grow at a 2 percent pace in the second quarter. - Reports from the regional manufacturing surveys showed some weakness but the National ISM report came in stronger than expected. The nonmanufacturing survey, however, came in below expectations. - Nonfarm employment rose by 115,000 jobs in April and the unemployment rate fell 0.1 percent to 8.1 percent. Modest Growth on a Broadening Base This week's ISM report came in better than expected, rising 1.4 points to 54.8 in April, which greatly relieves fears built up from the weaker factory orders ...

The Weekly Bottom Line HIGHLIGHTS OF THE WEEK United States - U.S. job creation may have weakened in the last few months, but the grounds for sustaining stronger employment growth are more fertile now than have been since the economic recovery began. Europe's labor market, by contrast, is likely to deteriorate further before it gets better. - Europe's (nonfinancial) corporate sector is highly leveraged. As balance sheet adjustments are made, Europe risks further decreases in investment, higher layoffs, and lower economic growth. These effects are compounded by deleveraging in the public sector. - U.S. corporations, by contrast, are more profitable and liquid than they have ever been. At some point some of these funds will be unleashed towards new investment, creating a positive ...

The European common currency continued the decline today against other majors, affected by the downbeat Spanish bond sale, which raised fears the instability in the debt market might continue, making the financing operations through issuing debt difficult for other highly indebted European nations. The volatility and rising borrowing cost reflects fears and doubts in addition to fragile confidence, where European and international investors doubt the ability of Spain to pay back the funds borrowed. Therefore, they demand more return in order to bare the additional risks associated with holding Spanish debt. The Spanish Treasury auctioned today 2.52 billion euros of bonds maturing after two and five years, slightly above the maximum target of 2.5 billion despite the increase in borrowing ...

Weekly Economic and Financial Commentary U.S. Review First-Quarter GDP Growth Slows The U.S. economy grew at a 2.2 percent annual rate in the first quarter, somewhat slower than the consensus had expected. Consumption remained the primary driver of growth as business spending slowed and the government sector continued to scale back spending. In our U.S. review section this week, we discuss the GDP report in the context of the big miss in durables and consider what it means for business spending going forward. We also look at a very small change in the Fed statement this week that reflects an improving view on the troubled housing sector. Business Spending Poised for a Slowdown? Durable goods orders for March were ugly. The 4.2 percent drop was the largest decline since the U.S. ...

(Reuters) - Asian shares pushed higher on Friday on firm U.S. data despite a two-notch downgrade of Spain's credit rating that capped gains, while fresh easing measures by the Bank of Japan supported Tokyo stocks. Japan's central bank moved as expected to help fight deep deflation, initially pushing Japanese stocks up more than 1 percent and helping drag the broader Asian stock higher. MSCI's broadest index of Asia-Pacific shares outside Japan extended gains to a 0.4 percent rise, headed by the technology sector with a 1.6 percent rise. At current levels, the index was set for a 0.2 percent weekly gain. Seoul shares outperformed, rising on the back of a record $5.15 billion first-quarter profit by Samsung Electronics, which boosted its shares by more than 3 percent to an all-time ...

Last week was full of major economic data concerning many Asian economies, where eyes were centered on the International Monetary Fund that expected more expansion for the global economy during this year, as signs of recovery from the American economy supported the global economy’s outlook as well as the easing European sovereign debt crisis. The start was with the Japanese economy that released its merchandise trade balance total for March, where the actual reading showed a deficit of 82.6 billion yen compared with a previous reading of 32.9 billion yen revised to 29.4 billion yen, while expectations was leading to a deficit of 223.2 billion yen. Adding that Japanese economy released exports trade balance for March where the reading inclined by 5.9%, compared with a previous decline of ...