Yen
The euro fell to a six-week low against the U.S. dollar on Wednesday as data released from the euro area showed the eurozone economy contracted more than expected in the first quarter of 2013, raising speculations for another interest rate cut.
The eurozone has been stuck in recession since the end of 2011, and the latest data showed the 17-nation euro zone contracted 0.2 percent, less than the 0.6 percent decline recorded in the fourth quarter of 2012, but more than economists’ expectations of a 0.1 percent fall.
Germany, the largest economy in Europe, said Gross Domestic Product (GDP) expanded 0.1 percent in the first three months of 2013, analysts called for GDP growth of 0.3 percent.
The Italy contracted more than expected pace in the first quarter for the seventh consecutive ...
Q1 European GDP data disappoints; UK quarterly inflation report a bit more upbeat but still cautious
Notes/Observations
Nikkei225 surged to fresh multi-year highs, climbing above the 15,000-level for the first time since Jan 2008 on the back of a weak JPY currency
JGBs reversed sharp rise after BoJ announced it would inject ¥2.8T in market operation on Friday (3x ordinary amount)
ECB's Asmussen: SMEs must get better access to bank loans; ECB considering ways to achieve this
Bank of France official seeks to help banks securitize loans for use as ECB collateral via a simple special purpose vehicle; process already possible but complex
Fitch upgrades Greece to B- from CCC; Outlook stable; clear progress eliminating twin deficits
Italy mandates banks for 30y syndicated bond
Major ...
Most Asian stocks advanced on Wednesday with Nikkei climbing above the 15,000-mark for the first time since January 2008 after the yen touched a 4 1/2-year low against the dollar. The MSCI Asia Pacific Index gained 0.9% to 143.29 as of 15:39 in Tokyo.
The dollar index rose to the highest in almost 10 months and the yen touched the weakest since October 2008 amid improving sentiment toward the U.S. economy which triggered bets the Federal Reserve will reduce stimulus.
Nikkei jumped more than 2% today as the weaker yen boosted the earnings outlook for Japanese exporters. Sony also gave a push to the index after it surged 10% on news that investor Dan Loeb has called on the company to spin off its entertainment business.
- Nikkei 225 closed 2.29% higher at 15096.03
- Topix closed 1.79% ...
Sunrise Market Commentary
Rates: Core bonds sell-off resumes
A complex of factors suggesting the worst is over for the US economy and thus a re-accelerate of growth is likely boosted sentiment on risk during the US session, sending core bonds lower. Huge demand for Spanish bonds limit
Currencies: dollar gains across the board
After the taking a breather on Monday, the USD rally resumed. Investors play the card of a cyclical rebound of the dollar. The move is supported by rising US bond yields. The link between EUR/USD and equities has clearly been broken. Today, a poor EMU Q1 GDP might put further pressure on the single currency.
The Sunrise Headlines
US equities eked out nice gains on Tuesday, with the S&P up 1% to a near record high. Overnight, Asian equities trade positive with an ...
Australian dollar and Japanese yen continue their falls against American dollar, while the two currencies boosted the dollar to incline through their current noticeably weakness.
Investors began to gain concerns over the Australian dollar as they are caution about the currency’s overvalued, while Australian dollar show slowed performance during the current period.
From another side, Japanese yen negatively affected by the recent aggressive monetary easing by the Bank of Japan to spur growth and end the 15-years deflation period in the world’s third largest economy.
American dollar rebounded recently against weaker majors amid the recent positive indicators for American economy which boosted the nation’s outlook among investors.
USD/JPY pair traded today near 102.20 after hitting its ...
South Korean unemployment rate fell below estimates in April as an unexpected expansion of first quarter GDP and the weaker Japanese yen helped create more jobs in manufacturing and services sectors and boost the nation`s exports.
Unemployment fell a seasonally adjusted 3.1% in April, below market estimates and the previous month`s 3.2%.
The Bank of Korea took bold measures toward supporting the nation’s economy amid the recent global sluggish performance; this month, the board members decided to reduce the South Korea`s 7-day repurchase rate by a quarter percentage points to 2.5% from 2.75%.
South Korea’s economy recorded a more-than-estimated expansion during the first quarter of the year as exports rebounded, helped by a weaker yen. GDP expanded at the fastest pace in 2 years, ...
The Canadian dollar demonstrated a big drop against its US counterpart yesterday and continued to fell today on concerns that Canada’s economic growth will trail that of the United States. The currency was also weak against other majors, including the euro and the yen.
The US economy is expected to expand 2 percent in 2013. At the same time, analysts believe that the Canadian economic will grow just 1.6 percent. Such outlook was not very supportive for the loonie. Yesterday’s drop of crude oil did not help the currency either.
Not all economists are concerned about the loonie’s drop. The currency was rising previously and some specialists believe that the rally may resume after a small correction.
USD/CAD rose from 1.0178 to 1.0186 and EUR/CAD advanced from 1.3149 to 1.3174 as of 1:31 ...
The single currency surrendered its earlier gains after lower-than-expected German investor confidence data, ahead of a GDP report tomorrow which is expected to show the euro area remained in recession.
The euro is on its way to resume drop versus the U.S. dollar after taking a slight breather yesterday following a German report showing that investor confidence (Zew survey economic sentiment) rose to 36.4 this month from 36.3 in April, coming below forecast of 40, while the current situation gauge fell to 8.9 from 9.2, lower than forecasts of 9.2.
Directly after the news the EURUSD pair surged to touch a high of 1.3027, lifted by the better-than-expected Zew survey and industrial production for the euro area.
But then it surrendered its earlier gains on worries the pace of growth ...
After a slow start in financial markets this week a couple of themes are emerging: the yen is rebounding and the euro is getting hit from comments coming out of the Eurozone finance ministers meeting in Brussels.
Could the Japanese authorities' enormous stimulus plan be about to bite the government? 5-year government bond yields have surged to their highest level in 2 years this morning. While the nominal level of the 5-year yield is still only 0.4%, it is the pace of the gains that may be concerning to Tokyo. Over the past month, bond yields have risen nearly three-fold, which is concerning for a country like Japan with public debt equivalent to 214% of GDP. After all, rapid rises in bond yields causes a jump in Japan's interest bill, which is a long-term economic negative.
The chief ...