Global Markets News

The euro's momentum against the U.S. dollar was halted on Tuesday, as signs of a slowdown in Europe's service sector activity started to appear. At the moment, the euro fell down below the $1.45 barrier, trading at $1.4496.The euro is still too strong for the Japanese yen, however, rising 0.08% to ¥117.58. The euro suffered losses as analysts' focus shifted from Greece to hard data, which suggested the Eurozone economy is slowing down. The euro was hit by a sharp slowdown in France's service sector activity. In June, France's services PMI fell to 56.1, from 62.5 in May, which represents the steepest fall in the 13 year history of the index. The index still remains above the 50 points mark, however, which indicates expansion. France is the Eurozone's second largest economy and the majority of its GDP falls on its service sector. As a result, a sharp slowdown in France's service sector will have markets worried as more pressure builds up on...

Risk sentiments had a drastic turnaround last week as Greece has secured the fifth tranche of bailout fund from EU at €12bn to avoid an immediate default. The strong rebound in US equities was impressive with DJIA and S&P up 5.4% and 5.6% respectively during the week, both posting their largest weekly gains since July 2009. CAD AUD, and NZD were the strongest currencies in the risk seeking environment and were supported by the rebound in commoditiesl. Meanwhile, safe haven assets suffered. CHF had a sharp and broad-based reversal after making record highs against most major currencies in June. Gold, on the other hand, also tumbled through the $1500.00/oz level again and was extremely weak against the EUR. EU finance minister are expected to approve to release the fifth tranche of the bailout fund to Greece after the country passed the new €78bn austerity package . The €12nb fund of the €110bbn bailout made last year should help Greece rollover debts...

Greece has announced its economic plan to privatize 87 billion Euros of state assets, 50 billion of which is being planned for bailing out the country until 2015 by selling off loss-making or entirely non-liquid assets. For example, a non-operating airport not far from Athens is being planned to go up for sale. The Postal Savings Bank will also be offered up for privatization; the bank is the country’s biggest holder of sovereign bonds. Prime Minister Papandreou’s government now faces the task of implementing the entire plan. It seems people who are entirely unconcerned about how to pay back at least a portion of Greece’s debt on time are the same ones that created the plan and chose the assets to be privatized. Greece may become a milkmaid for Europe, much in the same way as Cuba was for the Soviet Union. Final estimates were given last night on the consumer price level in the Euro zone and the actual figures will...

All eyes will be on Athens tonight, as the Greek parliament is preparing to vote on the next round of austerity cuts and economic reforms. The result is expected to be close and traders are proceeding cautiously in today's trading. The euro has edged slightly higher against the U.S. dollar and the Japanese yen. At the moment, the euro is up 0.19% against the greenback at $1.4398 and 0.07% against the yen at $116.66. The European financial circles are gathering to try to help Greece resolve its crisis. Yesterday, the CEO of the largest Italian bank, Corrado Passera, said Europe's banks can work together with the EU and the IMF to work out the crisis in Greece. The move follows the announcement by the French banks that they are prepared to allow Greece to repay its debt in 30 years. There are two ways to interpret these messages. On the one hand, it could be viewed as a sign that the Europeans...

With less than 24 hours to go before members of the Greek Parliament vote on the Austerity Package, sealing the fate of Greece in the process, the euro is holding steady against the U.S. dollar. The next 48 hours could determine the overall sentiment in the global financial markets for weeks and possibly even months to come which makes it extremely important to know the approximate timing for the votes. The first and most important vote will be on the details of the Austerity Package. This is the one that will elicit the most significant reaction from investors. The Parliamentary session begins at 10am local time which is 8am London Time / 3am NY Time. The vote is expected to be done right in time for the NY open at 3pm Local time / 1pm London Time / 8am NY Time. Thursday’s vote is on the procedures for implementation. This could still stall the process but should be more of a...

The US Dollar is broadly higher to start the week as uncertainty in the Eurozone is sending risk assets lower.  This week, the Greek parliament will vote on the austerity agreement that was put in place last week, and this event risk could contribute to market volatility in the coming days.  There were some positive macro headlines in the Euro region, but until these votes are completed, markets will continue to look for reasons to sell the Euro currency. In the US, the Fed’s policy decisions that were discussed last week have added to the Dollar bullish bias.  But it must be remembered that all the Fed did was to signal an end to further stimulus – not to signal a potential raise in rates.  So far there has been no material suggestion that the US economy will perform well if we see the beginning of a new tightening cycle. Later this week, aside from the Greek parliament vote, we will see...

Greece Prime Minister George Papandreou pleaded for unity and strength with his constituents on Sunday, as European Union and IMF officials scrambled to avoid a catastrophic bankruptcy for the Mediterranean country. "The consequences of a violent bankruptcy or exit from the euro would be immediately catastrophic for households, the banks and the country's credibility," Papandreou told parliament. Papandreou has urged his country to adopt strict austerity measures in light of inadequate tax revenues and a burdensome sovereign debt obligation. Greece has failed to right its financies since receiving a $100 billion+ bailout package last year. According to a New York Times report, "At a meeting in Luxembourg on Sunday night, the 17 countries in the euro zone are likely to pledge the release of the next 12 billion euro or $16.8 billion installment of a $155 billion loan package that Athens received a year ago. Finance ministers will also grapple with the complex task of designing another package of financial assistance that would...

Australian Monetary Policy Makers, led by the governor of the Reserve bank of Australia Mr. Glenn Stevens, kept the interest rate unchanged at 4.75% during the month of June to meet analysts' expectations, while the Bank sees the global expansion led by strong Asia growth. On the other hand, the Reserve Bank of Australia noted that that higher commodity price is the main reason behind fueling inflation rates, also the Bank said that the RBA: private investment is picking up, mainly in resources. Moreover, the RBA indicated that the global economy is expanding, while the financial conditions in the global economy are an accommodative, whereas global expansion led by strong Asia growth. The Australian dollar has dropped against its all major counterparts, while it declined sharply versus the greenback, recorded the lowest level at 1.0683, and it dropped against the yen to record a low of 85.76. 

The Euro had a great week, recovering some of the losses it encountered during May. The upcoming week's highlight is the rate decision with the press conference of Trichet. Here's an outlook for 9 events awaiting us, and an updated technical analysis for EUR/USD. We've seen some risk averse moves in the past week: Bad US figures weakened EUR/USD, such as in the ADP release. But eventually, the hopes for Greece pushed the pair higher, as well as the broad weak picture for the US, seen in Non-Farm Payrolls. Sentix Investor Confidence: Monday, 8:30. This wide survey of 2800 analysts and investors disappointed in the past two months. After steadily rising for a long time, it dropped to 10.9 last month, and is now expected to slide once again below 10 points. PPI: Monday, 9:00. This second tier inflation indicator will be watched towards the rate decision. Producer prices are expected to have risen by 0.8% after 0.7% last month. Retail Sales: Tuesday,...

The pressure has started to accumulate on the Single currency again after the release of weaker than expected May EU PMI Manufacturing index which came at 54.6 from 58 in April with strong easing of May Germane PMI Manufacturing index to 57.7 from 62 while the market was waiting for just 58.2 and this pressure has started to gain momentum following the release of US ADP unemployment index which has shown rising by just 38k from 175k in April while the market was waiting for adding 175k and also the weak figure of May US ISM Manufacturing index which eased to 53.5 from 60.4 in April and it was foreseen to get down to just 57.5 to accelerate the greenback back buying back as an investing funding currency pushing the single currency to 1.4306 before rebounding currently trading around 1.435 The single currency could get over 1.4344 reaching 1.4457 earlier this week on easing of the market concerns about the Greek...