Global Markets News

NEW YORK (Reuters) - Investors will continue to ride the speediest rally in U.S. stocks since the Great Depression despite growing concerns that the market is overbought and due for a correction. WASHINGTON (Reuters) - Wall Street and the U.S. government statisticians seem PARIS (Reuters) - Finance ministers of the world's major economies reached a fudged accord on Saturday on how to measure imbalances in the global economy after China prevented the use of exchange rates and currency reserves as indicators. HONG KONG (Reuters) - China Investment Corp, the country's $300 billion sovereign wealth management fund, has teamed up with private equity fund Blackstone Group LP <BX.N> to buy a Japanese loan portfolio from Morgan Stanley at a steep discount, the Financial Times reported on Monday. PARIS (Reuters) - Treasury Secretary Timothy Geithner on Saturday pointed to the problems China's tightly controlled currency poses for other developing economies and said Beijing still had further to go to let its currency rise. PARIS (Reuters) - European Central...

Dow could close last week up by 117 points for the third consecutive week despite the Chinese second interest rate hike this year which was weighing negatively on the stocks but US last session moments of the week have been contained by market optimism sentiment by better US earning reports to come supporting the US stocks market which has been still contained by the earlier better than expected release of US Philadelphia Fed Manufacturing Index of February which was expected to be 21 from 19.3 in January and it has surprised the market by 35.9. The greenback came under pressure across the broad by this optimism containing the market sentiment pushing Dow to close at the high of the session at 12391.29 as the greenback is still the well used currency for carrying risks on its low yielding and the recent maintained view of the fed of keeping the interest low as much as it can keeping its quantitive easing policy...

The next week promises to be quite volatile as a large amount of significant news out of the US gets set to be released. Following this week’s bearish run from the USD, investors are anxious to see whether the dollar will be able to stage an upward correction. USD traders will want to pay particular attention to Tuesday’s CB Consumer Confidence figure, as well as Wednesday and Thursday’s Existing and New Home Sales figures. Early predictions are showing that each figure is likely to improve slightly over last month. In addition, Thursday’s Unemployment Claims figure is likely to generate heavy activity in the marketplace. After this week’s disappointing figure, all eyes will be closely watching to see if the number of unemployed people drops in the US. If so, the dollar may turn out to have a profitable week. The euro is also likely to see some volatility next week. In addition to specific indicators like Monday’s German Ifo Business Climate and...

The Pound ran into resistance at 1.62 after pushing higher for most of today's trading session. Position comments from BOE policy makers increased yields in the UK, adding momentum to the Sterling. Bank of England policy maker Andrew Sentance said the BOE should could consider raising interest rates to boost the value of pound. His theory is that a higher Pound would decrease import prices and calm inflation. Sentance has long been the most hawkish on the MPC. Market expectations for BOE tightening have crept up steadily, with 1 year OIS moving from less than 10 basis points in October to a high of 87.5 basis points on Tuesday. The Pound closed above the 1.6170 level and is poised to test resistance at the 1.63 level. The Sterling is creating a reverse head and shoulder pattern and a break of 1.63, should lead to upside toward 1.70. China State Administration of Foreign Exchange (SAFE) estimated that $35.5 billion of “hot money” flowed...

The dollar consolidated against the Yen after moving higher during 10 of the last 11 trading sessions. Higher rates in the US based on stronger inflation figures and better than expected economic data, has dollar bulls salivating. The US, Japanese interest rate differentials have been driving the currency pair. Today the markets needed to absorb news of higher than expected Wholesale Price inflation. The Producer Price Index (PPI), rose a seasonally adjusted 0.8% in January from December, according to the Labor Department. The majority of the rise was in energy prices. Core PPI, which excludes food and energy, increased 0.5% last month. Economists expecting a 0.9% increase in overall producer prices and a 0.2% increase in the core index. This follows a greater than expected increase in import prices yesterday. Higher inflation leads to higher yields in the long end of the interest rate curve, which has pushed the US - Japanese 10 year yield spread to 100 basis points. Additionally in...

  By Barbara Zigah Markets had digested and accepted yesterday’s release of U.K. inflation data, and in early trading today, the Pound Sterling had moved broadly higher.  Unfortunately, that was all before the release of the Bank of England’s February inflation report.  As the central bank governor, Mervyn King, announced in his letter to the Chancellor of the Exchequer, the Bank was revising their growth forecast, suggesting that the U.K. economy can expect some rough times ahead.  Some analysts believe that Governor King was essentially setting the stage for what is likely to be several interest rate hikes during the course of the year. Had that been the only U.K. economic news of the day, the markets might have shown their appreciation in the Pound Sterling by pushing it higher.  However, the U.K. unemployment data also was released today, and that dampened market sentiment. According to the press release from the U.K.’s Office for National Statistics, for the last quarter of 2010, the unemployment...

Inflation data was released in the US, UK and China today, creating demand for gold, the pound and the dollar. Higher yields have been driving the moves in the currency markets. In the UK, January CPI was in line with expectations, rising 0.1% on the month but lifting the year-over-year rate to 4% from 3.7%. The core rate ticked up to 3.0% from 2.9%. The BOE is now obligated to write its 5th explanatory letter to the Chancellor. King attributes the price pressures to the VAT hike, past sterling weakness and the more recent increase in commodities. He warns of the risk of further increases in the coming months. The first resistance level is near $1.6135. In the US, the price of goods imported to the U.S. climbed by 1.5% in January from the month before, according to the Labor Department. This follows an upwardly revised 1.2% gain in December, versus an initial estimate of 1.1%. Import prices are up 4.3% over...

By David Becker The European markets treaded water today, as markets participants absorbed a plethora of economic and merger news, that effected the European bourses.  The DAX, CAC edged higher while the FTSE moved lower on light volume.The market received some slightly disappointing news in the form of the German ZEW economic sentiment indicator which rose in February indicating confidence in the country’s recovery. The Zew increased to 29.5 compared to 25.4 in January.  Expectations were for a reading of 31.3.  Additionally, the fourth quarter of 2010 GDP figures were slightly lower than expected showing a 0.3% rather than 0.4% consensus. In the UK, January CPI was in line with expectations, rising 0.1% on the month but lifting the year-over-year rate to 4% from 3.7%.  The core rate ticked up to 3.0% from 2.9%.  The BOE is now obligated to write its 5th explanatory letter to the Chancellor.   King attributes the price pressures to the VAT hike. Banks featured among the top risers...

Fantasy or comedy? I couldn’t decide which way to label the Obama budget, so I went with both. The bottom line is that the Obama administration has brought forth the most unbelievable revenue increase that I have ever seen proposed in a budget, a whopping 65% increase in revenues in just four years, which will – miracle of miracles – drop the deficit as a percent of GDP from nearly 11% to just 3.2% over those same four years. The only problem with this scenario is that it stands virtually no chance of actually happening. Revenue will be far lower than projected and the deficit correspondingly higher. One of my abilities is spotting bogus numbers quickly, and another is to make reasonably accurate projections without a staff of hundreds. For example, in 2009 I called for the Social Security fund to soon begin dipping into negative territory when the CBO was clinging to the illusion that 2017 was the ‘below zero’ date. Turns...

By Ian Chua and Ayai Tomisawa SYDNEY/TOKYO (Reuters) - Sterling rose in Asia on Wednesday as accelerating UK inflation fueled talk of an early interest rate rise, while a weaker yen helped to send Japanese stocks to the highest level since last May. Sterling rallied to a 5- month peak against a currency basket after data on Tuesday showed inflation in Britain jumped to 4 percent, twice the Bank of England's target, prompting Governor Mervyn King to acknowledge that rates might rise more rapidly than economists had expected. Analysts now expect a rate rise in May and the next market focus is the BoE's inflation report due at 1030 GMT. Sterling last traded at around $1.6165, nearing a high of $1.6170 overnight. The pound has gained some 3 percent against the U.S. dollar so far this year. Against the yen, the dollar last traded at around 83.75, not far from an eight-week high of around 83.90 yen hit the previous day, helped by the recent...