eurozone

Dollar soars after Greek talks fail

News that ongoing talks amongst politicians in Greece have failed to come up with a coalition government and that new elections will need to be called, has triggered renewed fears that a Greek exit from the eurozone might not be too far away. In response, risk assets are again on the defensive with both traders and investors seeking sanctuary in the US dollar. Overnight, the dollar index stopped just short of its highest level for the year, reaching 81.45. The euro was singled out for especially harsh treatment, falling to 1.27; EUR/GBP dropped to 0.7960, a 3½ year low. Read more

16/05/2012 @ 07:07 GMT

The shifting eurozone growth debate

As Europe pushes back against austerity, and the new pro-growth French president Hollande is sworn in, never before has there been such a focus on the growth numbers across Europe. The good news is that there is something for everyone. The optimists (and headline writers) can rejoice at the fact that Germany grew five times faster than expected at 0.5% QoQ (it’s a good job the market was not expecting zero quarterly growth…). We have to wait until next week for the more detailed breakdown of the principle drivers. Read more

15/05/2012 @ 09:58 GMT

Why is the euro not much lower?

It is looking decidedly dreadful for the single currency once again.

09/05/12 @ 08:50 GMT by Michael Derks, Chief Strategist

Drawing the eurozone battle lines

After the initial weakening of the single currency on the back of the weekend’s political developments in both France and Greece, the euro crawled back through most of Monday’s session, although volumes were naturally muted by the London holiday. In France, there is a new President keen to rebalance the agenda in Europe towards growth and away from yet more austerity. In Greece, there is a mad scramble to try and form a government from the results of the latest election, which at present looks to be a tall order. Read more

08/05/2012 @ 07:33 GMT

Europe's austerity backlash

After the pounding meted out to risk assets overnight in response to the austerity backlash evident in both the French Presidential and Greek election results, both traders and investors can be forgiven for feeling quite unsettled. Although electoral disaffection with sustained harsh fiscal medicine is perfectly understandable, it is an open question as to what the realistic alternatives are when so many European sovereigns have so little financial manoeuvrability. Read more

07/05/2012 @ 07:23 GMT

More soggy eurozone data

It is probably no great surprise to see the services PMI data also softer in the eurozone vs. the preliminary release, following on from the pattern that was seen in the manufacturing series. The eurozone aggregate number was revised one point lower to 46.9. Naturally, the weakness was concentrated in those peripheral nations under most scrutiny at this point in time, namely Spain and Italy. But the real story this week has been the extent to which that weaker data has been seen from core nations, which these days pretty much means Germany. Read more

04/05/2012 @ 09:19 GMT

A dark and dismal Europe

A swathe of dismal economic news cast a long shadow across Europe yesterday, beating the single currency lower by nearly 1%. The manufacturing PMIs in the periphery for April were uniformly dreadful, Spain down to 43.6 and Italy to 43.8 (from 47.9 in March). For the latter, the new order balance saw the biggest monthly decline for three years, from 45.7 to 39.2, suggesting that there’s not much on the horizon to turn around the fortunes of the manufacturing sector anytime soon. Read more

03/05/2012 @ 07:36 GMT

The dismal eurozone outlook

A swathe of bad economic news has cast a shadow across Europe this morning, beating the single currency lower by around half a cent, knocking EUR/USD back below the 1.32 level. The manufacturing PMIs were shockingly weak in the periphery, Spain down to 43.6 and Italy to 43.8, from 47.9 in March. For the latter, the new order balance saw the biggest single drop for three years, from 45.7 to 39.2, suggesting that there’s not much on the horizon to turn around the fortunes of the manufacturing sector anytime soon. Read more

02/05/2012 @ 08:56 GMT

RBA boldness should be applauded

Last night’s decision by the RBA to lower the cash rate by 50bp to 3.75% ought to be applauded. Faced with an economy which, outside the mining sector, is in recession and with inflation likely to be lower than expected, policy-makers rightly decided that financial conditions needed to be loosened considerably. Australia’s central bank would also be concerned by the continued decline in property prices – according to the ABS, established house prices fell by a further 1.1% in the first quarter, the fifth consecutive quarterly decline. Read more

01/05/2012 @ 07:37 GMT

Brussels responds to Hollande’s growth demands

Stung into action by mounting criticism that Europe needs a growth plan alongside the current unflinching commitment to perpetual fiscal austerity, Brussels appears to be mounting a counter-offensive. Read more

30/04/2012 @ 11:50 GMT

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