Page 8 of 20 FirstFirst ... 67891018 ... LastLast
Results 71 to 80 of 194
  27 27 Attachment(s)    

Thread: Follow the latest news @ Empire Global

  1. #71
    Member EmpireGlobalfx's Avatar
    Join Date
    Jun 2011
    Location
    New Zealand
    Posts
    311

    Post ECB eyes decision on Italy bond buys to ease debt

    (Reuters) - The European Central Bank will decide later on Sunday whether to buy Italian bonds to try and prevent the euro zone debt crisis from widening, while global policymakers conferred on the twin financial crises in Europe and the United States.

    After a week that saw $2.5 trillion wiped off world stock markets, political leaders are under searing pressure to reassure investors that Western governments have both the will and ability to reduce their huge and growing public debt loads.

    ECB President Jean-Claude Trichet wants the policy-setting Governing Council to take a final decision on buying Italian paper after Prime Minister Silvio Berlusconi announced new measures on Friday to speed up deficit reduction and hasten economic reforms, one ECB source said.

    The source said that if the ECB council opted to intervene on Italy at a crucial conference call starting at 1700 GMT (1 p.m. EDT), the ECB and national central banks would start buying Italian bonds when markets open on Monday.

    That would likely prompt a sizeable relief rally on global markets. If it does not act, the reverse would be true.

    Another source said the council would look too at possible emergency liquidity measures to prevent money markets freezing. The fourth anniversary of the global credit crunch which ushered in the financial crisis looms this week.

    A third ECB source said the teleconference had been put back into the evening to see what measures the United States was ready to take to calm markets after credit ratings agency Standard & Poor's downgraded Washington's AAA rating to AA+.

    The ECB reactivated its sovereign bond-buying program last Thursday but purchased only small quantities of Irish and Portuguese bonds, seeking tougher austerity measures from Italy. That did nothing to stem market attacks on Italian assets.

    Berlusconi's plans entail moving up a balancing of the budget by one year to 2013, enshrining a balanced budget rule in the constitution and pushing through welfare and labor market reforms after talks with trade unions and employers.

    He gave little detail about how that would be achieved and the measures will take some time to enact.

    The debt crises on either side of the Atlantic, with the latest shock coming from Friday's U.S. downgrade, are whipping up market turmoil and stoking fears of the affluent world sliding back into recession.

    Markets in the Gulf region and in Israel, among the first to trade since the U.S. credit downgrading, tumbled on Sunday on worries the U.S. ratings downgrade and European debt woes may trigger another global downturn.

    G-20, G-7 CRISIS CONTACTS

    South Korea said finance deputies from the Group of 20 big economies addressed the European crisis and U.S. sovereign rating downgrade in an emergency conference call on Sunday morning Asian time.

    A Japanese government source said finance leaders from the Group of Seven big developed economies would also discuss the crisis and might issue a statement afterwards. The timing of a planned conference call was unclear, but was likely to be held before Asian markets reopen on Monday.

    French President Nicolas Sarkozy, who chairs the G7 and G20 forums this year, conferred with Britain's Prime Minister David Cameron on Saturday.

    "Both agreed the importance of working together, monitoring the situation closely and keeping in contact over the coming days," a spokesman for Cameron said.

    A White House economic adviser castigated ratings agency Standard and Poor's for cutting the U.S. credit rating to AA-plus from AAA. The U.S. Treasury said the rating agency's debt calculations were wrong by some $2 trillion.

    Over time, S&P's move could ripple through markets by pushing up borrowing costs and making it more difficult to secure a lasting recovery.

    S&P chief David Beers told "Fox News Sunday" that the Treasury Department's criticism of the credit rating agency's analysis was a "complete misrepresentation." Even with the debt limit agreement passed by the U.S. Congress, he said, "the underlying debt burden of the U.S. is rising and will continue to rise over the next decade."

    Asked about prospects for a further lowering of the U.S. rating, Beers said the agency's negative outlook meant that "risks are on the downside."

    ALARM IN GERMAN, FRENCH MEDIA

    Newspapers in Germany, the euro zone's reluctant bankroller, were both incredulous and gloomy on Sunday about the financial upheaval.

    Welt am Sonntag dedicated an entire section to global economic uncertainties, entitled "Der Crash" and wrote: "No one could have foreseen this dramatic crash and now the situation can only be endured with gallows humor."

    Der Spiegel magazine's front page featured euro and dollar banknotes going up in flames, with the headline "U.S. indebtedness, euro crisis, stock market chaos: Is the world going bankrupt?"

    French newspapers carried grim headlines with Le Journal du Dimanche trumpeting "The world on the edge of collapse" with a sub-headline saying: "The week starting should be crucial. Markets from now on are living in fear of a crash."

    Washington's Asian allies rallied round the battered superpower, with Japan and South Korea both saying their trust in U.S. Treasuries remained unshaken and urging investors not to panic.

    "I expressed our country's position on the (G20 conference) call that there will be no sudden change in our reserve management policy," South Korean Deputy Finance Minister Choi Jong-ku told Reuters by telephone, referring to Seoul's heavy ownership of U.S. bonds.

    "There's no alternative that provides such stability and liquidity," added Choi.

    The most immediate concern for financial markets was the debt crunch in the euro zone, where yields on Italian and Spanish debt have leaped to 14-year highs on political wrangling and doubts over the vigor of budget cuts.

    "The ECB has got to confront the speculators who are out to test the policymakers," said Mike Lenhoff, chief strategist at Brewin Dolphin in London. "(The U.S. downgrade) might cause some upheaval temporarily. The big issue is the euro zone and its implications for the banking system."

    SPLITS IN ECB

    The ECB remains divided over whether to buy bonds at all, with four German, Dutch and Luxembourg members of the 23-member council opposed, ECB sources said. Even some of those in favor say Italy should do more to front-load its reforms.

    The danger is that further pressure on Italian and Spanish bonds could further undermine a damaged European banking system and lock Italy, the world's No. 8 economy, out of the market.

    Indeed, doubts are growing in the German government that Italy could be rescued by the European emergency fund, even if the fund were tripled in size, according to Der Spiegel.

    Italy's financial needs are so huge that it would overwhelm resources, according to government experts, Der Spiegel said in its online edition. Italy's public debt is about 1.8 trillion euros, or 120 percent of its national output.

    Germany has consistently said troubled euro-zone governments should focus on spending cuts and internal reforms, not bailouts. The European Financial Stability Fund currently has 440 billion euros and would need to be expanded to cater for the likes of Italy and Spain.

    China, the largest foreign holder of U.S. debt, took the world's economic superpower to task for allowing its fiscal house to get into such disarray.

    On Sunday, a commentary in the People's Daily, the main newspaper of the ruling Communist Party, said Asian exporters, who depend on demand from the United States, could be among the biggest victims of the mounting U.S. economic woes.

    "The lowering of the United States' long-term sovereign credit rating has sounded a warning bell for the international currency system dominated by the U.S. dollar," said economist Sun Lijian, writing in the paper.

  2. #72
    Member EmpireGlobalfx's Avatar
    Join Date
    Jun 2011
    Location
    New Zealand
    Posts
    311

    Post Dollar to drop on S&P, flows seen to safe assets

    (Reuters) - The U.S. dollar is likely to take a further beating against the Swiss franc and Japanese yen on Monday, while global stocks could tumble after the United States lost its top-tier credit rating from Standard & Poor's.

    Losses against the euro, however, could be tempered by the euro zone's escalating debt crisis as officials there discuss ways to reduce borrowing costs for large euro zone economies Spain and Italy.

    The dollar's fall against the safe-haven Swiss franc and yen could be limited by possible intervention by the Bank of Japan and Swiss National Bank to stem their surging currencies.

    Stocks in Tel Aviv, one of the first global equity markets to open since the downgrade, dropped over 6 percent on Sunday in response to S&P's action late on Friday to cut the U.S. long-term credit rating by a notch to "AA-plus" from "AAA."

    The move by S&P drew criticism from some of the world's largest investors.

    "Obviously, we're going to get freaked out a little bit and the dollar will get hit, but it's only going to be for a couple of days," said John Taylor, chairman and chief executive officer of FX Concepts, the world's largest currency hedge fund.

    Over the past month, the dollar shed 6 percent against the Swiss franc and about 4 percent against the yen.

    "This downgrade is not that important and if you ask me, too silly. The U.S. is in a much better position than any, I repeat, any European country," Taylor added.

    It was not yet clear whether European policymakers would be able to come up with measures to allay concerns about their own region's fiscal crisis, though all the signs were that they were keenly aware of the importance of reassuring markets.

    Sources said the European Central Bank will hold a conference call at 1700 GMT to decide whether to buy Italian government bonds in the secondary market.

    One ECB source said that if the ECB council opted to intervene on Italy, the ECB and national central banks would start buying Italian bonds when markets open on Monday.

    The ECB last week resumed its purchases of government bonds in the secondary market after an 18-week hiatus, but its decision to restrict such purchases to Irish and Portuguese bonds led to sharp declines in Italian and Spanish bond prices, and borrowing costs soared to 14-year highs.

    "There is no reason why the ECB cannot simply go ahead and imply that they are going to support the Italians and the Spanish," said Mike Lenhoff, chief strategist at Brewin Dolphin in London. "It is better that they don't say anything, but go in and show there is another side to the market."

    Any ECB buying would offer relief to beaten-down Italian and Spanish bonds, although the extent of any rally in these bonds will depend on the size and persistence of the bank's bond purchases.

    U.S. RECESSION FEARS

    Worries of another U.S. recession and concern about the euro zone crisis have sparked a global stock market slump that wiped $2.5 trillion off companies' values in the past week.

    The fall in global share prices, as measured by the MSCI All-Country World Index, was the biggest weekly decline since early October 2008, according to Thomson Reuters Datastream.

    Consumer discretionary shares of firms dependent on external demand are likely to be singled out for more punishment.

    Still, some investors believed the expected sell-off in stocks on the U.S. credit downgrade had been largely priced in and may not last long. Some expressed doubts about the S&P decision as they are well aware of questions on the S&P's calculations of the projected U.S. fiscal deficits.

    "The U.S. track record -- over the past 200 years -- on its ability and willingness to fully service its debt is impeccable and the debt statistics should be interpreted not in isolation but in conjunction with the flawless track record of the U.S.," said Stephen Jen, managing director of SLJ Macro Partners in London, a global macro hedge fund.

    "This will have no lasting effects on financial asset prices," he added.

    U.S. Treasury debt yields are also expected to rise on Monday. Yields on benchmark U.S. 10-year Treasury notes rebounded to 2.56 percent on Friday, but were not very far from a record low of near 2 percent hit during the throes of the 2007-09 global financial crisis.

    The sharp swings in financial markets have piled pressure on policymakers.

    Finance ministers from the Group of Seven most developed economies are on Monday to discuss the U.S. sovereign rating downgrade and Europe's debt woes, Japanese news agency Kyodo reported on Sunday.

    "Be wary (Monday) of irrational depression as markets take flight," said Justin Urquhart Stewart, a director at Seven Investment Management in London. "We are dealing with the knowns and not the unknowns, but what we have a shortage of at the moment is political leadership."

    Goldman Sachs strategists said there was a one-in-three probability of a U.S. recession due to the worsening European crisis, the possible failure to extend payroll tax cuts and elevated levels of joblessness, despite a slight dip in the U.S. unemployment rate in July.

    That would bode ill for the benchmark MSCI all-country index, which last week hit its lowest since September 2010 and has accumulated losses of more than 12 percent since late July.

    "Market sentiment appears acutely vulnerable given the build-up of concern on a sharper U.S. slowdown and speculation on the appropriate policy response and lingering fears stemming from the sovereign debt crisis in Europe," Citigroup strategists said in a note.

  3. #73
    Member EmpireGlobalfx's Avatar
    Join Date
    Jun 2011
    Location
    New Zealand
    Posts
    311

    Post G7 gives first sign ready to battle crisis

    (Reuters) - Political and financial leaders gave their first sign of readiness to battle a debt crisis gone global when the European Central Bank signaled on Sunday it would start buying Italian and Spanish debt, a critical move to quell a bond rout that has rocked financial markets.

    The European Central Bank decision would be aimed at calming markets grown increasingly doubtful about Europe's ability to deal with its debt issues, a strikingly parallel concern to that which led ratings agency Standard & Poor's to knock U.S. debt down from "risk free" AAA status to AA-plus.

    Meanwhile, finance chiefs from Group of Seven industrial nations were to confer by telephone late on Sunday-- and possibly issue a statement afterward -- to try to soothe anxious investors after a week in which $2.5 trillion of market value was wiped out.

    Any statement would be timed to precede the opening of trading in Tokyo, the first major market to open on Monday, at 9 a.m. local time (0000 GMT/8:00 p.m. EDT Sunday).

    ECB President Jean-Claude Trichet said in a statement after discussions with his Governing Council on Sunday that the central bank welcomes new steps taken by Italy and Spain on fiscal and structural reforms, and hence it would "actively implement" its bond-buying program. A monetary source said this means it is ready to start buying up the debt of these two countries.

    "The Euro system will intervene very significantly on markets and respond in a significant and cohesive way," the source said.

    Political leaders are under searing pressure to reassure investors that Western governments have both the will and ability to reduce their huge and growing public debt loads.

    ECB President Jean-Claude Trichet wanted the policy-setting Governing Council to take a final decision on buying Italian paper after Prime Minister Silvio Berlusconi announced new measures on Friday to speed up deficit reduction and hasten economic reforms, one ECB source said.

    LOOKING FOR A BOUNCE

    Buying Italian bonds would likely prompt a sizable relief rally on global markets.

    On Sunday afternoon, German Chancellor Angela Merkel and French President Nichola Sarkozy weighed in with a joint statement praising both Italy and Spain for their pledges to impose budget austerity.

    They stressed that "complete and speedy implementation of the announced measures is key to restor(ing) market confidence."

    The back-and-forth between Standard & Poor's and the Obama administration over whether the downgrade of Washington's rating was justified continued on U.S. Sunday-morning talk shows where a senior official from the ratings agency said its concerns about political impasse in Washington were valid.

    John Chambers, an S&P managing director, said on ABC's "This Week" that years may be needed to regain AAA status and even them "it would take, I think, more ability to reach consensus in Washington than what we're observing now."

    White House economic adviser Gene Sperling blasted the S&P ruling on Saturday night, saying it "smacked of an institution starting with a conclusion and shaping any arguments to fit it."

    U.S. Treasury Secretary Timothy Geithner, who had indicated he might leave the administration once an increase in the debt ceiling was agreed, announced on Sunday that he was not doing so and would stay on.

    That relieves President Barack Obama of the difficult prospect of finding a replacement who could win Senate confirmation in Washington's bitterly partisan atmosphere.

    Treasury says that S&P's debt calculations were off by $2 trillion but the agency said that did not change the fact that the United States' longer-term debt prospects were worsening.

    Twin debt crises in the United States and Europe had policy makers scrambling to keep financial markets from panic.

    The ECB reactivated its sovereign bond-buying program on Thursday but purchased only small quantities of Irish and Portuguese bonds, seeking tougher austerity measures from Italy. That did nothing to stem market attacks on Italian assets.

    Berlusconi's plans entail moving up a balancing of the budget by one year to 2013, enshrining a balanced budget rule in the constitution and pushing through welfare and labor market reforms after talks with trade unions and employers.

    He gave little detail about how that would be achieved and the measures will take some time to enact.

    G-20, G-7 CRISIS CONTACTS

    South Korea said finance deputies from the Group of 20 big economies addressed the European crisis and U.S. sovereign rating downgrade in an emergency conference call on Sunday morning Asian time.

    French President Nicolas Sarkozy, who chairs the G7 and G20 forums this year, conferred with Britain's Prime Minister David Cameron on Saturday.

    "Both agreed the importance of working together, monitoring the situation closely and keeping in contact over the coming days," a spokesman for Cameron said.

    Over time, S&P's move could ripple through markets by pushing up borrowing costs and making it more difficult to secure a lasting recovery.

    S&P chief David Beers told "Fox News Sunday" that the Treasury Department's criticism of the credit rating agency's analysis was a "complete misrepresentation." Even with the debt limit agreement passed by the U.S. Congress, he said, "the underlying debt burden of the U.S. is rising and will continue to rise over the next decade."

    Asked about prospects for a further lowering of the U.S. rating, Beers said the agency's negative outlook meant that "risks are on the downside."

    ALARM IN GERMAN, FRENCH MEDIA

    Newspapers in Germany, the euro zone's reluctant bankroller, were both incredulous and gloomy on Sunday about the financial upheaval.

    Welt am Sonntag dedicated an entire section to global economic uncertainties, entitled "Der Crash" and wrote: "No one could have foreseen this dramatic crash and now the situation can only be endured with gallows humor."

    French newspapers carried grim headlines with Le Journal du Dimanche trumpeting "The world on the edge of collapse" with a sub-headline saying: "The week starting should be crucial. Markets from now on are living in fear of a crash."

    Washington's Asian allies rallied round the battered superpower, with Japan and South Korea both saying their trust in U.S. Treasuries remained unshaken and urging investors not to panic.

    "I expressed our country's position on the (G20 conference) call that there will be no sudden change in our reserve management policy," South Korean Deputy Finance Minister Choi Jong-ku told Reuters by telephone, referring to Seoul's heavy ownership of U.S. bonds.

    "There's no alternative that provides such stability and liquidity," added Choi.

    SPLITS IN ECB

    In some quarters including in the German government, there are doubts that Italy can be rescued by the European emergency fund, even if the fund were tripled in size, according to newsmagazine Der Spiegel.

    Italy's financial needs are so huge that it would overwhelm resources, according to government experts, Der Spiegel said in its online edition. Italy's public debt is about 1.8 trillion euros, or 120 percent of its national output.

    Germany has consistently said troubled euro-zone governments should focus on spending cuts and internal reforms, not bailouts. The European Financial Stability Fund currently has 440 billion euros ($632.5 billion) and would need to be expanded to cater for the likes of Italy and Spain.

    China, the largest foreign holder of U.S. debt, took the world's economic superpower to task for allowing its fiscal house to get into such disarray.

    On Sunday, a commentary in the People's Daily, the main newspaper of the ruling Communist Party, said Asian exporters, who depend on demand from the United States, could be among the biggest victims of the mounting U.S. economic woes.

    "The lowering of the United States' long-term sovereign credit rating has sounded a warning bell for the international currency system dominated by the U.S. dollar," said economist Sun Lijian, writing in the paper.

  4. #74
    Member EmpireGlobalfx's Avatar
    Join Date
    Jun 2011
    Location
    New Zealand
    Posts
    311

    Post ECB buying steadies Europe, U.S. downgrade weighs

    (Reuters) - Italy and Spain's borrowing costs fell on Monday as reports filtered in that the European Central Bank was buying their bonds, lifting European shares and partly overcoming jitters about a rating downgrade for U.S. debt.

    Five-year yields in Italy and Spain fell more than 80 basis points. Spreads with German debt narrowed and the cost of insuring against default dropped.

    Gold nonetheless soared to a new record above $1,700 an ounce on safe-haven buying and the dollar weakened against a basket of major currencies.

    Investors were digesting a weekend of talks between industrialized countries aimed at ensuring the smooth functioning of financial markets following agency S&P's cut in its U.S. rating late on Friday to AA-plus from AAA.

    Focusing on the euro zone crisis, the ECB agreed to intervene in the Italian and Spanish debt markets to reduce borrowing costs that are close to prohibitive.

    "The downgrade to the U.S. is not great. These markets are going to remain unsettled for a while, we had recommended investors to raise cash in anticipation of this volatility," said Mike Lenhoff, chief strategist at wealth manager Brewin Dolphin.

    "If the ECB is going to provide some support to the bond markets that could create some sort of relief, buying opportunities could emerge in the sold off cyclical areas, but we are looking for more stability first."

    MSCI's all-country world index was down slightly, recovering as Europe gained. Last week's heavy bout of risk aversion chopped around $2.5 trillion off the value of the index.

    Emerging market stocks were still being hit, losing around 2 percent on Monday.

    European shares, as measured by the FTSEUrofirst 300 index shrugged off opening losses and moved into positive territory, rising a quarter of a percent as news filtered in that the ECB was buying Italian and Spanish bonds.

    EASING PAIN

    The ECB moves followed criticism last week that the bank had not addressed pressure on Spain and Italy when they bought Portuguese and Irish debt last week.

    Traders said Monday's buying was focused on the 5-year sector of the curve, where Italian yields dropped to around 4.6 percent, while the Spanish equivalent was around 4.5 percent.

    "They're doing 20 to 25 million (euro) clips and they're spreading it around the market," said a trader. "We expect them to do billions today."

    The euro rose against the dollar and trimmed losses against other currencies.

    The U.S. currency fell across the board after the S&P downgrade, struggling around record lows against the Swiss franc and the yen.

    But the euro's gains were limited, and some analysts expected it would struggle to gain significantly, as bond purchases, while adding temporary liquidity to stressed bond markets, would do little to improve the fiscal problems in the region.

    "(ECB bond buying) will have a short term effect. It won't have any lasting positive impact on the euro," said Richard Falkenhall, currency strategist at SEB in Stockholm.

    "Even if the ECB buys Italian bonds, private investors will just sell and off-load their Italian risk ... The ECB will have to buy those bonds constantly just to keep yields stable," he said.

  5. #75
    Member EmpireGlobalfx's Avatar
    Join Date
    Jun 2011
    Location
    New Zealand
    Posts
    311

    Post Oil falls more than 3 percent after U.S. downgrade

    (Reuters) - Oil dropped more than 3 percent on Monday, as worry about an economic slowdown spread after Standard & Poor's cut the United States' top-tier credit rating late on Friday.

    Fear gripped financial markets as the fallout from the historic downgrade of the U.S. debt rating by S&P drowned out pledges of assistance from Europe's central bank and soothing words from the Group of Seven.

    U.S. stocks tumbled early, tracking a sharp drop in global equity markets following S&P's move. .N

    Brent crude fell $3.60 to $105.77 a barrel by 10:34 a.m. EDT, after earlier falling as low as $105.45. U.S. crude fell $3.42 to $83.46 after sliding to its lowest intraday level since November at $82.52 a barrel in early trade.

    "In the tumultuous aftermath of the U.S. downgrade from S&P, the world also is downgrading the oil market," said Phil Flynn, analyst at PFGBest Research in Chicago.

    Goldman Sachs said on Monday it maintained overweight recommendation on commodities and oil relative to other assets, although it added that risk to its constructive commodity views had risen.

  6. #76
    Member EmpireGlobalfx's Avatar
    Join Date
    Jun 2011
    Location
    New Zealand
    Posts
    311

    Post Asia shares nosedive; gold scales another peak

    (Reuters) - Stock markets plunged on Tuesday and the Swiss franc held near a record high as investors dumped riskier assets in a global rout triggered by fears that political leaders are failing to tackle debt crises in Europe and the United States.

    Major indexes across Asia tumbled between 2 and 7 percent, following a drop of more than 6 percent on Wall Street on Monday in the first trading session since the historic downgrade of the United States' AAA credit rating by Standard & Poor's.

    S&P futures fell more than 3 percent at one point on fears that the fallout from the downgrade could help push the U.S. economy back into recession. By midday futures were down 2.1 percent ahead of the European market opening. .N

    The panicked flight-to-safety lifted gold to the latest in a string of record highs, boosted the Swiss franc and the yen and lifted Japanese government bonds and, ironically, U.S. Treasuries -- the asset directly affected by the downgrade.

    "We have been cautious about the unfolding events in Europe for some time and are concerned about China slowing more than what is priced into the market," said Alex Hill, co-founder of Singapore-based hedge fund Tantallon Capital, which manages more than $300 million in assets.

    "The macroeconomic picture outside of Asia is bleak and Asia's ability to remain immune is doubtful in the extreme."

    MSCI's All-Country World Index .MIWD00000PUS has fallen about 14 percent so far this month, wiping around $3.8 trillion off company values.

    The worsening market turmoil puts significant pressure on the U.S. Federal Reserve at its regular policy meeting on Tuesday to announce some fresh measures of support for a damaged U.S. economy.

    While the U.S. downgrade late on Friday was the most obvious blow to confidence, investors have also been spooked by data suggesting the U.S. economy was stalling and Europe's ever-worsening sovereign debt crisis.

    There are also concerns about China's inflation rate, which analysts fear could curb Beijing's ability to stimulate demand to offset a global slowdown.

    Chinese data on Tuesday failed to offer respite, showing consumer price inflation hugging three-year highs in July.

    "This is the type of data that should have prompted the PBoC to hike interest rates, but given the current turmoil in financial markets, we expect them to delay it," said Wei Yao, an economist with Societe Generale in Hong Kong.

    EMOTIVE TRADING

    Japan's Nikkei share average .N225 was down 3.6 percent and MSCI's broadest index of Asia Pacific shares outside Japan .MIAPJ0000PUS shed 4 percent by midday, but both were off early lows.

    Australia's benchmark .AXJO fell 1 percent, Hong Kong's Hang Seng finance/markets/index?symbol=hk%21hsi">.HSI tumbled 5.6 percent and South Korea's KOSPI .KS11 slid 6.4 percent, also clawing back some initial losses.

    Seoul shares slid more than 9 percent at one point but were supported by buying by state pension funds and other public funds. A stock exchange official said it may ban short selling of shares to stabilize markets.

    "It's very emotive trading," said Simon Burge, chief investment officer at ATI Asset Management in Australia. "Fundamentals would have to deteriorate quite significantly to catch up with where share prices are."

    Whilst traders in Asian markets such as South Korea and Japan reported foreign money fleeing stocks, many asset managers maintained that the region still offers the best prospects.

    "From a macro, top-down perspective, we expect the relative strength of the region's fundamentals to continue to attract incremental foreign capital," said RBS Asia Pacific equity strategists in a note.

    "From a sector standpoint, it still appears that the one sector standing above any other for the delicate trade-off between risk and reward is telecoms. Valuations or expectations cannot be said to be anywhere near excessive levels."

    Telecoms was the least-hit .MIAPJTC00PUS sector in the MSCI Asia ex-Japan index, falling less than 3 percent as investors looked to defensive plays.

    Financial stocks have been amongst the hardest hit globally, with some investors fearing that in a worst case scenario the debt crises on both sides of the Atlantic could prompt a repeat of the money market seizure that followed the collapse of Lehman Brothers in 2008.

    "Market players are seeking emergency refuge and fleeing to safe assets," said a customer trader at a major Japanese bank in Tokyo. "In the money market, where there is heightened demand for dollars, dollar lenders are running away."

    THIS TIME IT'S DIFFERENT

    But while the steepling falls in equities reminded many of the shockwaves that swept through markets in the wake of Lehman's collapse, money and corporate credit markets are not yet seeing a repeat of the strains witnessed three years ago.

    "The Lehman moment was based on a systemic risk to the banking sector," said Olivier d'Assier , managing director for Europe and Asia at Axioma, which provides risk models and portfolio construction tools for investors and fund managers.

    "This isn't related to bad assets that the banking sector has on its books, it's related to the fact that the economic growth isn't there to support the kind of national debt levels and benefits payout that politicians have promised."

    The dollar was down 0.7 percent at 0.7494 Swiss franc, near an all-time low around 0.7483 reached the previous day. The euro plunged to a record low of 1.0605 francs, then traded down 0.5 percent at 1.0651.

    "The yen and the Swiss franc are drawing extremely strong demand as plunges in global shares are having a major psychological impact, forcing investors to refrain from holding risk assets," said Teppei Ino, a currency analyst at Bank of Tokyo-Mitsubishi UFJ.

    The dollar was down 0.8 percent at 77.15 after falling to an intraday low of 77.05, not far off the record low of 76.25 yen reached in mid-March.

    Gold, a traditional refuge from financial storms, hit a record above $1,753 an ounce.

    JP Morgan (JPM.N) said on Monday it expected spot gold to climb to $2,500 an ounce or higher by year-end, following the downgrade of U.S. debt. The U.S. bank said its previous estimate of $1,800 was "too conservative".

    U.S. crude oil futures fell nearly $4, or around 4.5 percent, to trade around $77.60 a barrel.

    But as many traders hit the sell button, Anthony Bolton, one of Britain's best known equity fund managers who now runs the firm's China Special Situations Fund (FCSS.L), saw a buying opportunity.

    "History shows that normally extreme equity market volatility as we are now experiencing should be seen as a time of opportunity rather than a time to become more defensive," he said in a statement.

  7. #77
    Member EmpireGlobalfx's Avatar
    Join Date
    Jun 2011
    Location
    New Zealand
    Posts
    311

    Post Japan on watch as yen rises and stocks plunge

    (Reuters) - Japanese policymakers voiced growing alarm on Tuesday as the yen inched back to highs scaled prior to last week's intervention and global stock markets crumbled under mounting fears of a new financial crisis.

    Finance Minister Yoshihiko Noda said he would watch markets with a sense of urgency because they are in a severe state, while Bank of Japan Governor Masaaki Shirakawa said he needs to be particularly mindful of the risks that a strong yen poses to the Japanese economy.

    The yen approached its highest level versus the dollar since Tokyo's intervention on August 4, while Asian shares went into a nosedive after a 6 percent decline on Wall Street as the U.S. government's loss of its top credit rating and a piecemeal response to Europe's sovereign debt woes frayed investors' nerves.

    "I will pay close attention to market movements with a sense of urgency today," Noda told reporters when asked about the stock market falls and a persistently strong yen despite Japan's solo intervention last week to stem its rise.

    The Japanese currency was trading at around 77.13 yen against the dollar, up about 0.8 percent on the day and close to a four-month high of 76.29 yen hit last week before Tokyo intervened and way off post-intervention levels beyond 80 yen to the dollar.

    Japan sold a record of more than 4 trillion yen last Thursday to prevent the yen's climb from derailing the economy's recovery from the damage wrought in March by the triple-blow of a massive earthquake and tsunami and a radiation crisis at a damaged nuclear power plant.

    The central bank also stepped in, loosening monetary policy by boosting its asset buying scheme by half to 15 trillion yen in a move aimed both at making the intervention more effective and shoring up market confidence.

    The effects of the joint effort, Japan's third foray into currency markets in less than a year, have worn off quickly as fears that twin debt crises in the United States and Europe could tip the world economy back into recession drove investors into low-risk assets such as the yen, gold and the Swiss franc.

    Additional solo intervention could also meet with limited success as Japan is unlikely to get the necessary cooperation from the Group of 20 and Group of Seven countries.

    "For Japan, there aren't really any policy alternatives left to stop yen strength," said Junya Tanase, chief foreign exchange strategist at JPMorgan Bank in Tokyo.

    "It is difficult for G20 to coordinate on policy because the group is so big. The G7 can coordinate to provide liquidity, but their basic stance is one that is critical of intervention."

    BOJ Governor Shirakawa told parliament he still expects Japan's economy to return to moderate growth, but highlighted growing discomfort with a strong yen and increased overseas risks to the economy.

    "It's happening against the backdrop of weakness in the global economic recovery, and uncertainty over U.S. and European fiscal problems," Shirakawa said, referring to the rising yen.

    "These factors, coupled with the short-term downside effect from yen rises, hurt (Japan's business) sentiment."

    Minutes of the central bank's meeting in July showed that its board was increasingly worried about the global economic outlook and two of its members were already advocating further monetary easing.

    Despite Japan's own troubles with public debt twice the size of the $5 trillion economy, the post-quake recession and a political stalemate, its deep bond market is seen as one of the relatively few safe investments both by Japanese and foreign investors.

    Global stock markets plunged on Monday as the G7 finance ministers' and central bankers pledge over the weekend to help smooth markets if needed provided little reassurance.

    The European Central Bank swept into the bond market to buy up Italian and Spanish debt and sling a safety net under the euro zone's third- and fourth-largest economies. But bickering persisted in Europe over a longer-term rescue plan.

    Noda said Monday's G7 statement helped to ease market uneasiness and he would keep in close contact with his G7 partners in the coming weeks.

    Noda also told lawmakers he does not intend to resign his post, rejecting a report in the Sankei newspaper that he will give up the role of finance minister in a bid to replace the prime minister.

  8. #78
    Member EmpireGlobalfx's Avatar
    Join Date
    Jun 2011
    Location
    New Zealand
    Posts
    311

    Post World shares rebound after Fed pledge to keep rates low

    (Reuters) - World shares bounced back strongly from recent losses on Wednesday as investors took comfort from the Federal Reserve's pledge to keep interest rates near zero for two more years.

    European equities gained at the open, with the FTSEurofirst 300 up 1 percent, adding to a 1.2 percent rise from Tuesday.

    The MSCI all-country world index, which has fallen as much as 20 percent from a May high, was up 1.1 percent. Emerging market shares were up more than 2.3 percent.

    Investor sentiment was boosted by the Fed's unprecedented announcement that it was likely to keep interest rates at extraordinary low levels through to mid-2013.

    They also took comfort from data showing China's export growth accelerating in July, calming fears that weak demand from Europe and the United States would hit the world's second-biggest economy.

    "Selling by short-term investors seems to have run its course," said Kenichi Hirano, a strategist at Tachibana Securities in Japan.

    Goldman Sachs said a third round of asset-buying quantitative easing from the Federal Reserve was likely following Tuesday's statement.

    "We now see a greater-than-even chance that (it) will resume quantitative easing later this year or in early 2012. We have changed our call because (the) statement suggests that the committee's reaction function to incoming economic news is more dovish than we had previously thought," Jan Hatzius, chief economist at the firm, said in a note.

    DOLLAR STEADY AFTER FALL

    The dollar fell three-quarters of a percent against major currencies, as prospects for minimal dollar-interest rates sent buyers elsewhere.

    The Swiss National Bank said it was expanding measures to fight against the Swiss franc's strength. Investors have been pouring into the currency as a safe haven during recent market and economic weakness.

    German government bonds opened higher, tracking moves in U.S. Treasuries.

    Yields on shorter-dated U.S. debt plunged overnight with two-, three- and five-year notes all setting new lows and analysts speculated that the central bank would ultimately need to implement new stimulus measures.

    "There's a fear that the outlook is very bad if they're committing until 2013," said a trader.
    Attached Images Attached Images Follow the latest news @ Empire Global-nikkei-jpg 

  9. #79
    Member EmpireGlobalfx's Avatar
    Join Date
    Jun 2011
    Location
    New Zealand
    Posts
    311

    Post Wall Street slumps on worries over French banks

    (Reuters) - Wall Street stocks fell sharply on Wednesday on fears over possible trouble in the French banking sector that has large exposure to shaky peripheral European debt.

    U.S. financial stocks led the decline as the KBW bank index slid 6.2 percent. Large financial institutions fell sharply, with Bank of America Corp down 12.2 percent to $6.93.

    French banks were hit hard in Paris trading. Societe General, where U.S. traders have focused their attention, fell 16 percent. BNP Paribas fell 13.2 percent.

    "France owns $350 billion worth of Italy's debt on their banks' books," Dave Rovelli managing director of U.S. equity trading at Canaccord Adams, who said fears of a failure in the sector were hitting U.S. markets.

    The Dow Jones industrial average dropped 342.96 points, or 3.05 percent, to 10,896.81. The Standard & Poor's 500 Index fell 33.66 points, or 2.87 percent, to 1,138.87. The Nasdaq Composite Index shed 72.56 points, or 2.92 percent, to 2,409.96.

    Indexes gave up much of Tuesday's snap-back rally. The S&P 500 is down nearly 18 percent since a peak at the start of May. Worries about the U.S. economy and high levels of public debt in Europe have sent stock cascading over the last two weeks.

  10. #80
    Member EmpireGlobalfx's Avatar
    Join Date
    Jun 2011
    Location
    New Zealand
    Posts
    311

    Default

    Asia stocks down but fall limited by U.S. futures



    (Reuters) - Asian stocks fell 1-2 percent on Thursday as the fallout from Wall Street's 4 percent drop overnight limited by a rise in U.S. stock futures, while gold climbed above $1,800 an ounce to a new record, reflecting fears over Europe's worsening financial crisis.


    The Australian dollar, often a measure of investors' willingness to take risks, rose toward $1.02 as Asian equities pulled back from their lows, suggesting traders and investors were being nimble rather than selling with blinders on.

    Fast-moving rumors about a sovereign debt downgrade of France as well as talk doubting the health of French bank swirled in Europe, causing the biggest widening in the benchmark index of European credit default swaps since the credit crunch in 2008.

    "The market is in a bit of heat-seeking missile mode looking for vulnerabilities around the world, and Europe is obviously in its sights at this point in time," said Grant Turley, senior strategist at ANZ in Sydney.

    Japan's Nikkei share average rose 1.5 percent in early trade, still not far from the five-month low hit on Tuesday.

    The benchmark MSCI Asia Pacific ex-Japan stocks index fell 1.2 percent, with commodity-related stocks hit hardest. The index has fallen 13 percent so far in August, in line with the all-country world index, suggesting investors are not being so discriminating in the equity sell-down.

    The euro was still vulnerable, especially against the yen and Swiss franc, but recovered some ground as Asian equities edged up from their lows.

    The euro was at $1.4175, largely unchanged on the day and locked within a tight trading range by a debt crisis in Europe and a U.S. slowdown.

    The Australian dollar was up 0.3 percent to $1.0190, holding above Tuesday's drop to below parity but well off from $1.10 where the currency started the month.

    Spot gold prices were up 0.5 percent to $1,802.89 an ounce after earlier hitting an all-time high of $1,813.79.

    The undisputed safe haven has risen 11 percent so far this month and is up 27 percent in 2011.

Similar Threads

  1. Latest trading news
    By Finbar in forum Fundamentals
    Replies: 4
    Last Post: 10-13-2014, 17:45
  2. 3 Rules you need to follow to become a good swing trader
    By ertgh in forum Trading discussion
    Replies: 4
    Last Post: 01-04-2013, 14:08

Tags for this Thread

100, 2011, abc, adviser, alarm, analysis, automatic, average, broker, cfd's, change, channel, closing, color, commission, comparison, demo, design, dmi, ecn, empire, empireglobalfx, eur, europe, eurusd, experts, forecast, foreign currencies, forex, free, fsa, fund manager, fundamentals, german, gold, gold trading, hedge, hedging, high, home, how to, ichimoku, index, indicator, indicators, information, intraday, investment, japan, live, long term, low, main, mam, managed, managed accounts, markets, metatrader, money, moving average, nasdaq, news, offer, online, partnership, price action, profit, profitable, rating, real, research, resistance, review, sales, scalping, security, sells, short term, signal, signals, simple, singapore, slippage, spanish debt, spread, squeeze, step by step, stocks, stop, stop ea, strategy, support, system, systems, test, time, tool, trader, trading, trading platform, trailing, trend, usd, video

Posting Permissions

  • You may not post new threads
  • You may not post replies
  • You may not post attachments
  • You may not edit your posts
  •