- Euro zone economy shows signs of recovery
February 05 2013 10:41 AM
(Reuters) - The euro zone's battered economy is probably recovering but the gulf between its two biggest members is widening, according to a survey on Tuesday that showed business optimism in the bloc at an eight-month high. Markit's Eurozone Composite PMI, based on business activity across thousands of companies, and a good gauge of economic growth, rose in January to a 10-month high of 48.6 from 47.2 in December - an improvement on the preliminary reading of 48.2. While still below the 50 mark that divides growth and contraction, where it has been since February last year, it has risen for the third straight month.
- How Ugly Did Europe Just Get?
February 05 2013 10:13 AM
Monday, global financial markets got beat down on what was effectively a repricing of sovereign and political risk in Europe. Bond yields rose, bank stocks fell, and broadly, risk assets traded weakly. Europe just looked pretty ugly Monday. Beginning in Italy, 10-year government bond yields crept to two-month highs Monday on fears that former Prime Minister Silvio Berlusconi may be gaining in the polls ahead of the upcoming elections.
- Dow To 14,000 … And Beyond?
February 05 2013 10:02 AM
If you’ve been a hibernating bear lately, you’ve missed a ton of positive news, as U.S. construction spending rose, ISM manufacturing data beat expectations and the country added 157,000 jobs. In addition, the JP Morgan Global Purchasing Managers’ Index rose to 51.5, staying above the expansion level for a second month in a row. The strengthening data, as well as improving investor sentiment, helped the Dow hit 14,000 for the first time since 2007.
- Bernanke Blows Bond Bubble into Stocks
February 05 2013 9:43 AM
Ben Bernanke was instrumental in creating a bubble in U.S. Treasuries. His actions have served to inflate it to the point that it has now become the greatest bubble in the history of global investment. Not only has the Chairman of the Federal Reserve guaranteed that current bond holders will get destroyed once the sovereign debt bubble bursts, but he has also begun to inflate yet another massive bubble in U.S. equity prices.
- Is Main Street Smiling With Ben Bernanke?
February 04 2013 1:24 PM
Considering the strong start to the year for equities, Ben Bernanke’s smile must be getting as big as the Federal Reserve’s balance sheet. The Fed Chairman is on record defending the wealth effect, which involves forcing investors into equities by punishing them through record low interest rates and quantitative easing. After an early lackluster reception from the latest QE announcements, Mr. Market is feeling quite optimistic these days.
- Politics Threaten the Eurozone Recovery
February 04 2013 8:46 AM
The euro fell under pressure on Monday morning as political factors weighed on the currency. On Monday morning, the euro traded at 1.3593 as eurozone leaders began a series of meetings this week ahead of the European Union Summit on February 7-8. Spanish Prime Minister Mariano Rajoy unsettled markets when the Spanish newspaper, El Pais, reported that Rajoy and his party were involved in an illegal payment scheme.
- Peter Schiff - The Bernanke Shock
February 04 2013 8:37 AM
The financial world was shocked this month by a demand from Germany's Bundesbank to repatriate a large portion of its gold reserves held abroad. By 2020, Germany wants 50% of its total gold reserves back in Frankfurt - including 300 tons from the Federal Reserve. The Bundesbank's announcement comes just three months after the Fed refused to submit to an audit of its holdings on Germany's behalf. One cannot help but wonder if the refusal triggered the demand.
- Peter Schiff - The Biggest Loser
February 01 2013 1:50 PM
In Switzerland, it's not just the clocks that are cuckoo. Over the past four years Swiss politicians and central bankers have gone on an unprecedented buying spree of foreign exchange reserves. In 2012, their cache swelled to as much as $420 billion worth of various currencies, primarily the euro. This figure is a seven-fold increase since 2008 and equates to 70% of the country's annual GDP. The sum translates to $200,000 per family of four, enough to keep the Swiss in clocks, chocolates, and fondue for many years to come. The Swiss leadership will claim the money has been "invested" with an eye to the future, but what they've done is impoverished themselves in the present. Although such a decision seems perverse, it makes perfect sense when seen through the lens of today's presiding economic thinking.
- Dollar hits 14-month low vs euro; yen weakens
February 01 2013 10:28 AM
The dollar fell to a 14-month low against the euro on Friday after U.S. jobs data reaffirmed expectations the Federal Reserve will maintain its stimulative policy and as euro zone factories had their best month in almost a year.
- Euro Reaches New Highs Ahead of ECB Loan Repayment Announcement
February 01 2013 9:21 AM
Friday morning began with the euro pushing past a new 13 month high as the currency's rally picked up again. The common currency traded at 1.3648 on Friday morning. The euro rose steadily as investors waited for news from the European Central Bank, which is planning to announce more loan repayments at 11:00 GMT. The repayment of the ECB's emergency three year loans is viewed by most as a sign that the euro debt crisis is easing.
- Weekly analysis
February 01 2013 9:02 AM
This week the euro continued on its march towards the 1.4000 level, while the Japanese yen continued to weaken against almost every major currency. The moves were of course driven by the fundamental events of the week, which included a surprise contraction on US economic growth. GDP contracted by -0.1% as opposed to the anticipated 1.1% level that the markets were expecting. In the eurozone, Italian bond yields were at their lowest level for 2 years, indicating that investors are finally starting to become less concerned with the financial crisis that has been threatening the region over recent years.
- 1/2/2013 - The Current Market Sentiment
February 01 2013 5:08 AM
The single currency could continue its ascending way after talking out 1.35 finally versus the greenback this week reaching 1.2645 cheered by better than expected release of EU Manufacturing PMI data of January drove it composite up to 47.9 while the market was waiting for 47.5 as the first reading came before from only 46.1 in December as Dec Italian PMI manufacturing index came at 47.8 from 46.7, the Spanish one came up to 46.1 from 44.6 and the germane rose to 49.8 from 48.8 in the first reading of it and from 46 in December to lead the index to this considerable rising despite the falling of the French one to 42.9 as the first reading came from 44.6.
- Euro's Rally Ends on German Woes
January 31 2013 9:16 AM
The euro slid on Thursday morning after a two day rally that pushed the currency nearly to $1.36. The euro slipped a bit after poor German data put a lid on optimism in the eurozone, and traded at 1.3553. After eurozone banks repaid a large chunk of the European Central Bank loans early this week, investor confidence returned and the euro surged. The repayment showed that the region's financial system was finding its feet after a three year struggle, and that banks were making the move toward independent financing.
- January Jobs Data Will Disappoint; Fed to Keep Monetizing Debt
January 31 2013 9:10 AM
The recent spate of better data on initial jobless claims has caused bond yields to rise, stock prices to rally and gold shares to tumble in the last few days. For the 6th time since 2010, an oasis of improving economic data (that has proven to be ephemeral each time in the past) is once again giving investors the false signal of a robust and sustainable recovery. This has in turn caused investors to once again wonder when the Fed would finally stop buying assets from banks and raise interest rates, which have been at zero percent for over four years.
- Peter Schiff - Immediate Reaction To Weaker GDP Report
January 30 2013 1:09 PM
Today's weaker than expected GDP report shows just how out of touch most professional economists remain with respect to the fundamental weakness of the US economy. After more than four years of nearly never ending monetary stimulus and more than $5 trillion worth of new federal debt, the economy remains stuck in a serious recession. The report shows that federal stimulus and deficit spending can't create sustainable economic growth.
- Euro Breaks $1.35 Barrier
January 30 2013 9:39 AM
The euro reached a 14 month high on Wednesday morning, pushing above $1.35 for the first time since December of 2011. The currency traded at 1.3513. The euro's rebound is largely attributed to the European Central Bank's efforts to do “whatever it takes” to keep the currency together. After rumors of a Greek exit from the currency and worries that the entire union would collapse, the region has stabilized allowing the currency to grow.
- US GDP Falls 0.1 Percent In Fourth Quarter, Inventories to Blame
January 30 2013 9:35 AM
Fourth quarter GDP for the United States was reported as contracting 0.1 percent from the prior quarter, below economist forecasts of of 1.1 percent growth. The rate of contraction was also well below the 3.1 percent growth seen in the third quarter and, if first quarter GDP remains weak, the U.S. risks entering a second recession in four years.
- EU Financial Tax Portends Loss of Market Leadership
January 29 2013 3:22 PM
Although it was barely noticed by the American press, on January 22nd, EU finance ministers approved a new "Financial Transactions Tax" (FTT) that has implications for market competitiveness around the world. The move was conceived as a Franco-German initiative and was supported by seven other EU nations, including the entire bloc of highly indebted southern tier nations, to reach the minimum nine nations required to press ahead under the EU's so-called, 'enhanced co-operation procedures'. If at least one of the transacting parties involved is an EU resident, the tax will impose a one tenth of one percent tax (on both sides of a financial transaction) on secondary market trades in equities, bonds, securities and REPOS. Derivatives will be taxed at a lower one hundredth percent.
- Peter Schiff - Animated Oprah Interviews Bernanke
January 29 2013 1:50 PM
Earlier this month Oprah Winfrey grabbed headlines with her blockbuster interview with serial doper and international pariah Lance Armstrong. Now, an animated Oprah keeps the momentum going with a harrowing interview with Federal Reserve Chairman Ben Bernanke, another major figure who is equally dependent on artificial stimulus to juice his job performance.
- Eurozone Lending Drops and Opens the Door for ECB Rate Cut
January 29 2013 9:04 AM
The euro was strong on Tuesday morning, trading steadily below $1.35. The currency has been on a high since Friday's announcement that eurozone banks will repay their European Central Bank loans earlier than expected. On Friday, eurozone banks showed their growing strength as they announced they would repay 137.16 billion euros worth of three year loans that they borrowed from the ECB. The money, which was lent in both December of 2011 and February of 2012 will be returned on January 30th.