DAILY FOREX FUNDAMENTAL OVERVIEW
EUR
“We fear things are likely to get worse before they get better”
Spain sank into recession in the first quarter of 2012. The economy contracted 0.3 per cent, after shrinking by the same amount in the previous quarter, Madrid-based National Statistics Institute data showed on Monday.
“We fear things are likely to get worse before they get better,” Martin van Vliet, a senior euro-region economist at ING Bank in Amsterdam said in a note.
“The recession will almost certainly deepen in the coming quarters, pushing unemployment to even more dramatic highs.”
“The wheels are very clearly coming off the economy,” Jefferies economist David Owen said.
“It wouldn't surprise me to see a very significant decline in GDP both in the second and third quarters this year, and it's still reasonably easy to envisage GDP to be down about 1.5 percent this year.”
USD
“What was encouraging [in the personal income report] was that the income numbers improved. Our expectation is that job growth does increase gradually”
- Peter Newland, an economist at Barclays Capital Inc.
U.S. consumer spending was boosted by higher than expected incomes, said the Bureau of Economic Analysis on Monday. Household purchases increased 0.3 per cent. Incomes gained 0.4 per cent, the most in three months.
“This report sets up fairly well for the second quarter,” said Peter Newland, a U.S. economist at Barclays Capital Inc. in New York.
“What was encouraging was that the income numbers improved. Our expectation is that job growth does increase gradually” this quarter, he said.
“The trend is good from the perspective that incomes are outpacing spending, so we don't see consumers dipping into savings as much,” said Kathy Lien, head of research at GFT Forex.
“Of course, markets like increased spending, but in this situation it's a healthy trend in terms of reducing household debt levels,” she said.
GBP
“This is year three of a global recovery, yet growth is still anemic”
- Jonathan Plant, market analyst at Liberum Capital Ltd.
U.K. stocks closed lower on Monday.
The benchmark FTSE 100 Index lost 0.68%, or 39.33 points, to 5,737.78. The FTSE All-Share Index declined 0.64%, or 19.30 points, to 2,984.67.
“This is year three of a global recovery, yet growth is still anemic,” said Jonathan Plant, market analyst at Liberum Capital Ltd. in London.
“Conditions feel like May 2010 with an absence of bid or offer in the equity market. This is a macro- rich week. The globe continues to be attached to the austerity- growth pendulum.”
CHF
“Investors are still reluctant to act and want more clarity amid continuing uncertainty”
- Peter Buergler, a trader at Luzerner Kantonalbank AG
Swiss stocks declined on Monday.
The Swiss blue-chip index SMI, a measure of the largest and most actively traded companies, retreated 0.33%, or 20.02 points, to 6,096.34. The broader Swiss Performance Index fell 0.12%, or 6.79 points, to 5,697.40.
“The stock markets are in a kind of conflict between good quarterly results of companies and economic data that tend to be worse than expected, especially in Europe,” said Peter Buergler, a trader at Luzerner Kantonalbank AG in Lucerne, Switzerland.
“Investors are still reluctant to act and want more clarity amid continuing uncertainty.”
JPY
“We’re quite optimistic about Asia”
- Adrian Zuercher, a fund manager at Credit Suisse Asset Management
Banks in Japan were closed in observance of Showa Day.
Japanese stocks retreated on Friday. The Nikkei 225 lost 0.43%, or 40.94 points, to 9,520.89. The broader Topix fell 0.72%, or 5.83, to 804.27.
Asian stocks closed in green on Monday.
“We’re quite optimistic about Asia,” said Adrian Zuercher, a fund manager at Credit Suisse Asset Management in Hong Kong.
“It’s clear that China and the rest of Asia will be generating a higher growth rate compared to the rest of the world.”
Asad Khan
Financial Analyst (CFB) Trading Team
EUR
“We fear things are likely to get worse before they get better”
Spain sank into recession in the first quarter of 2012. The economy contracted 0.3 per cent, after shrinking by the same amount in the previous quarter, Madrid-based National Statistics Institute data showed on Monday.
“We fear things are likely to get worse before they get better,” Martin van Vliet, a senior euro-region economist at ING Bank in Amsterdam said in a note.
“The recession will almost certainly deepen in the coming quarters, pushing unemployment to even more dramatic highs.”
“The wheels are very clearly coming off the economy,” Jefferies economist David Owen said.
“It wouldn't surprise me to see a very significant decline in GDP both in the second and third quarters this year, and it's still reasonably easy to envisage GDP to be down about 1.5 percent this year.”
USD
“What was encouraging [in the personal income report] was that the income numbers improved. Our expectation is that job growth does increase gradually”
- Peter Newland, an economist at Barclays Capital Inc.
U.S. consumer spending was boosted by higher than expected incomes, said the Bureau of Economic Analysis on Monday. Household purchases increased 0.3 per cent. Incomes gained 0.4 per cent, the most in three months.
“This report sets up fairly well for the second quarter,” said Peter Newland, a U.S. economist at Barclays Capital Inc. in New York.
“What was encouraging was that the income numbers improved. Our expectation is that job growth does increase gradually” this quarter, he said.
“The trend is good from the perspective that incomes are outpacing spending, so we don't see consumers dipping into savings as much,” said Kathy Lien, head of research at GFT Forex.
“Of course, markets like increased spending, but in this situation it's a healthy trend in terms of reducing household debt levels,” she said.
GBP
“This is year three of a global recovery, yet growth is still anemic”
- Jonathan Plant, market analyst at Liberum Capital Ltd.
U.K. stocks closed lower on Monday.
The benchmark FTSE 100 Index lost 0.68%, or 39.33 points, to 5,737.78. The FTSE All-Share Index declined 0.64%, or 19.30 points, to 2,984.67.
“This is year three of a global recovery, yet growth is still anemic,” said Jonathan Plant, market analyst at Liberum Capital Ltd. in London.
“Conditions feel like May 2010 with an absence of bid or offer in the equity market. This is a macro- rich week. The globe continues to be attached to the austerity- growth pendulum.”
CHF
“Investors are still reluctant to act and want more clarity amid continuing uncertainty”
- Peter Buergler, a trader at Luzerner Kantonalbank AG
Swiss stocks declined on Monday.
The Swiss blue-chip index SMI, a measure of the largest and most actively traded companies, retreated 0.33%, or 20.02 points, to 6,096.34. The broader Swiss Performance Index fell 0.12%, or 6.79 points, to 5,697.40.
“The stock markets are in a kind of conflict between good quarterly results of companies and economic data that tend to be worse than expected, especially in Europe,” said Peter Buergler, a trader at Luzerner Kantonalbank AG in Lucerne, Switzerland.
“Investors are still reluctant to act and want more clarity amid continuing uncertainty.”
JPY
“We’re quite optimistic about Asia”
- Adrian Zuercher, a fund manager at Credit Suisse Asset Management
Banks in Japan were closed in observance of Showa Day.
Japanese stocks retreated on Friday. The Nikkei 225 lost 0.43%, or 40.94 points, to 9,520.89. The broader Topix fell 0.72%, or 5.83, to 804.27.
Asian stocks closed in green on Monday.
“We’re quite optimistic about Asia,” said Adrian Zuercher, a fund manager at Credit Suisse Asset Management in Hong Kong.
“It’s clear that China and the rest of Asia will be generating a higher growth rate compared to the rest of the world.”
Asad Khan
Financial Analyst (CFB) Trading Team
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