16-05-12 - Greece in turmoil

The battle to form a government in Greece has ended in failure with the SYRIZA party unwilling to join a coalition.  The political vacuum will therefore continue in the short term and this will trigger additional pressures in the financial sector.  There will be additional pressure for ECB action to stabilise the situation.

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14-05-12:  Euro faces another testing week

Political brinkmanship is likely to dominate the week ahead as Greek political parties look to position themselves for the potential second general election while Germany considers the cost of a possible Greek Euro exit.

More:  Weekly preview - New European politics, new Euro low

 

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MARKET UPDATE  - The Euro has dipped to fresh 2012 lows against the US dollar with failure to form a coalition government and the prospect of fresh elections triggering fresh turmoil in the European banking sector and putting fresh downward pressure on the Euro as risk appetite triggered wider US dollar support. 15-05-12:  21.00 GMT

MARKET UPDATE  - The Euro has remained generally on the defensive as fears surrounding the Greek situation again dominates markets. So far, it has proved impossible to form a coalition government, increased the threat of fresh elections and the Euro has weakened to near 1.29. 13-05-12:  20.30 GMT

MARKET UPDATE  - The Euro has remained generally on the defensive during the past 24 hours as fears surrounding the Greek situation continues to undermine confidence. The Spanish economic situation also remains extremely serious.  EUR/USD retreats back to the 1.2965 region before finding some support. 09-05-12:  07.45 GMT

MARKET UPDATE  - The Euro opens sharply lower in Asian trading on Monday as Hollande's victory in France and potential Greek chaos following parliamentary elections puts fresh downward pressure on the currency. EUR/USD retreats to just above the pivotal 1.30 level. 06-05-12:  21.00 GMT

MARKET UPDATE  - The Euro resists a further decline on Thursday as the ECB seeks to maintain the illusion of recovery while political constraints forced the bank to talk of optimism surrounding the outlook. No-one really buying this line and Euro retreats again on Friday. 04-05-12:  10.30 GMT

MARKET UPDATE  - Euro comes under heavy selling pressure following a dismal set of PMI readings out of the Euro-zone with a particularly sharp decline for Italy.  US dollar also still gaining some support from the US data as the disparity between the US and Euro area widens very sharply for April. 02-05-12:  09.30 GMT

MARKET UPDATE  - Potential safe-haven currencies in trouble over the past 24 hours. Canada reports a surprise GDP decline for March, The REserve Bank of Australia cuts interest rates by 0.50% and the UK PMI manufacturing index dips to a four-month low. 01-05-12:  08.30 GMT

MARKET UPDATE  - Principal attention was on Sterling during much of the European session with the Fed taking centre-stage later. Significantly, the dollar was unable to gain any sustained support against Sterling despite a confirmed recession for the UK economy.  25-04-12:  21.20 GMT

MARKET UPDATE  - The Euro again found solid buying support during Tuesday and pushed back to challenge the 1.32 area against the dollar as risk appetite also attempted a fragile recovery with European equity markets bouncing higher. Risk appetite boosted after the New York close by stronger than expected Apple results.  24-04-12:  21.20 GMT

MARKET UPDATE  - The Euro was subjected to selling pressure during the European session as political and economic fears intensified. There was sold support at lower levels as the dollar failed to sustain its best levels. Sterling maintained its safe-haven role.  23-04-12:  20.35 GMT

MARKET UPDATE  - The Euro has again found buying support on dips and pushed to highs above the 1.32 level against the dollar on Friday. Sterling continues to out-perform following a stronger than expected retail sales outcome.  20-04-12:  16.00 GMT

MARKET UPDATE  - The Euro found support close to 1.30 against the dollar and rallied back to above 1.31 with reports that the IMF was buying Euros as part of its European loan-facility operations. Spanish bond yields also decline from their peak, but markets remain nervous.  17-04-12:  08.00 GMT

MARKET UPDATE  - The Euro failed to gain any significant relief following the Chinese move to widen the yuan trading band and risk appetite was generally fragile as regional equity markets were generally weaker. EUR/USD has weakened to lows near 1.30 ahead of the European open.  16-04-12:  06.00 GMT

MARKET UPDATE  - Peripheral bond-market concerns were never far from the surface during Thursday, but the Euro found good support at lower levels and buyers had some success in triggering stop-loss buying which propelled EUR/USD to highs just above 1.32 as the US currency was generally lacklustre.  12-04-12:  21.30 GMT

MARKET UPDATE  - The Euro has been undermined by renewed stresses surrounding Spain and Italy, but the currency has still proved to be broadly resilient with the dollar finding it difficult to make headway against European currencies as Fed policy uncertainties continue to swirl around markets.  11-04-12:  07.40 GMT

MARKET UPDATE  - The Euro found it difficult to gain sustained support from a weaker than expected US payroll report as the currency was undermined by a further doubts surrounding the Euro-zone peripheral economic situation. EUR/USD retreated back to below the 1.31 level in early Europe on Tuesday.  10-04-12:  07.40 GMT

MARKET UPDATE  - The Euro remained generally on the defensive as peripheral yields continued to move higher. The main action was on the Swiss franc as the Euro briefly dipped below the 1.20 minimum level even though the National Bank was aggressively defending the limit.  05-04-12:  21.20 GMT

MARKET UPDATE  - The US dollar gained a significant boost following the FOMC minutes with no fresh dovish language used and no promise of further quantitative easing, although the general tone was still relatively dovish with no move towards any form of tightening.  03-04-12:  21.00 GMT

MARKET UPDATE  - The US dollar will be generally on the defensive at the start of Asian trading on Monday with the much stronger than expected Chinese PMI data boosting market sentiment.  The Shanghai market will not get an opportunity to share the excitement with Chinese markets closed for a holiday.  01-04-12:  22.00 GMT

MARKET UPDATE  - The Euro has again been unable to maintain a position above 1.3350 against the US dollar and dipped back to test support in the 1.3270-80 region. Quarter-end flows will have a potentially important impact.  29-03-12:  10.50 GMT

MARKET UPDATE  - The US dollar was subjected to renewed selling pressure on Monday following dovish remarks from Fed Chairman Bernanke as he expressed fears surrounding the labour market.  Sterling pushed towards 1.60 against the dollar, but the Australian dollar failed to hold gains.  27-03-12:  08.50 GMT

MARKET UPDATE  - The US dollar has been unable to take advantage of vulnerability elsewhere as the European currencies continue to fight back late in the week. The Australian dollar also regained ground after a mid-week pummelling and AUD trends will be a vital early component for the week.   25-03-12:  21.30 GMT

MARKET UPDATE  - The Australian dollar has tended to dominate over the past 24 hours with the currency hitting fresh two-month lows following a weaker than expected Chinese PMI report. Euro rallies limited, but downside resistance proving very stubborn.   22-03-12:  08.00 GMT

MARKET UPDATE  - The main feature over the past 24 hours has been choppy trading conditions with an absence of longer-term funds allowing shorter-term players to target stop losses. The US economic tone has remained generally upbeat with a further increase in US Treasury yields. Doubts over the Chinese economy have continued to increase.  20-03-12:  21.35 GMT

MARKET UPDATE  - The dollar was unable to break any resistance levels on Friday and dipped sharply during the US session as the currency was subjected to a important bout of profit taking. The Euro rallied back towards the 1.32 area against the dollar as disappointing production and consumer confidence data curbed yield support.  18-03-12:  20.30 GMT

MARKET UPDATE  - The dollar made further gains on Wednesday, but there has been pressure for a correction on Thursday. Yield trends pushed the US currency to highs above 84.15 before a correction back to 83.70 as the dollar needed to correct over-bought conditions.  14-03-12:  07.20 GMT

MARKET UPDATE  - The Euro was unable to sustain initial gains following the German ZEW survey as the dollar regained ground and the US currency gained additional traction from a slightly more optimistic Federal Reserve tone at the latest meeting. The US currency pushed to 11-month highs above 83 against the Japanese currency 14-03-12:  07.20 GMT

MARKET UPDATE  - There was a palpable sense of fatigue in markets on Monday and also a sense of the market feeling slightly lost without the immediacy of a Greek crisis to focus on. The dollar was unable to build on gains against the Euro, but did have a firmer tone against the commodity currencies.  12-03-12:  21.20 GMT

MARKET UPDATE  - The dollar gained fresh support following the stronger than expected US payroll report with notable gains to a 10-month high above 82.50 against the yen. An easing of Greek dominance, at least for now, will increase the focus on interest-rate differentials 11-03-12:  18.00 GMT

MARKET UPDATE  - The main theme has been a deterioration in risk appetite during the European session on Tuesday which has continued in New York.  Confidence in the growth outlook has wilted and Euro-zone fears are never far from the surface. The yen has gained fresh support with USD/JPY back to below the 81 level. 06-03-12:  16.20 GMT

MARKET UPDATE  - The Euro remains generally on the defensive, but there has been some buying support at lower levels as the dollar still finds it difficult to take full advantage of any retreat in global currencies as aggressive central bank action is still providing some support to risk conditions. 05-03-12:  08.40 GMT

MARKET UPDATE  - The ECB LTRO amount was close to expectations at EUR530bn, but the fact that 800 banks tapped cash is remarkable. The net liquidity injection will continue to support near-term risk appetite and commodity currencies remain strong.  29-02-12:  13.10 GMT

MARKET UPDATE  - The dollar has found it difficult to gain sustained support with risk appetite underpinned by the very expansionary monetary policy pursued by the global central banks amid expectations that demand for funds at the latest LTRO auction will remain high and provide further support to the Euro-zone peripheral bond market.  28-02-12:  08.55 GMT

MARKET UPDATE  - EUR/USD falls from peak near 1.3480 as risk appetite more fragile amid some nerves ahead of Germany's parliamentary vote on the Greece loan deal. Yen also regains some support on risk considerations as the Japanese currency regains support on the crosses.  27-02-12:  09.40 GMT

MARKET UPDATE  - EUR/USD pushed to a high near 1.33 following the Eurogroup decision to approve the second Greek loan package. Currency unable to sustain the gains given the underlying negative implications for the Euro area and very little chance of Greek measures being implemented. 21-02-12:  13.10 GMT

MARKET UPDATE  - EUR/USD found support below 1.30 and rallied back to above 1.31 on renewed hope that a Greek deal would be stitched together by Monday. Risk appetite also rallied after the ECB Greek bond swap, although the logic seems flawed.  Domestic political tensions remain very high and relations with Germany at a low ebb.  The political risk premium must stay extremely high.  17-02-12:  08.20 GMT

MARKET UPDATE  - Markets have been unable to trigger a breakout from recent ranges as the Euro found support below 1.31, especially after ledges of support from the Chinese central bank.  Greece remains in the spotlight as pressure for a change in policies continues to grow.  15-02-12:  07.15 GMT

MARKET UPDATE  - The Euro failed to break above 1.33 on Monday and dipped steadily lower with further selling pressure in US trading following Moody's downgrade of Spain and Italy.  UK also put on negative watch which undermines Sterling support to some extent.  14-02-12:  07.40 GMT

MARKET UPDATE  - The Euro is still proving resilient given that there has still been no final agreement on Greece despite reported progress. Chinese inflation data also much stronger than expected which will dampen talk of any near-term monetary easing. European interest rate decisions are due later.  09-02-12:  03.20 GMT

MARKET UPDATE  - The Australian dollar has been the main focus on Tuesday as the currency spikes higher following the Reserve Bank decision not to cut interest rates at today's meeting.  China conditions likely to be an increasing focus of concern as equities sliding again while growth fears are intensifying.  07-02-12:  06.55 GMT

MARKET UPDATE  - The Euro is still being sold on rallies as it dips back to below 1.31 in Asia on Monday as Greek political parties are still short of an agreement. Overall risk appetite still holding relatively firm following Friday's US payroll data, but AUD/USD is well off Friday's highs.  06-02-12:  04.55 GMT

MARKET UPDATE  - The move back towards 1.32 for EUR/USD is not about Euro strength, it is a function of dollar weakness as global defensive demand for the US currency dips. Sterling has pushed to five-month highs against the dollar while commodity currencies are also performing strongly.  02-02-12:  04.55 GMT

MARKET UPDATE  - The Euro retreated back to below 1.31 against the dollar on Monday as risk appetite faded, but there was renewed support for the currency on Tuesday as the dollar was unable to sustain buying support. EUR/USD back near 1.32 in Asian trading as shorts faced another test of nerve.  31-01-12:  04.55 GMT

MARKET UPDATE  - The Euro pushed to highs above 1.31 following the dovish Fed statement and extended gains in Europe on Thursday following reports that a Greek debt restructuring deal could be close.  26-01-12:  11.50 GMT

MARKET UPDATE  - Battle continues to rage around the 1.30 area in EUR/USD with firm buying support on dips. Overall risk appetite remains firm on reduced fears of a systemic crisis in the banking sector as the powerful liquidity operations work their short-term magic on market sentiment.  25-01-12:  03.20 GMT

MARKET UPDATE  - The Euro peaked near 1.3050 against the dollar before retreating again as there was a Euro-group rejection of Greek PSI terms. There has also been profit taking in risk currencies, although sentiment should remain relatively firm for now.  24-01-12:  02.55 GMT

MARKET UPDATE  - Risk appetite remains firmer and the Euro has continued to gain short-covering support from successful European bond auctions. The calmer conditions may not survive much longer given underlying stresses within the banking sector.  20-01-12:  06.35 GMT

MARKET UPDATE  - A measure of calm has retuned following Friday's high volatility triggered by the long-awaited Standard & Poor's downgrading of France. Risk appetite has been underpinned by slightly better than expected Chinese GDP data and the Euro has been lifted back to above 1.27 against the dollar by a covering of short positions. 17-01-12:  03.15 GMT

MARKET UPDATE  - The Euro was unable to sustain gains on Wednesday and dipped sharply after Fitch's warning that the ECB needs to do much more to prevent a cataclysmic Euro collapse.  EUR/USD dips to lows near 1.2660 before finding some tentative support. 12-01-12:  03.05 GMT

DATA ALERT - Overnight deposits at the ECB increase to a record EUR481.9bn. This is a huge figure and again illustrates a complete lack of confidence in the European bank. Lending levels are liable to remain under sustained pressure  10-01-12 :  08.50 GMT

MARKET UPDATE  - The US payroll data was stronger than expected with a 200,000 gain and unemployment at 8.5%. Generally a solid release as private-sector jobs, especially in transport were able to offset a further fall in government jobs.  Generally positive for the dollar which moves to 1.27 against the Euro. 06-01-12:  15.35 GMT

MARKET UPDATE  - The Euro has remained under pressure and retreated again in the Asian session on Friday with lows below 1.2770 for fresh 16-month lows.  Euro finding it hard to gain support even when risk appetite improves.  06-01-12:  06.10 GMT

MARKET UPDATE  - The Euro is subjected to renewed pressure with a sharp retreat back to near 1.29 while Sterling hits a 12-month high against the Euro. Euro-zone fears increase again as the scale of problems within the banking sector renews the fear factor.  04-01-12:  15.45 GMT

MARKET UPDATE  - Risk conditions remain more favourable at the start of the first full trading day of 2012 with firm Chinese data helping to boost spirits. AUD/USD gains ground and Euro also firmer, but deposits as the ECB increase back to near-record levels which is not a good sign.  03-01-12:  08.20 GMT

MARKET UPDATE  - EUR/USD continues to find support below 1.29 on the last trading day of 2011.  last-minute window dressing and repatriation flows will tend to dominate on Friday as liquidity levels remain extremely low.  30-12-11 :  02.40 GMT

MARKET UPDATE  - Market suddenly explodes into life with aggressive Euro and Sterling selling against the dollar. Big banks looking to trigger stop losses in thin trading have succeeded extremely well as initial move was provoked by a bigger than expected ECB balance sheet which suggested quantitative easing.  28-12-11 :  14.50 GMT

DATA ALERT - Overnight deposits at the ECB increase to a record EUR411.8bn. Partly due to year-end factors, but hardly a vote of confidence by the banks.  27-12-11 :  08.50 GMT

MARKET UPDATE - At the moment, the market is grinding towards halt ahead of the Christmas break with the Euro finding solid support on any dips towards 1.30 against the dollar. Risk conditions are solid with the Australian dollar retaining gains.  23-12-11 :  04.50 GMT

MARKET UPDATE - The Euro spiked higher to near 1.32 against the dollar on Wednesday before an equally sharp decline to the 1.3020 area as the US currency also regained lost ground. China will be an important focus given the possibility of more reserve ration requirement cuts in the short term.  22-12-11 :  03.30 GMT

MARKET UPDATE - The Euro has continued to fluctuate around the 1.30 level. There has been further solid EUR/USD buying support below 1.30 with markets reluctant to sell aggressively given the number of existing short speculative positions in the market.  20-12-11 :  07.00 GMT

MARKET UPDATE - The Euro has continued to fluctuate around the 1.30 level as pressure for consolidation after a sharp slide is offset by underlying fears surrounding the Euro-zone outlook as political tensions continue.  EUR/USD close to the 1.3025 level.  16-12-11 :  07.15 GMT

MARKET UPDATE - French ratings rumours have been doing the rounds again as players try to trigger more stop losses below the 1.30 EUR/USD level. Commodities generally under pressure as de-leveraging continues with little in the way of solid data.   14-12-11 :  15.15 GMT

MARKET UPDATE - The Euro remains vulnerable following another sharp sell-off in New York on Tuesday. The 1.30 level against the dollar will remain a short-term focus, especially with reports of strong option defence in this area. ECB data will be watched closely at the European open.  14-12-11 :  07.00 GMT

MARKET UPDATE - There has been a slight improvement in risk appetite with Wall Street opening higher, but the Euro is finding it very hard to participate and at the moment is still trapped below 1.32 against the dollar which suggests that a lack of yield support is weighing on the currency  13-12-11 :  15.20 GMT

MARKET ALERT - The Shanghai equity market weakens by close to 2% on Tuesday and dips to a 33-month low which helps maintain a negative underlying tone towards risk appetite ahead of the European open. latest ECB borrowing data will be watched closely to see if bank stresses are continuing to increase.  13-12-11 :  07.35 GMT

MARKET UPDATE - The Euro is drifting slightly weaker ahead of the European open on Monday, although ranges remain very narrow. There has been further speculation that Standard & Poor's will announce a downgrading of Euro-zone ratings.  12-12-11 :  06.40 GMT

MARKET UPDATE - The Euro failed to hold initial gains following the ECB interest rate decision and was subjected to heavy selling pressure as Bank president Draghi ruled out ECB financing of government debt. EUR/USD dipped to lows below 1.33 and a recovery quickly ran into trouble in Asia on Friday.  09-12-11 :  03.50 GMT

MARKET UPDATE - US dollar drifts weaker in early Europe on Wednesday. Markets looking for more progress at the EU Summit and are pricing in a slightly more optimistic stance which is lessening any defensive dollar demand, but ranges are narrow.  07-12-11 :  07.20 GMT

MARKET UPDATE - The S&P warnings over European sovereign-debt downgrades put the Euro back on the defensive following the Merkel-Sarkozy mini-summit. Markets also staying very cautious over the banking sector and rumours of failure will continue to swirl around markets.  06-12-11 :  08.20 GMT

MARKET UPDATE - The Euro gained some support on improved risk appetite following the US unemployment decline, but it was unable to hold above 1.35 against the dollar and weakened again in late European trading on rumours of another Spanish sovereign-debt downgrade.  05-12-11 :  03.20 GMT

MARKET UPDATE - The Euro has been unable to hold its best levels as ECB head Draghi gives a sobering assessment of the situation to the European parliament and downplays the possibility of more aggressive ECB action. EUR/USD back to below 1.3450.   01-12-11 :  08.50 GMT

MARKET UPDATE - There has been a big turn-around in the market as central banks, led by the Federal Reserve act to boost market liquidity by effectively capping rates and easing funding stresses by increasing the availability of dollars. Risk appetite surges with strong gains on equity markets and there are sharp gains for the Euro and commodity currencies, especially after stronger than expected ADP employment data from the US.   30-11-11 :  15.35 GMT

MARKET UPDATE - There has been further choppy trading with EUR/USD unable to sustain the move to above 1.34 on Tuesday.  If the ECB is forced into any form of quantitative easing then the Euro-zone outlook may be safer, but there would still be the risk of heavy selling in the Euro.   30-11-11 :  08.20 GMT

MARKET UPDATE - The Euro has maintained a stronger tone and risk appetite also improves on the back of advancing stock markets. So far, EUR/USD has not been able to push above the 1.34 level as the pattern of rumours and denials continue.  28-11-11 :  15.05 GMT

MARKET UPDATE - The Euro and risk appetite receive an important boost with speculation that the IMF will announce a EUR600bn support package for Italy and Spain. EUR/USD hits a high around 1.3340 before retreating back to the 1.33 area as the reports are denied by the IMF.  28-11-11 :  03.55 GMT

MARKET UPDATE - German Chancellor Merkel's hard-line stance on the possibility of Eurobonds has further increase fears surrounding the Euro-zone economy and Euro.  EUR/USD dips to lows near 1.33 as Asian equity markets continue to decline. Very difficult to secure any near-term relief.  25-11-11 :  05.50 GMT

MARKET UPDATE - Euro reached the 1.34 area following the German IFO index, but could not extend the recovery and has retreated back to below 1.3350 as German Chancellor Merkel holds firm against Eurobonds, contrary to some media report. Market may die during US trading due to Thanksgiving, but don't take it for granted.  24-11-11 :  13.50 GMT

MARKET UPDATE - Euro dipped to lows of 1.3320 as risk appetite deteriorated again following a very weak German bond auction. There has been a tentative rebound to the 1.3380 area with players reluctant to extend short positions ahead of the Thanksgiving Holiday.  24-11-11 :  02.50 GMT

MARKET UPDATE - Mixed Euro-zone PMI readings with weak manufacturing data, but a recovery in services. Financial sector likely to dominate and some very tentative evidence that stresses are easing slightly in Europe, but confidence will remain fragile at best given the threat of a major banking-sector collapse.  23-11-11 :  08.55 GMT

DATA ALERT - The flash China HSBC manufacturing PMI index falls to 48.0 for November from 51.0 which will further undermine international risk appetite.  23-11-11 :  02.40 GMT

MARKET UPDATE - The Euro unable to hold above 1.3550 against the dollar and retreats to test support below 1.35 following worse than expected US GDP data which triggers a fresh bout of risk aversion.  Difficult to break out of prevailing ranges at this time, but Wednesday's Euro-zone data will be important.  22-11-11 :  16.20 GMT

MARKET UPDATE - The Euro benefits from another round of short covering and moves towards the 1.3550 area against the dollar. There's a pause in equity market selling on relief that the US credit rating has not been downgraded again as fiscal policy heads for deadlock again.  22-11-11 :  08.35 GMT

MARKET UPDATE - Stronger than expected US new home sales data helps recue risk appetite and the Euro, especially as the amount of ECB bond purchases last week was held to just above EUR8bn with the market braced for a much bigger figure. Underlying sentiment still very fragile.  21-11-11 :  15.35 GMT