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May 6, 2013

Europe Retail Sales Fall in March

Filed under: OANDA News — Tags: , , , , , , , , , , , , — admin @ 1:57 pm

Euro-area services and manufacturing output shrank for a 15th straight month in April and retail sales fell in March as the 17-nation economy struggled to emerge from recession.
A composite index based on a survey of purchasing managers in the manufacturing and services industries increased to 46.9 last month from 46.5 in March, London-based Markit Economics said in a report today. While above an initial estimate of 46.5 published on April 23, it was still below 50, indicating contraction. Retail sales declined for a second month in March, another report showed.

The euro-area economy will shrink more than previously estimated in 2013 as part of a two-year slump that has pushed unemployment to a record high, the European Commission said on May 3. The European Central Bank last week reduced its key interest rate to an all-time low after confidence was shaken by political turmoil in Italy and a bailout of Cyprus.

via Bloomberg

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This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.

December 14, 2012

EZ Manufacturing, Services Contract Less Than Expected

Filed under: OANDA News — Tags: , , , , , , , , , , , — admin @ 3:22 am

Euro-area services and manufacturing output contracted at a slower pace than economists forecast in December as European leaders devise the latest plan to combat the sovereign-debt crisis, now entering its fourth year.

A composite index based on a survey of purchasing managers in both industries rose to 47.3 to from 46.5 in November, London-based Markit Economics said today. Economists had forecast a November reading of 46.9, according to the median of 16 estimates a Bloomberg News survey. A reading below 50 indicates contraction. A separate report showed European car sales fell 10 percent in November, bringing European Union registrations so far this year to a 19-year low.

Record euro-area unemployment of 11.7 percent and concern about the debt crisis is hampering consumer spending. Finance ministers yesterday declared a two-front victory over the fiscal turmoil, assuring a lifeline to Greece and laying the groundwork for a bank supervisor to prevent further crises. Government leaders early this morning pledged to seek a joint strategy for handling failing banks as the next step toward banking union. Still, the European Central Bank said in its monthly bulletin that the economic slump will extend into next year.

“I’m very concerned in the euro zone,” where “domestic credit data are contracting very, very sharply,” Julian Callow, chief international economist at Barclays Plc, said in a Bloomberg Television interview yesterday. “Unemployment is surging, there are a lot of issues. The southern European badly needs a lot more stimulus.”

Bloomberg

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This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.

October 12, 2012

Spain Has Plan Might Involve Bailout Request

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Spanish Finance Minister Luis de Guindos who last friday made the crowd laugh with his claim that “Spain doesn’t need a bailout at all” was one of the centers of attention at the IMF and World Bank meetings in Tokyo.

This time around, Mr de Guindos did not go for a crowd pleaser and instead tried to reassured the participants that the ECB bond-buying plan is real. Not virtual. Real. Available now. Spain sees no political resistance from within the EU (it is rumoured Germany is making them wait). But when asked point blank when or if Spain will ask for the bailout he declined to answer. A lesson learned from his experience at the London School of Economics last week no doubt.

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Rift Growing between IMF and rest of Troika

Filed under: OANDA News — Tags: , , , , , , — admin @ 8:14 am

The International Monetary Fund is starting to break away ideologically from the rest on the troika on the topic of Greece. The IMF is supporting an extension to the agreement and debt write downs. Those two are vehemently opposed by the EC and the ECB. Germany in particular as the largest contributor to the current rescue package would be the most directly hit by the haircut.

The chief of the IMF makes a lot of sense in what she sees is the way to get Greece out of the crisis that has pushed debt above 130% of the country’s GDP. Everyone else in Europe, the sole exception being the head of the Bundesbank Weidmann, have used rhetoric and pain avoidance rescue packages to boost the troubled Greek economy.

The IMF has a track record for making hard choices both for the countries in trouble as for the debt holders. Recently I wrote about the IMF losing its stick and now based on the latest round of statements they might even be losing allies. The biggest difference is that while in the past the IMF has had mixed results with individual countries this would be a first where it is trying to work with an economic union. A Union that has a diverse make up… some of the members might have a bigger stick than the IMF.

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UK Constructions Falls in Q3

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UK construction output slumped in the last three months, as the government reduced its spending on house-building, infrastructure and other building projects.

Data from the Office for National Statistics showed a 0.9% drop in construction in August from the previous month, which led to a 12% drop in the third quarter compared with the same period last year.

Economists said construction is likely to drag on GDP in the third quarter. Chris Williamson of Markit said official figures will probably show the economy grew by 0.6% in the third quarter, but says that flatters performance because of the rebound from lost working days in second quarter. He forecasts that the economy actually grew by just 0.1%.

via Guardian

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October 11, 2012

Spain Downgraded and Still no Bailout Request

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As I wrote last week on the Spanish Bailout, there are no clear reasons on why the government is waiting to submit the bailout request. The speculation is heavy on Germany asking for the request to be held and there is also the argument that it could be based on denial of the size of the crisis by the Spanish government. The Finance Minister talk at the London School of Economics is the perfect example as the crowd laughed as he stated that Spain does not need a bailout.

Bill Gross seems to agree that the statement is ludicrous and adds some advice via twitter:

Gross: He who hesitates is lost. Pride goeth before a fall. #Spain should swallow its pride and ask for help now!

— PIMCO (@PIMCO) October 11, 2012

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October 5, 2012

Spanish Minister tells Crowd Spain doesn’t need a bailout

Filed under: OANDA News — Tags: , , , , , , , , , , , , , , — admin @ 7:57 am

The response from the crowd gathered at the London School of Economics was the most logical to that statement. They laughed.

Luis de Guindos took to the stage at the London School of Economics (LSE) and became an unexpected comic figure on Thursday evening.

“Spain doesn’t need a bailout at all,” de Guindos said, straight faced and somber, as mirth spread throughout the audience — even de Guindos’ assistant interpreter couldn’t mask a smile.

Not to be perturbed by the disbelieving audience, whose giggles audibly spread throughout the room, de Guindos said that Madrid’s reform program was sufficient to stave off a full sovereign bailout and that the European Central Bank’s (ECB) bond-buying program would suffice to help Spain recover.

“What we have is a proposal from the European Central Bank to trigger intervention in the secondary market with certain conditions,” he said. “They have demanded that in order to intervene … they want certain conditionality.”

De Guindos, speaking in broken but clear English, said that Spain supported the ECB’s bond-buying scheme and that there was a distinction between Spain seeking a full bailout that would be overseen by the troika (the ECB, the European Commission and the International Monetary Fund) and accepting the enhanced credit line that the ECB is offering through bond buying, called the Outright Monetary Transactions.

De Guindos stated that as well as the ECB’s actions it was important that “the commitment of European institutions for the future of the euro” was demonstrated in the form of a commitment to fiscal union.

via CNBC

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August 23, 2012

Markit Releases US PMI

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The Markit Flash U.S. Manufacturing Purchasing Managers’ IndexTM (PMITM)1 continued to signal only a modest improvement in U.S. manufacturing business conditions in August. The preliminary ‘flash’ PMI reading which is based on around 85% of usual monthly replies rose slightly from 51.4 in July to 51.9 and was the third-lowest since the manufacturing recovery was first indicated by the headline index in October 2009.

This morning Markit Economics released their US PMI Index. They outlined the following key points:

  • Slight rise in the headline PMI index, but third- lowest reading in 35 months
  • Growth of output and new orders remain modest
  • Employment increases at slowest pace since December 2010
  • Marginal falls in input and output prices

Download the PDF from Markit Economics

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May 2, 2012

Euro Zone Unemployment at Its Highest Since 1997

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Euro zone unemployment rose to the highest in almost 15 years and manufacturing contracted for a ninth month.

According to the European Union’s statistics office, the unemployment rate in the 17-nation area sharing the euro increased to 10.9 percent in March from 10.8 percent in February. This is the highest level since 1997. The number of people out of work in the region reached a record high of 17.4 million in March.

Markit Economics reported that the manufacturing gauge in the region fell to 45.9 in April from 47.7 in March, indicating further that the euro zone economy continues to weaken.

A recent survey of economists showed that the European Central Bank is likely to keep its benchmark interest rate at 1 percent, in order to stimulate growth in the region.

In the 27-nation European Union, the unemployment rate was 10.2 percent in March, unchanged from the previous month and up from 9.4 percent in March last year.

Spain had the region’s highest unemployment rate in March, at 24.4 percent, Greece came in second with 21.7 percent. The lowest jobless rates were in Austria and the Netherlands, at 4 percent and 5 percent, respectively.

Source: Bloomberg

November 29, 2011

U.S. Home Prices Drop 3.6% in September

Filed under: OANDA News — Tags: , , , , , , , , , — admin @ 7:19 am

The S&P/Case-Shiller index of property values indicated a decline of 3.6 percent in September compared to the same month one year ago. The continued drop in the index which measure property values in 20 cities, suggests that many homeowners find themselves holding mortgages worth more than the current value of their homes.

With unemployment continuing to hold at about 9 percent and a growing inventory of distressed properties, the outlook for the housing sector remains weak.

“Housing probably won’t go anywhere for the next couple of years,” Ken Mayland, president of ClearView Economics LLC in Pepper Pike, Ohio, said before the report. “We’re just mired in this swamp with a huge overhang of distressed properties that prevents the market from gaining any traction.”

Source: Bloomberg

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