Market Review - 28/05/2015 22:49GMT
Euro swings wildly on concern over Greece
Euro swung wildly again on Thursday on concerns over Greek debt. Despite brief rise to 1.0951 in Europe, the pair retreated to 1.0881 and then rebounded to 1.0929 after higher-than-expected US jobless claims but only to fall again to 1.0867 in New York morning. Euro later rose to a fresh session high at 1.0958 near New York close.
The EU's Economic Commissioner Pierre Moscovici said a deal between Greece and its international creditors is possible, but it is still far away and work needs to continue day and night to reach it as Greece is running out of time and money.
Euro zone governments, however, want Greece to implement a pension reform, raise the Value Added Tax, liberalise the labour market, sell more state assets, reform the administration, create an independent fiscal authority and deal with non-performing loans before they lend Athens more. Greece said it was hoping for a deal by Sunday, but Moscovici was more cautious.
The greenback maintained a firm undertone on Thursday. U.S. dollar found renewed buying at 123.50 n rose to 124.29 and then a fresh 12-year peak of 124.46 b4 retreating strongly to 123.62 in NY after the yen comments from Japanese finance minister Taro Aso who said a weakening of Japan's yen currency in recent days had been "rough" and he would monitor moves in the foreign exchange markets carefully. U.S. dollar later climbed back to 124.11 near New York close.
Fed's Kocherlakota said raising interest rates this year not consistent with fed mandates; U.S. economy may well have contracted in Q1; 2014 gains in U.S. jobs market show recession did not do permanent damage; need three more years of 2014-like job gains to reach full employment; Fed should aim to boost labor market back to late-2006 strength; don't expect inflation to return to 2 pct until 2018.
Fed's Bullard releases paper on what optimal policy would be with interest rates at zero; makes case for nominal GDP targeting. Bullard paper finds low rate vows 'not helpful' when interest rates are at zero, unclear whether quantitative easing can help smooth credit markets, boost growth; promising temporarily higher inflation is best way to stimulate economy.
Despite staging a brief bounce to 1.5386 in European morning on Thursday, the British pound tumbled after the release of weaker-than-expected UK GDP data and cable weakened to as low as 1.5260 in NY morning before rebounding to 1.5327 near NY close on short-covering.
British finance minister George Osborne said other European Union countries were willing to negotiate over Britain's push to reform the bloc before it holds a referendum on whether to stay in the EU. France wants Britain to remain in the European Union, President Francois Hollande said on Thursday after talks with UK Prime Minister David Cameron, who insisted the status quo in Europe was "not good enough".
Friday will see the release of New Zealand's building consents, U.K. GfK consumer confidence, Japan's CPI, household spending, unemployment rate, industrial production and IP forecast, Australia's HIA new home sales, Japan's construction orders, housing starts, Swiss GDP and KOF indicators, Canada's GDP and U.S. Chicago PMI.
Euro swings wildly on concern over Greece
Euro swung wildly again on Thursday on concerns over Greek debt. Despite brief rise to 1.0951 in Europe, the pair retreated to 1.0881 and then rebounded to 1.0929 after higher-than-expected US jobless claims but only to fall again to 1.0867 in New York morning. Euro later rose to a fresh session high at 1.0958 near New York close.
The EU's Economic Commissioner Pierre Moscovici said a deal between Greece and its international creditors is possible, but it is still far away and work needs to continue day and night to reach it as Greece is running out of time and money.
Euro zone governments, however, want Greece to implement a pension reform, raise the Value Added Tax, liberalise the labour market, sell more state assets, reform the administration, create an independent fiscal authority and deal with non-performing loans before they lend Athens more. Greece said it was hoping for a deal by Sunday, but Moscovici was more cautious.
The greenback maintained a firm undertone on Thursday. U.S. dollar found renewed buying at 123.50 n rose to 124.29 and then a fresh 12-year peak of 124.46 b4 retreating strongly to 123.62 in NY after the yen comments from Japanese finance minister Taro Aso who said a weakening of Japan's yen currency in recent days had been "rough" and he would monitor moves in the foreign exchange markets carefully. U.S. dollar later climbed back to 124.11 near New York close.
Fed's Kocherlakota said raising interest rates this year not consistent with fed mandates; U.S. economy may well have contracted in Q1; 2014 gains in U.S. jobs market show recession did not do permanent damage; need three more years of 2014-like job gains to reach full employment; Fed should aim to boost labor market back to late-2006 strength; don't expect inflation to return to 2 pct until 2018.
Fed's Bullard releases paper on what optimal policy would be with interest rates at zero; makes case for nominal GDP targeting. Bullard paper finds low rate vows 'not helpful' when interest rates are at zero, unclear whether quantitative easing can help smooth credit markets, boost growth; promising temporarily higher inflation is best way to stimulate economy.
Despite staging a brief bounce to 1.5386 in European morning on Thursday, the British pound tumbled after the release of weaker-than-expected UK GDP data and cable weakened to as low as 1.5260 in NY morning before rebounding to 1.5327 near NY close on short-covering.
British finance minister George Osborne said other European Union countries were willing to negotiate over Britain's push to reform the bloc before it holds a referendum on whether to stay in the EU. France wants Britain to remain in the European Union, President Francois Hollande said on Thursday after talks with UK Prime Minister David Cameron, who insisted the status quo in Europe was "not good enough".
Friday will see the release of New Zealand's building consents, U.K. GfK consumer confidence, Japan's CPI, household spending, unemployment rate, industrial production and IP forecast, Australia's HIA new home sales, Japan's construction orders, housing starts, Swiss GDP and KOF indicators, Canada's GDP and U.S. Chicago PMI.
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