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Euro Drops As ECB Allots 3-Year Loans

The pound is higher against the dollar and the euro this morning after Bank of England  published its money and credit data for January. BoE report showed that lenders granted 58,728 loans to buy homes, compared with 55,019  the previous month, beating the predictions of a 54,000 mortgages approved. This is the highest reading in more than two years as first time buyers rushed to take advantage of a property-tax exemption before it ends next month. BoE Governor Marvyn King with several MPC members will appear before the Treasury Committee today, and they will present its annual report on economic outlook. Overnight, report showed that UK consumer confidence held unchanged at the highest level since June as slowing inflation eased pressure on the consumers. An index of sentiment remained at minus 29 from January, while the measure of Britons’ outlook for the economy rose by 4 points to minus 29.

The euro dropped against its major rivals after the European Central Bank allotted 529.5 billion euro in its second tranche of three year loans to the region’s banks. European banks were forecasted to borrow 470 billion euro in three year loans, after borrowing 489 billion in the first longer term refinancing operation in December. Separately, German unemployment remained unchanged at 6.8% in February, adding to the signs the Europe’s largest economy is gaining momentum after contracting 0.2% in fourth quarter. Expect for the single currency to remain volatile as ECB allotted more funds than projected to its regional banks.

 

 

Pound Up Versus Dollar Before CBI Report

The pound is mixed this morning, consolidating against the broadly stronger euro, but gaining against the dollar ahead of the industry report that is projected to show retail sales improved in February. The CBI publishes its distributive sales survey today, with the expectations for the total sales balance to rise to –12  from –22 in January. Separately, Bank of England Deputy Governor Paul Tucker will be speaking in London today at the Society of Business Economists Annual Dinner.   

The euro is higher across the board before European Central Bank allot a second round of three-year funds tomorrow to boost liquidity of the region’s banks. The single currency appreciated against its major rivals on speculation that cash injection from the ECB will spur demand for higher yielding assets. Looking ahead to today  German Consumer Confidence and CPI reports headline the economic calendar, with expectations for the inflation numbers to remain flat at 2.1% in February. 

The dollar consolidated across the board during the Asian session on expectation US Consumer Confidence rebounded in February. The gauge is projected to climb to 63.0 from 61.1 in January, as stronger labour market figures bolstered the consumers appetite. Also scheduled for today are the Durable Goods Orders, which probably declined to –1.0%  in January for the first time in four months. Expect for the greenback to remain in current levels against its major rivals, on increased demand for higher yielding assets before US releases its economic data today.

 

 

Euro Gains Ahead Of EU Summit This Week

The pound remained under pressure against the euro after BoE’s dovish minutes release from last Wednesday, showed that two policymakers voted for a larger increase in asset purchases than agreed at February meeting. David Miles and Adam Posen voted to add 75 billion pounds to the asset purchase program because the economy is in a “precarious situation”. Overnight, Hometrack Ltd said that the average cost of a home in UK was unchanged from January and 1.4% lower than a year earlier. The company said that home values declined in six out of the 10 regions, while London posted a small increase. There are no data releases or policy speeches scheduled for today. Looking to the week ahead, PMI manufacturing survey on Thursday headline the economic calendar, with the expectations for the February figures to edge slightly lower to 52.0 from 52.1 in January. PMI Construction is also scheduled for Thursday, with projection for the figures to remain stabile at 51.4. Finally, Gfk consumer confidence index is scheduled for Wednesday, and the market consensus is calling for a slight improvement in February figures. 

The euro is higher against most of its major rivals this morning as Greek debt crises eased down and on prospect EU countries will increase firewall against debt crisis contagion. European leaders are scheduled to meet in Brussels this Wednesday, and will decide whether to lift a 500 billion euro limit to its bailout funding. Separately, European Central Bank also prepares for a second round of cash lending this week, in order to support its regional banks. Market participants will pay close attention to the publication from the ECB’s officials as that will provide the detailed inside into the stresses that remain in the Eurozone’s banking system. Looking to the week ahead, Eurozone manufacturing, consumer confidence and unemployment figures headline the economic calendar. 

The dollar dropped against the euro during Asian session as demand for safe haven assets eased at the beginning of the week on latest  Eurozone debt crisis developments. Looking to the week ahead, ISM manufacturing index headline the economic calendar and is forecasted to improve to 54.6 from 54.1 in January. Chicago PMI index, scheduled for Wednesday , is also expected to pick up the pace in February,  climbing to 61.3 from 60.2 a month earlier.

 

 

Euro Gains As German Business Confidence Rises

The pound consolidated during the overnight trade after Bank of England minutes  revealed that two policymakers voted for a larger increase in asset purchases than the amount finally agreed. Sterling dropped more than 1% against the euro as minutes showed that Adam Posen and David Miles voted for  a 75 billion pounds QE injection, while other MPC’s voted for a 50 billion pounds increase. The minutes report have brought back the speculation of a possible additional quantitative easing in a near future.  Looking ahead to today, BBA (British Bankers Association) lending data for January and CBI (Confederation of British Industry) industrial trend survey for February headline the economic calendar, with the expectations for the figures to improve slightly. 

The euro gained across the board this morning after German business confidence rose to a seven month high in February.  The Ifo institute said its business climate increased to 109.6 from 108.3 in January. That’s the fourth straight gain and the best reading since July 2011. The euro is still benefiting from Greek second bailout package agreement, as government bond yields  from Spain to Italy dropped to acceptable levels. Although the crisis in Greece have been contained for the time being, the euro area will continue to struggle to recover from a debt crisis in the region. 

The dollar was mixed during the Asian session, gaining against the pound, but dropping versus the euro on speculation the Federal Reserve will continue with its loose monetary policy. The greenback dropped before Fed Bank of New York President William Dudley gives a speech on US economy tomorrow. Looking ahead to today, Kansas City Fed Manufacturing data headline the economic calendar with the expectations for the figures to have  improved in February.

 

 

Pound Consolidates Before BoE Minutes

The pound consolidated against its major rivals during the overnight trade before Bank of England publishes Minutes from February meeting today at 9:30. The central bank’s monthly report will show how the nine-member Monetary Policy Committee voted on the expansion of its quantitative easing program. The BoE expanded its bond purchase target by 50 billion pounds to 325 billion pounds this month in response to the weakening economic recovery and Eurozone’s debt turmoil. Policymaker Charles Bean said yesterday that while inflation is easing and some recent business surveys have been encouraging, growth will be “sluggish” in the first half of 2012 as fiscal consolidation continues to weight on demand. 

The euro climbed across the board during Asian session after Greek government won a second bailout package and sent austerity measures to parliament for approval. Eurozone finance ministers granted 130 billion euro in aid for Greece and reached an agreement for greater debt relief from private investors in an exchange offer to stop the Greek debt auction next month. Looking ahead to today, PMI manufacturing and Services gauge headline the economic calendar across the Eurozone. Expect for the single currency to remain supported should we see economic data coming in line with expectations. 

The dollar consolidated against the broadly stronger euro, but gained against the pound and the yen on speculation the Federal Reserve will reduce the case for additional quantitative easing in the future. The greenback gained ahead of the housing data scheduled for today, as analysts expect for the housing market to start with the process of slow recovery. Sales of previously owned homes are expected to increase by 1.1% in January to a 4.66 million annual rate, the highest level since May 2010.

 

 

Euro Advances On Greek Bailout Deal

The pound consolidated against the broadly stronger euro as European leaders approved second bailout package for Greece. Sterling remained relatively flat against the dollar before January public finance figures are released today at 9:30. January is a key month for income tax receipts and the market consensus is calling for a PSNBx (public sector net borrowing excluding financial interventions) to be at –6.3 billion pounds and PSNCR at –24.7 billion pounds. Separately, MPC member Charles Bean is scheduled to speak to the Scottish Council for Development and Industry at 19:30. Expect for the pound to remain in current ranges should we see economic data coming out in line with expectations. 

 The euro jumped against the dollar and the pound during overnight trade after European Leaders agreed to give second bailout package to Greece. Finance ministers awarded Greek Government with 130 billion euro in aid and forced the private bondholders to take larger loses than they accepted last month. Luxembourg PM Jean Claude Juncker said the deal includes a 53.5% write-down for investors in Greek bonds. Looking ahead to today, Eurozone Consumer Confidence figures headline the economic calendar with the expectations for the February reading to improve slightly from previous month.

 

 

Euro Strengthens Before EU Summit In Brussels

The pound gained against the dollar during the overnight trade after UK house prices increased in February. Rightmove reported a 4.1% hike in asking prices on monthly basis, the largest increase since 2002, citing rising seller confidence owing to lack of homes for sale in more affluent areas. There are no major economic releases or policy speeches scheduled for today. Looking to the week ahead, Bank of England Minutes release headline the economic calendar, with the expectations for the MPC to have voted unanimously (9-0) again to keep Bank Rater unchanged at 0.5% and to have voted 8-1 to increase quantitative easing (QE) program by 50 billion pounds to 325 billion. Market participants are going to pay close attention to see if any members voted for a larger extension of a QE, indicating that more QE can come later in the year. 

The euro is higher against the dollar this morning on speculation European finance ministers will come to a common solution over a Greek  bailout package. Eurozone finance ministers are set to meet in Brussels today to seek an agreement on a 130 billion euro bailout for Greece. This would be second aid package for Greece in two years, and it is aimed to reconcile demands made on Greek politicians, a debt swap among private creditors and the role of the ECB. Looking to the week ahead, manufacturing and service sector figures headline the economic calendar this week, as they will give us a closer look on Eurozone growth prospects. 

The dollar consolidated across the board during the Asian session as investors believe that EU finance ministers will come up with a solution for Greece debt crisis at today’s meeting. The afternoon trade session is expected to be uneventful as US markets are being closed due to the Presidents’ Day bank holiday. Looking to the week ahead, housing data will headline the economic calendar, with the focus on any additional indications of a pick up after last week’s encouraging housing starts data for January. Expect for the dollar to remain in current ranges should wee see the housing data coming out in line with expectations.

 

 

Pound Up After Retail Sales Increase

The pound gained versus the dollar and the euro after UK retail sales unexpectedly rose for a second month in January. Sales including fuel rose by 0.9% from 0.6% in December, beating the analyst forecast of a 0.3% contraction. Bank of England Governor Mervyn King said this week that the economy should “gradually” recover this year as cooling inflation helps to reduce a squeeze on consumers’ finances, but the European debt crisis will weigh on growth. Looking ahead to today, BoE policymaker Adam Posen will speak at Warwick University today at 19:00. 

The euro gained against most of its major rivals on speculation EU officials are nearing to an agreement on a second bailout for Greece. Eurozone finance ministers will convene in Brussels on February 20 to discuss a second bailout for Greece that includes a debt swap agreement. Germany wants the EU finance ministers to avoid separating 130 billion euro bailout for Greece from the  planned bond swap with private creditors. Expect for the euro to remain in current levels for the remainder of the week before EU finance ministers summit on February 20. 

The dollar consolidated during the overnight session on signs the economic recovery in the world’s largest economy is gathering momentum. Looking ahead to today, the Conference Board’s Leading Indicators gauge  (US outlook for the next three months) is expected to increase by 0.5% in January after climbing 0.4% in December. Also scheduled for today is the Consumer Price Index figures, with the expectations for the cost of living in the US to have climbed by 0.3% from December.

 

 

Euro Declines On Greek Debt Concerns

The pound was mixed during the overnight trade, consolidating against the dollar, but gaining versus the broadly weaker euro as Greek debt crisis intensified. Sterling dropped against the dollar yesterday after UK unemployment figures rose more than forecasted and after Bank of England Governor Mervyn King said policymakers may expand their stimulus program further if debt crisis in the euro region escalate. Overnight, Nationwide Consumer Confidence Index showed that consumer sentiment rose to a five month high in January. The headline index rose to 47 from 38 in December, with a gauge of consumers’ outlook for the economy jumping by 14 points to 64 from 50. The report suggests that consumers are starting to feel the benefits of falling inflation, but project for the sentiment to remain volatile over the first half of 2012. Expect for the pound to remain driven by market risk aversion as there are no economic releases or policy speeches scheduled for today. 

Euro dropped against its major rivals before Eurozone leaders meet next week to decide on a 130 billion euro second bailout package for Greece. Some European politicians seems to be in doubt about Greece’s ability and commitment in implementing the austerity program to tightened the budget deficit. German Chancellor Angela Merkel will travel to Rome tomorrow for talks with Italian PM Mario Monti to discuss rescue for Greece ahead of the EU finance ministers summit. Looking ahead to today, France and Spain are scheduled to auction 14.3 billion euro of government debt today. 

The dollar gained across the board during the Asian session as European debt crisis deepen and as Moody’s Investor Service said it may downgrades 17 global banks.  The ratings for UBS AG, Credit Suisse AG and Morgan Stanley might be lowered by as much as three levels, while Goldman Sachs Group Inc, Deutsche Bank AG and JP Morgan Chase may be cut by two levels. Expect for the dollar to remain supported against its major rivals as increased risk aversion in the markets drive investors into the safety of the US currency.

 

 

Euro Advances As Greek Government Pass The Bill

The pound gained against the dollar during the Asian session after Confederation of British Industry (CBI) said the UK will avoid technical recession this year, avoiding the need for more BoE stimulus. The CBI Director John Cridland said that country will start to grow in first quarter of 2012 and they do not believe the central bank will add additional financial stimulus. There are no economic releases or policy speeches scheduled for today. The main event of the week is the Bank of England publication of the February Inflation Report on Wednesday. The additional 50 billion pounds of quantitative easing program announced last Thursday should mean the policy members have stronger projections on GDP and inflation than in November. Consumer price data for January  is published on Thursday, and the expectations for the CPI inflation is to fall back to 3.6% from 4.2% in the previous month. RPI inflation is also expected to fall to 4.1% from 4.8% in December. A CPI outturn of 3.1% or higher will mean that BoE Governor Mervyn King will have to write another letter to the Chancellor explaining why inflation is so high. On Tuesday we also receive RICS Housing Survey, with projections for the prices to have dropped in January. Finally, the ONS publishes retail sales data for January on Friday. Analyst anticipate the headline sales figure to have dropped by 0.3% from previous reading. 

The euro gained across the board during the overnight trade after Greek PM Lucas Papademos won approval from parliament for austerity measures to secure a second package of financial aid. The Greece’s vote on spending cuts puts the spotlight on a meeting of Eurozone finance ministers on February 15 that must decide whether to approve the 130 billion euro rescue package. Looking to the week ahead, growth figures from the Q4 of 2011 are scheduled for Wednesday, with the expectations for the Eurozne GDP to have contracted by 0.4% in last three moths of the year. On Tuesday, the release of industrial production figures for December will give us more insights into the Q4 GDP number, but analysts do not sound extremely positive about the release. However, the glimmer of hope could come from the business confidence surveys, with German ZEW survey predicted to rise by 1.6 points from last month to 30.5 for February. Expect for the euro to remain volatile this week ahead of the Eurozone GDP reading and before EU leaders meet  on Wednesday to decide Greece’s future in the euro region.