As the majority of executives and analysts agree that the impact of Greek exit from Eurozone is difficult to predict, multinationals prepare for the worst to be well-equipped in case any contingency arises. Companies mostly are concerned about cash retrieval, should Greece reverts to the Drachmas, paralysis in international payments, breakup of the Euro and civil unrest in Greece.
With Greece's deepening financial crisis, Cyprus is increasingly likely to become the fourth Eurozone country to ask for financial aid, as it struggles to protect the banking system from the Greek contagion. Cyprus's second biggest bank has already sought government financial support for a recapitalization, causing Cyprus to miss the budget targets this year.
Investors are becoming more and more worried, as discouraging news are coming from all over the world, with policy makers being under pressure to undertake measures in order to spur economic growth. Asian markets tumbled further on Monday morning, whereas the strong Yen continues undermining Japanese exports, pushing Nikkei to a new 2012 intraday low. China's manufacturing last week was
10-year notes yields tumbled to 1.47% as the U.S. Labor Department reported a payrolls increase of just 69,000 in May, far below analysts' expectations. Figures for previous 2 months were revised downwards, unexpectedly pushing the unemployment rate up. Yields on 30-year notes closed at 2.54%, 5-year notes – at 0.62%.
Crude oil fell below USD 84 per barrel as the recent statistics on European, U.S. and Chinese economies ruined hopes for higher demand for energy. Light, sweet crude oil futures for July delivery lost 3.6% to USD 83.41. A decline for the week reached around 8%. The United States gained just 69,000 jobs in May, the most modest improvement in a year, while the
The Euro area's PMI dropped from 45.9 to 45.1 representing the fastest jump during three years. According to Chris Williamson, Markit's chief economist, the financial recession and the political issues are spreading around the area negatively impacting the manufacturing movement. Williamson added that the figures signify a decrease in the sector by 1% per quarter.
According to Taimur Baig, who is Chief Economist of Global Market Research in Deutsche Bank, stagflation will persist for two more quarters, and inflation will possibly reach 7.8%. According to the expert, inflation will remain above the trend, while economic growth will slow down.
Indian manufacturing sector steadily continued developing in May. Manufacturing PMI, according to Markit, decreased insignificantly from 54.9 to 54.8. It has been staying above 50, which points to growth, for the last three years.
Although, non-farm payrolls missed estimates, the U.S. dollar rose against other major currencies on Friday, as concerns about European and Chinese growth continue. EUR/USD was traded at 1.2318, gaining 0.40% today.
Chief Economist of High Frequency Economics, Carl B. Weinberg, said that prices for German bonds may fall down by 35%, since it is possible that buns could lose their safe haven asset status, as Eurozone crisis expands.
The ISM reported that PMI for Chicago decreased from 56.2 to 52.7 in May. Whereas analysts had predicted that there would be a slight gain of 0.3. Chief market strategist from Worldwide Markets says that such weak statistics from U.S. can push other markets into stagnation.
Futures for natural gas declined in European trading session. On the NYMEX July delivery futures were traded at USD2.353 a MMbtu, tumbling 2.85%. USD2.353 is the likely level for support, whereas resistance is prone to be at USD2.610.
USD rose versus the Swiss Franc in European morning trading session. USD/CHF was traded at 0.9748, gaining 0.36%. It is likely that support lies at 0.9529 and resistance is prone to be at 0.9753, namely Friday's high.
On the NYMEX August delivery futures for gold were traded at USD1553.25 per troy ounce, shedding 0.70%. It was previously traded at USD1549.25, which was a session's low. Support is prone to be at USD1532.55, whereas resistance is likely to be at USD1585.65.
As the economic state of the E.U. is in jeopardy, many investors in May saw the dollar as a safe haven. The U.S. dollar posted its top earnings since the year 2011 by outperforming stocks, commodities and bonds. In actual figures, the Intercontinental Exchange Inc.'s Dollar Index rose by 5.5%, the Dollar Index grew by 3.8% in the respective month.
Following 12.7% unemployment rate in the previous year, according to Vitor Gaspar, The Finance Minister of Portugal, the jobless rate in the country will increase to 15.5% in 2012 and to 16% in 2013. The Minister also added that afterwards a decline should be experienced in the unemployment levels. The initial projections for the year 2012 were 14.5%.
With the increase of Japan's capital spending by 3.5%, the more likely are the chances for the country's successful rehabilitation from the earthquake in 2011. In addition, other factors contributing to Japan's recovery are stable exports to the U.S. as well as the revival of the country's key companies. Consequently, coupled with the European crisis and anxiety regarding Greece's exit, the yen is growing in
Rural commodities slid on Thursday on broadly stronger US Dollar and improving weather conditions in the US and Russia.Wheat dropped by more than 1% as falling corn prices started to erode wheat's appeal as more cost-efficient feed alternative for livestock production in the US. Moreover expected rainfalls in the US and Russia are likely to boost crop prospects.Corn sank because
Energy markets apart from natural gas fell on Thursday as deteriorating situation in the Eurozone continued to dent demand prospects.Crude oil declined by more than 1%, posting the largest monthly decline in the last three years. Turmoil in the Eurozone and slowing China's economy weighted down on the commodity price.Brent oil plunged amid weakening demand; however, lack of resolution of
Industry metals tumbled on Thursday amid indications of cooling manufacturing activity worldwide and continuous economic uncertainty in the Eurozone. Aluminum dropped as weak manufacturing and job market data from the US pressured the light metal. Copper fell on potential increase in global supplies as Peru plans to boost red metal's output by 75% by 2015.Nickel posted losses despite expected increase
Precious metals were mixed on Thursday as Fed announced that new round of quantitative easing is highly unlikely despite softer than expected labour and manufacturing data.Gold ended the day on a negative note as persistent turmoil in the Eurozone pushed EUR/USD to two-year low of 1.2314.Silver followed bearish trend amid weakness of global equities and rallying US Dollar. Platinum managed
As the demand from China and Europe is weakening so are the South Korean exports, which have declined by 0.4% from the previous USD 47.2 billion, as stated by the Ministry of Knowledge Economy. The ministry also provided export figures based on the initial 20 days in May signifying that the overseas sales to the E.U. plunged by 16.4%, exports declined by 10.3%
Based on Istat statistics, the Italian unemployment surged to 10.2%, the highest in a 12-year period, exceeding all forecasts. The previous joblessness figures was 9.8% in Q1 2012 and 9.1% in Q4 2011. To ameliorate situation in the labour market, the Senate located in Rome issued an overhaul encompassing regulations regarding the recruitment and termination of employees. However, prior to its implementation the reform should be
Eurozone manufacturing activity fell further in May, indicating that the economy will continue experiencing difficulties as the debt crisis escalates. The data coming from France and Spain shows that the figures are at the lowest level for the past three years, as well as the reading of Germany was negative, meaning that the Euro bloc's biggest economy is influenced by the troubles of periphery countries.