Eur/usd - page 264
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Very good news posts. Very helpful and informative. keep it up. good job.
EUR/USD: Euro Edges Higher, Greece in Sharp Focus
The euro has been trading in a narrow range on Tuesday, with fairly quiet sessions on the macro front ahead on both sides of the Atlantic. Greece managed to make the €750 million payment to IMF last night, although it appears that the Hellenic country is rather hardening it's stance with creditors.
"That ongoing tension – which seems set to continue - understandably hit EUR, which has slipped as far as 1.1140; but it hardly argues for a sell-off in core bond yields too. Indeed, rather than fear over a looming end to ECB QE or Fed rate hikes, markets seem confused, and so can find good reasons for not wanting to hold anything right now," Rabobank wrote in a note on Tuesday.
The EUR/USD bounced from the overnight lows and rose 0.19% to $1.1175 ahead of the opening bell on Tuesday.
Although Greek officials confirmed the country made the payment to the IMF a day ahead of schedule, uncertainty remains over the progress on reforms and the agreement on the bailout. Euro zone finance ministers have acknowledged progress in talks between Greece and its creditors, but there are still some major issues to solve and little time remains to prevent the Greek debt crisis exploding.
"We welcomed the progress that has been achieved so far. We note that the reorganization and streamlining of working procedures has made an acceleration possible, and has contributed to a more substantial discussion," the Eurogroup said in a statement issued after the meeting.
"The reality is that neither side seems in the mood to back down, making capital controls and a default more or less inevitable, despite assertions that progress is being made. It is certainlyharder to make the argument that Greece’s debt is anyway sustainable at current levelswhich makes theIMF’s future participation that much harder to justifyunless there is some form of debt restructuring, a move that is a “red line” for EU creditors," Michael Hewson from CMC Markets UK wrote on Tuesday.
"There has been talk that pressure is being put on Chancellor Merkel to drop her opposition to cutting Greece loose, while all of a sudden Germany appears to have dropped its opposition to a Greek referendum, after being fiercely opposed to one all the way back in 2011. This change of position suggests that Germany is relaxed about the outcome, whichever way it goes, and that Europe is sufficiently firewalled in the event of a vote to leave," Hewson added.
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EURUSD fell on yesterday session for the 3rd day in a row. The currency fell and closed in the red near the low of the day, on a 2nd narrow range day, showing that the downward move is losing momentum as the Greek government remains hopeful that the talks will lead to vital aid being released, which will enable the country to avoid default.
EUR/USD: Euro Cheers Marching German Bund Yields
The EUR/USD pair was boosted by rising German benchmark bund yields, which saw another rapid improvement on Tuesday, while traders monitor talks between Athens and euro zone officials.
The euro surged 1.03% to $1.1270 versus the US dollar on Tuesday, making more than 150 pips on the day from its intraday low $1.1133.
Yields on the benchmark 10-year Bunds edged up over 10 basis points to 0.717% during the mid EU session. Just a day ago, they hovered aroundthe 0.580% mark.
"We remain long EUR from 1.1142 as of May 5. EUR may have one more chance to run at 1.14-1.15 before the topside move is completely exhausted and long term shorts step up to the plate. Note that all our model signals are bullish EUR – higher bund yields drag up our EUR total yield signal, better data trends of late give the region a positive growth signal, higher oil prices boost the currency’s rating in our logit signal while the region's still very healthy external surpluses keep our current account momentum model firmly bullish EUR too," Westpac economists wrote in a note on Tuesday.
Euro zone finance ministers said during the Eurogroup meeting on Monday that progress in talks between Greece and its creditors has been made, but warned that "more time and effort are needed to bridge the gaps" on remaining issues.
Greece's Finance Ministry repaid a €750 million loan to the International Monetary Fundon Monday, a day earlier than originally scheduled.
"Now that Greece has made this payment this particular narrative is starting to become rather tired and at some point this train will hit the buffers, and the money really will run out, while investors continue to bet that one side will eventually blink and pull back from the brink," Michael Hewson from CMC Markets said.
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Euro Debt Rout Deepens as Commerzbank Says Don’t Be a Hero Yet
As the selloff in euro-area government bond markets deepens, the top-ranked primary dealer for German debt says now is not the time to be a hero by betting on a reversal.
Bonds across the currency bloc tumbled as the biggest jump in U.S. Treasury 10-year yields since Feb. 6 on Monday cowed investors preparing for debt sales this week. The Netherlands auctioned 2.4 billion euros ($2.7 billion) of 10-year bonds on Tuesday, while Germany sold index-linked debt due in April 2026. Italy is scheduled to offer as much as 7 billion euros of securities on Wednesday.
“What’s new in this is that now it seems to be the U.S. side of things driving things lower,” said Christoph Rieger, the Frankfurt-based head of fixed-income strategy at Commerzbank AG, which is ranked first among dealers by the nation’s debt agency. “With the supply that is coming up, which is certainly a factor, the market still may be tempted to test the lows. Now is not the time to be bold.”
German 10-year bund yields climbed 12 basis points, or 0.12 percentage point, to 0.73 percent at 12:34 p.m. London time, headed toward the highest level this year. The yield has surged from a record-low 0.049 percent set as recently as April 17. The 0.5 percent security due in February 2025 dropped 1.09, or 10.90 euros per 1,000-euro face amount, to 97.87.
The market remains vulnerable to more selling in the coming weeks, yet yields should decline by the middle of the year, Commerzbank’s Rieger said.
Italy’s 10-year bond yield increased 13 basis points to 1.90 percent and Spain’s jumped 13 basis points to 1.88 percent.
ECB Program
Bonds have been selling off as investors turn against record-low yields and weigh the possibility the European Central Bank may end its quantitative-easing program sooner than it has indicated or cause too great a squeeze on supply.
The euro-region’s government securities lost 1.4 percent in April, the first monthly drop since December 2013, according to Bloomberg World Bond Indexes. As that decline extends into May, investors are questioning how far it will go.
“We are certainly not counting on a big revival of interest rates,” Dieter Wemmer, chief financial officer at Allianz SE, Europe’s biggest insurer, said in an interview on Bloomberg Television’s “Countdown” with Mark Barton. “It seems there are some market forces that tried to pre-empt the QE activities of the European Central Bank and therefore we see now probably waves of market distortion between QE and other acting forces.”
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EUR/USD news
Euro reported minimal losses since the beginning of the day.EUR/USD pair attempted to consolidate around 1.1200 after in the past few days there was no clear advantage for either of the 2 currencies. For the moment, the rise of the euro is suspended and we can expect a return of the profit of the dollar, if the price falls below 89-day moving average positioned around 1.1025.
Price failed to break either the support 1.1130 and the resistance 1.1300 price is now on half way until I see a break or a rebound from the resistance and support level I will stay neutral.
German Thunderbolt Slows in Q1, But Growth Stays Robust: GDP
The German economy entered the year with a relaxed pace of expansion, the country's Statistical Office said in a quarterly preliminary update on Wednesday.
Germany's GDP in the first three months of 2015 expanded 0.3%, following the 0.7% upturn seen in the final three months of 2014.
On an annual and non-seasonably adjusted basis, the euro area's number one economy added 1.1%, compared to the 1.6% expansion seen in the fourth quarter.
Economic desks had called for 0.5% and 1.3% growth, respectively.
Growth engine
Back in the fourth quarter, the figures markedly outpaced estimates as economic recovery in Germany started much earlier than expected. Some spoke of possible recession after the summer, but instead the country rebounded, making Berlin the undisputed growth engine among the 28 members of the union.
Growth is expected to remain robust even later in the year. Earlier in late April, influential economic think-tanks, namely the DIW in Berlin, IWH in Halle, Ifo in Munich and RWI in Essen, predicted that the country's GDP would expand by 2.1% this year, faster than the 1.6% recorded in 2014.
The 2015 forecast was also much higher than the 1.2% they had foreseen last autumn.
'Robust upturn'
"The German economy is in a robust upturn, stimulated by unexpectedly expansive impulses, particularly the drop in oil prices and the sharp devaluation of the euro," the institutes said in their traditional spring forecast.
According to the European Commission's latest Spring Economic Forecast, real GDP in Germany is expected to increase by 1.9% in 2015 and 2.0% in 2016, while inflation is projected at 0.3% in 2015 before rebounding to 1.8% in 2016.
The German economy is the strongest engine of growth in the euro zone and positive growth will be good for the ECB as it can show that the much awaited QE program is bearing fruit. The Greek drama has limited the effect of QE as it has eroded business and consumer confidence.
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On yesterday session EURUSD rose and close in the green in near the high of the day, above the 10-day moving average. The currency is still in a recovery phase and stochastic is showing a slight bearish to neutral momentum but still above the 50 mid line.
Expecting an upward move to year high at 1.1459 on a break above previous day high at 1.1278 (scenario 1) or a break below the daily support at 1.1097 could drive the pair down to a key level at 1.0900 (scenario 2).
March 2015 Eurozone IP -0.3% vs 0.0% exp m/m
Eurozone industrial production data 13 May 2015
That's taken what litte positive vibe there was from the GDP numbers as production sinks.
EURUSD slips to test 1.1200 from 1.1235