CFD Markets News and Forecasts — 18-04-2011

Yen and swiss franc gained as concerns grew that efforts to resolve Europe’s debt crisis may stall after election results in Finland showed gains for a euro-skeptic political group.
Finland’s Justice Ministry said support for the True Finns, whose leader Timo Soini says taxpayers shouldn’t have helped rescue Greece or Ireland, jumped to 19 percent in elections yesterday. A permanent bailout fund for indebted euro-area nations requires approval from all 17 members of the bloc.
Greece may not be able to avoid restructuring its debt before summer’s end, said Otto Fricke, the parliamentary budget spokesman for Chancellor Angela Merkel’s Free Democratic Party coalition partner.
“The big question is: Will Greece make it through summer without buckling and having to find some means of restructuring its debt?” Fricke said today by phone. “The signs aren’t good, though I defy any easy predictions.”
“Restructuring is not an issue we’re discussing,” Finance Minister George Papaconstantinou said in an April 16 interview in Washington.
The statement was supported by European Union spokeswoman Chantal Hughes who told reporters in Brussels today that “restructuring is not an option that’s on the table.”
Later Greek official said restructuring is a matter of time. Greece ultimately will not be able to avoid restructuring its sovereign debt, an unnamed Greek government minister told the German daily Die Welt in an interview to be published Tuesday.

The overall tone of trade has been negative since the opening bell, but a handful of stocks have managed to tick higher. Akamai Technologies (AKAM 39.37, +1.28) is among them; the stock's 3% surge comes even though there has been now headline or other catalyst to account for the move. Meanwhile, financial plays Citigroup (C 4.46, +0.04) and M&T Bank (MTB 87.15, +1.80) are up after the pair posted upside earnings surprises for the latest quarter.

After stabilizing for a few minutes, stocks have started to slide lower. The S&P500 sitting just above the psychologically significant 1300 line. The stock market hasn't been below that point in more than three weeks.
Treasuries have failed to attract much support, even though stocks have been shunned. The weakness surrounding Treasuries comes in the wake of news that analysts at S&P assigned a negative outlook to the AAA rating of the U.S.
Declining Sectors: Energy (-2.0%), Materials (-1.9%), Industrials (-1.9%), Tech (-1.8%), Financials (-1.5%), Telecom (-1.0%), Utilities (-0.7%)

EUR/USD: $1.4300, $1.4420, $1.4430
USD/JPY: Y83.80, Y84.00
EUR/JPY: Y121.00
GBP/USD: $1.6250, $1.6300
AUD/USD: $1.0400, $1.0450, $1.0500
AUD/JPY: Y86.00

U.S. stocks were poised to start Monday in the red, as investors faced new concerns about the global economy, while awaiting quarterly results from more than 110 members of the S&P 500 this week.
Analysts say earnings and economic reports are front and center on investors' minds. And issues across Europe - a downgrade of Irish banks and a victory by the anti-bailout True Finns party in Finland - are, once again, weighing on sentiment.


Companies: Former Dow component Citigroup (C, Fortune 500) reported earnings per share of 10 cents, slightly better than forecast. The bank's revenue rose 7% to $19.7 billion, just missing expectations.
Drug maker Eli Lilly (LLY, Fortune 500) and oil services company Halliburton (HAL, Fortune 500) both posted results early Monday that topped analysts' forecasts, and their shares were up more than 1% in premarket trading.
Newspaper chain Gannett (GCI, Fortune 500) reported earnings per share in line with estimates, but fell slightly short on revenue.
Chip maker Texas Instruments (TXN, Fortune 500) will report after the bell.

AUD/USD remains under heavy selling from UK clearers. Rate printed day's low of $1.0510. Talk of some hefty bids placed $1.0505/10. Offers mixed with stops around $1.0585 up to reported barriers at $1.0600 and $1.0610. Aussie trades $1.0520/22.

EUR/JPY off the recent lows of Y118.23 but the bounces unconvincing. Break down through Y118.22 (April 1 low) now opening a deeper move to Y116.74. Cross trades Y118.44.

The euro fell for a second day against the dollar on speculation Greece will be unable to avoid a default, even after officials said debt restructuring isn’t being discussed.
The single currency declined to a two-week low versus the yen on concern election gains by Finland’s euro-skeptic bloc will hinder regional efforts to assist ailing nations, including Portugal and Ireland.
Greek bond yields surged to records.
“The latest developments in the euro region have a potential to provide hurdles for the euro,” said Jane Foley, a senior currency strategist at Rabobank International. “The situation in Finland has to be monitored very closely, because it’s reflecting a trend in the political landscape of the region. There’s clearly fear among voters that they have to pay for fiscal mistakes of others.”
Greece found support from IMF Managing Director Dominique Strauss-Kahn and French Finance Minister Christine Lagarde after German Finance Minister Wolfgang Schaeuble was quoted as saying “further measures may have to be taken” if Greece fails an audit in June.
New Zealand’s dollar dropped against all of its major counterparts as data showed consumer prices rose less than forecast.  New Zealand’s consumer prices rose 0.8% in the first quarter from three months earlier, the government said today. Economists forecast a 1% gain.

EUR/USD tries to recover, but reached $1.4390 only before was dragged down to a fresh session lows around $1.4265.


GBP/USD fell from $1.6310 to $1.6240. Later rate recovered to $1.6270.

USD/JPY printed lows around Y82.60 before it was back to Y82.90.

EUR/USD continues to get down and currently holds at frech session lows around $1.4282. Bids were earlier mentioned here. Tech support comes at $1.4270 to $1.4250. Stops noted on a break of $1.4240.

Gols retreats from the earlier Asian all time high of $1488.90, The metal has slipped back to $1480, where it found some bids from Indian names ahead of the May 6 Akshaya Tritiya festival. Gold trades around $1481.10

GBP/USD tested support into $1.6250 ($1.6252 76.4% $1.6244/80) but still remains above. Stops now seen placed on a break of $1.6240, which if triggered to open a deeper move toward $1.6235/25.

• Still much uncertainty;

• EMU growth has 'some level of sustainability';

• Latest spread widening not caused by ECB monetary policy;

• Not time to say anything about Greek debt restructuring;

• Improvement of situation in Greece occurring, very slow;

• Spain in a different situation.

• Still much uncertainty;

• EMU growth has 'some level of sustainability';

• Latest spread widening not caused by ECB monetary policy;

• Not time to say anything about Greek debt restructuring;

• Improvement of situation in Greece occurring, very slow;

• Spain in a different situation.

EUR/GBP fell under stg0.8800 as the euro comes under fresh pressure. Support were tested around stg0.8795/90. Some bids were mentioned there with stops noted below.

The euro extended losses on Monday after repeated attempts to break above a resistance level failed, placing focus on renewed worries about euro zone debt problems and giving the dollar a much needed reprieve after heavy selling in the past few weeks.
The euro fell as markets grew uneasy after Finnish voters handed the anti-euro True Finns party a crucial role in parliament and possibly into government.
Finland's parliament, unlike others in the euro zone, has the right to vote on EU requests for bailout funds, meaning it could hold up costly plans to shore up Portugal and bring stability to debt markets.

Still, market players expect the common currency to be supported by prospects of another interest rate hike, after data showed euro zone inflation climbed higher than expected in March to 2.7% year-on-year.
"In the end, I think what it probably boils down to is that there are still some long positions in the euro," said Koji Fukaya at Credit Suisse Securities.
The euro's failure to hold above $1.45 suggests that a bigger near-term pullback may be in store. Earlier, the euro briefly dipped below support near $1.4365. A clear break of that level and the April 6 intraday high of $1.4350 could open the way toward a deeper drop. Possible downside targets include $1.4263 (23.6% retracement of the euro's February to April rally), and $1.4104 (38.2% retracement of the same move).
Meanwhile, the yen rose broadly, at one point hitting its highest in more than two weeks against both the dollar and the euro.

USD/JPY pulled sharply lower to Y82.65 by further euro-yen sales following the Spanish auction results. Bids remain at Y82.50. Currently rate trades Y82.83.

• restructuring would have catastrophic consequences;

• Greece GDP at -3% in 2011; could be worse;

• 2011 unemployment in Greece to exceed 15%;

• see 2011 average annual inflation at 3.25%;

• economic policy must target inflation;

• spending cuts should not target lower incomes;

• state guarantees needed to boost bank liquidity;

• Greece should increase fiscal adjustment effort.

• restructuring would have catastrophic consequences;

• Greece GDP at -3% in 2011; could be worse;

• 2011 unemployment in Greece to exceed 15%;

• see 2011 average annual inflation at 3.25%;

• economic policy must target inflation;

• spending cuts should not target lower incomes;

• state guarantees needed to boost bank liquidity;

• Greece should increase fiscal adjustment effort.

June WTI Crude went through support at $109.22 to a low of $109.09. Earlier oil rose to $109.95 in Asia. Further support is seen at $108.52 with resistance at $111.02. WTI currently trades $109.34/37.

AUD/USD backs to $1.0540 area after latest rally stalled at $1.0556. rate was dragged down amid EUR/USD failure to recover through $1.4355 as Spanish auction results disappoint. Bids remain towards the recent low of $1.0525.

Fitch says that under its baseline scenario, it expects Irish debt to peak at 116% of GDP in 2013/14. 
Fitch notes that Ireland's solvency is fragile and significant threats to an economic recovery and fiscal consolidation remain. 

On Monday the yen gained, rising from an 11-month low against the euro, after an aftershock of Japan’s March 11 earthquake discouraged demand for higher-yielding assets.