European majors and stock indices fell sharply today as Fitch warned of a “cataclysmic” collapse of Euro, unless ECB scale up its bond purchase. David Riley, head of the sovereign-debt unit at Fitch, said ECB has much scope to expand the balance strength and ECB could pledge to cap interest rates, keep bond yields below 7% or turn EFSF into a bank. Riley warned yesterday that Italy is the “front line” of Europe’s debt crisis and “the future of euro will be decided at the gates of Rome”. He further said that Euro could not survive if “Italy does not make it through. Also, worries on recession in Germany also weigh on sentiments. An unofficial estimate from the Federal Statistics Office in Wiesbaden showed German economy shrank around -0.25% qoq … Read entire article »

By: Barbara Zigah In Asian trading, the Euro slipped further against the U.S. Dollar, indeed falling against most currencies, as investors trade cautiously in the day ahead of an ECB policy meeting and a Spanish bond auction. As reported at 10:51 am (JST) in Tokyo, the Euro was trading against the greenback at $1.2747 a 0.2% decline from late trading in N.Y., recovering from a 16-month low of $1.2666 which was established on Monday on the EBS trading platform. Against the safe haven Japanese Yen, the Euro slipped to 98.02 Yen, a 0.2% drop and close to the decade-long low struck on Monday. The common currency is also trading lower against commodity-linked currencies, and held close to a record low against the Australian Dollar when it traded at A$1.2355 yesterday. Likewise, … Read entire article »

Dollar is mildly firmer in mixed Asian markets today. DOW breached 12500 psychological level briefly overnight but failed to sustain gain above there. Asian equities are generally firmer but without clear follow through buying. Earlier selloff in the greenback seems to be losing momentum. In particular, EUR/USD and GBP/USD are showing mild sign of weakness as the recovery lost steam. The economic calendar is light today and markets would remain cautiously in range ahead of ECB meeting tomorrow. Bond auctions will also be a major focus in the latter part of the week. Germany will auction EUR 4b of five-year notes today. Spain will auction EUR 5b of 2015, 2016 bonds tomorrow. Italy will also sell EUR 12b of bills. While Fitch assured France’s AAA rating for 2012, it warned … Read entire article »