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Pessimism continued to dominate global financial markets on Tuesday, where traders were still worried from the European debt crisis amid speculations Greece could still be forced to a selective default, in addition to fears that the debt crisis will spread to other nations in the Euro Zone including Italy and Spain. The pessimism had drove higher yielding assets to drop earlier today, where lower yielding assets including the U.S. dollar and the Japanese Yen gained against most major currencies, nonetheless, the U.S. dollar lost some of its momentum after the trade balance in the United States showed a larger than expected deficit, where the U.S. trade deficit widened to $50.2 billion, compared with the prior deficit of $43.6 billion and worse than the expected deficit of $44.1 billion, which weighed down on the U.S. dollar, and led other majors to trim their earlier losses. Stocks in the United States though fluctuated between gains and losses by opening on Tuesday, where the Dow...

  Contagion fears not only continue in Europe but have actually grown. The European debt crisis might spread from Greece, Ireland and Portugal to Italy and Spain. And combined with the poor jobs report from the U.S. and China's rising inflation, heavy selloffs were seen across the board. The European finance ministersfailed after their meeting in Brussels yesterday to ease the fears since no quick fix or clear commitmentwas shown. Meanwhile the new IMF chief added to the worries after saying that the IMF is not ready to discuss the second bailout for Greece. This ignited fears from a possible default by Greece and the markets started pricing such a scenario especially since Italy is now threatened by Greece's possible default and is on the edge of collapse. Thereby the euro extended its heavy losses as investors continue to avoid risk and look for safe heaven. The euro fell as of this writing to the lowest of 1.3835 from the highest today of 1.4061,...

Pessimism continued to dominate investors with the start of the new week, where investors were still concerned over the outlook of the U.S. economy after the jobs report last Friday showed weak job growth in June, while jitters from the European debt crisis mounted with Italy now topping the headlines. Investors fear that the European debt crisis will spread to the Euro Zone’s third largest economy, where EU officials are meeting in Brussels to discuss the European debt crisis and Italy’s situation, where investors fear that Italy will be the latest victim of the EU debt crisis. Rising fears in markets increased demand for lower yielding and safe assets including the U.S. dollar, the Japanese Yen, and gold, while investors shunned risky assets including major currencies, equities, and commodities including crude oil. Stocks in the United States extended their losses by opening on Monday, where the Dow Jones Industrial Average was down by nearly 1.10% to trade around 12,517, while the S&P 500...

    Since contagion fears are growing in Europe determining the European officials to hold an emergency meeting in Brussels today, confidence has evaporated from the markets and the safe heaven dollar has been pushed aggressively to the upside alongside the yen. The European and Asian stock markets fell today while the euro slid to a two weeks low on fears the European debt crisis might spread to Italy, where there is a disagreement between the Italian Prime Minister and the Finance Minister which could threaten the passage of a 40-billion euro deficit-reduction plan. The Euro Zone debt crisis contagion and the global economic slowdown fears hurt investors' appetite for risk, thereby the euro was driven aggressively to the downside hitting the lowest of 1.4115 as of this writing while the pound is trading around the lowest of the day at 1.5944. The dollar index is trading above the 75.60 level as of this writing while the yen is consolidating around the 80.70 level. Fears from...

A huge wave of pessimism dominated global markets on Friday after a disappointing jobs report from the United States showed job growth remained weak in June, while unemployment rose unexpectedly above expectations, which forced investors to shun risky assets and target lower yielding and more safe assets. The U.S. jobs report for June showed that Non-farm payrolls increased only 18,000 jobs well below forecasts of 105,000 added jobs, and following a revised 25,000 added jobs back in May, while unemployment rose to 9.2% from 9.1%. Investors were feeling optimistic ahead of the jobs report, since the ADP employment report released on Thursday suggested that private employers in the United States added 157,000, nonetheless, the jobs report showed that private payrolls increased by 57,000 jobs in June well below forecasts of 132,000 added jobs. Stocks in the United States fell heavily by opening on Friday after the huge disappointing Jobs report, where the Dow Jones Industrial Average was down by nearly 1.10% to trade...

  Markets are focused today on the U.S. jobs report, and since the U.S. is expected to add more jobs in June than the previous month, gains where seen within the Asian and European stock markets on Friday. The strong ADP employment report yesterday sparked optimism among traders for today's infamous jobs report which is expected to show that the U.S. economy added 105,000 jobs in June from 54,000 in May. A strong Non-farm payrolls number will most likely support confidence in markets and boost demand for high yielding assets, lowering demand on safe heaven, including gold which fell as of this writing to the lowest $1525.10. Yesterday the ECB delivered the a rate hike while BoE maintained its monetary policy firmly in place. As expected Trichet refrained from signaling an August rate increase yet he confirmed the ECB will suspend the collateral rules for Portugal. Markets will continues to trade with a mixed sentiment awaiting the U.S. report, where the dollar index is consolidating...

Optimism spread through European and U.S. markets on Thursday after labor data from the United States beat expectations and rate decisions from Europe came in line with forecasts, where the S&P 500 rose to its highest since May 13 amid rising optimism in markets. Moreover, retailers reported better than expected sales in June, as they offered discounts to consumers, which boosted sales. The ADP employment change for June showed U.S. private employers added 157,000 jobs, more than double the 70,000 added jobs forecasted and rising from 36,000 added jobs in May, while jobless claims fell to 418,000 last week from 432,000, better than median estimates of 420,000. The better than expected labor data sparked optimism among traders ahead of Friday’s jobs report, which is expected to show Non-farm payrolls increased in June by 100,000 jobs. Meanwhile, rate decisions from Europe came in line with expectations, where the Bank of England left the benchmark interest rates unchanged at 0.50% and also left the...

The ECB as expected hiked rates by another 25 basis points to 1.5%. The EUR was on the backfoot overnight, and slid in the wake of the 7:45AM ET announcement. However, during Trichet’s comments, the EUR got a bit of a bounce, as Trichet used phrasing signifying that an interest rate meeting may come in September, the meeting after next. From the Introductory Statement: “Based on its regular economic and monetary analyses, the Governing Council decided to increase the key ECB interest rates by 25 basis points, after raising rates by 25 basis points in April 2011 from historically low levels. The further adjustment of the current accommodative monetary policy stance is warranted in the light of upside risks to price stability. The underlying pace of monetary expansion is continuing to gradually recover, while monetary liquidity remains ample with the potential to accommodate price pressures in the euro area. All in all, it is essential that the recent price developments do not give...

Inflation Remains Above ECB’s Target: Inflation continues to remain a problem for the Euro-zone. ECB officials have been quite adamant about the need to hike rates to 1.5% this week with Trichet constantly re-using the term “strong vigilance” in regards to inflation over the past few weeks. The use of that phrase usually implies that Trichet and the Governing Council are ready to raise rates in the following meeting. Headline annual inflation has hit a high of 2.8% this year, but the index fell back to down to 2.7% in the flash version for June. The ECB can take that as a sign that inflation pressures are easing, considering oil prices have come down off their peaks in February. Still, the ECB’s mandate dictates price stability and the Governing Council will want to see inflation come down further in the second half of the year. Last Month’s Statement Put Emphasis on Price Stability: Here’s the opening paragraph from Trichet’s last introductory statement: “The information that has become available since...

  Most of European and Asian stocks rose on Thursday, as banking shares gained in Asia after China raised the benchmark interest rates, while European markets are waiting for key rate decision from the Bank of England and the European Central Bank, where BOE is expected to leave rates unchanged at 0.50%, while the ECB is expected to raise rates by 25 basis points to 1.50%. Moreover, investors will be also eyeing Trichet’s press conference later  on Thursday, where traders will be watching closely for any hints regarding the outlook for European monetary policy, while data from the labor market will also play a key role in trading, especially the ADP employment change figure ahead of Friday’s infamous jobs report. Stocks in Asia were mixed by closing on Thursday, where the NIKKEI 225 was down by nearly 0.11% to close around 10071, while the Hang Seng index closed higher by 0.06% to trade around 22530. European stock indexes were mostly higher before by...