Wall St slips Post Factory Orders Data. The majority of stocks on Wall Street traded lower earlier this week following the release of data on factory orders were weaker than expected. The lack of a catalyst in a Monday trade also made investors booked partial profits on stock rally recently. Having successfully closed last week trading above the psychological level of 14,000, the Dow Jones Industrial Average had dropped more than 100 points, led by shares of Chevron and Merck. S & P 500 and Nasdaq Composite also showed similar performance, with each lost 0.7% and 0.6%. All 10 key S & P sectors trading in the red zone.
From the fundamental side, the U.S. Commerce Department report showed factory orders rose by 1.8% in December. But the figure is still lower than the 2.2% growth expectations of economists. In addition, investor sentiment was also re overshadowed by anxiety over Europe as the uncertainty of the political situation in Spain and Italy. Spanish Prime Minister Mariano Rajoy and German Chancellor Angela Merkel is scheduled to meet ahead of EU summit this week. The focus of investors is also drawn to the announcement from the policy and the European Central Bank news conference Thursday.
Euro Hit Chaotic Politics
Euro knocked off 14-month highs versus the U.S. dollar amid growing political uncertainty in Spain and Italy. The push backward against the Spanish Prime Minister, Mariano Rajoy, growing stronger following allegations of corruption. While the latest polls show former Italian Prime Minister, Silvio Berlusconi, re-gaining support ahead of elections this month. Weak jobs data Spanish and euro zone investor sentiment index also helped weigh on the single currency. "Political uncertainty in the region has eroded the appeal of the single currency given the government in power appear difficulties in gathering the votes," said David Song, currency analyst at DailyFX in New York.
Political Uncertainty Spain Propped U.S. Dollar
The dollar rose against many major currencies, particularly the euro experienced a sharp correction from its highest level versus the U.S. currency and Japanese yen as Spanish political risks triggered profit-taking traders. Observed so far the U.S. dollar index rose 0.35% at the level of 79.41, after reaching an intraday highs in 79.54, and the lowest level at 79.17 daily. Political tensions are rising in Spain, where Prime Minister Mariano Rajoy along with most of the leaders of his party engaged in corruption that the country's opposition parties forced the resignation of Prime Spain. This incident triggered automatic turmoil Spanish bond yields and increasing demand for safe-haven currencies U.S. Dollar.
Fed : Expected to Increase Bank Lending Outlook for 2013
The U.S. bank estimates that credit quality will increase in 2013 after they facilitate standardization in the automotive and lending to businesses of all sizes, according to a survey from the Federal Reserve. "Banks are expected to improve credit quality in most major loan categories" in 2013, The central bank said today in a quarterly survey of senior officers the loan which was released in Washington. Estimated number of banks such that banks described "moderate to large." Business credit standards somewhat "in the loosen at all sizes of companies 'and banks' credit standards loosen up again for automotive," the Fed said in its report. Standards for mortgages and credit card loans were little changed, according to the survey. It raises the Fed's view that the economic decline during the fourth quarter is only temporary, and low interest rates will help speed recovery from liquid line of credit. The Fed said last week that the growth has been "paused", after it was reported that the economy shrank at an annual rate of 0.1 percent in the fourth quarter.
Ignore Sterling Construction Data UK
Sterling managed to rebound against the greenback despite Monday's data showed UK industrial construction output contracted last month. Analysts argue that if profit-taking on the recent Euro rally has helped Sterling to move away from a 5-month lows. However, the strengthening of Sterling remains vulnerable ahead of the data release of the dominant services sector PMI on Tuesday, which will give more clues about the economic performance of the UK in early 2013. "Cable (Sterling / Dollar) still vulnerable to weakening considering the invisibility of British economic growth, while the U.S. economy looks better," said Michael Derks, chief analyst FxPro, who predicted the British currency would fall to around $ 1.54 in 4-6 weeks front
Aussie Optimistic Ahead of the RBA Meeting
The Australian dollar appreciated versus the U.S. currency amid speculation that the Reserve Bank of Australia will maintain interest rates unchanged. Index interest rate swaps shows traders see only a 17% chance that the RBA will cut its benchmark interest rate to 2.75% percent at a meeting on Tuesday. Expectations will shrink Australia's trade deficit figures also helped provide a boost for the Aussie. "Strong economic growth and interest rates that do not change will be positive for the Aussie," said Hans Kunnen, chief economist at St. George Bank Ltd.. in Sydney. "RBA likely still will wait and see the impact of previous rate cuts. Levels of anxiety the central bank appears to have been reduced when compared with last year."
From the fundamental side, the U.S. Commerce Department report showed factory orders rose by 1.8% in December. But the figure is still lower than the 2.2% growth expectations of economists. In addition, investor sentiment was also re overshadowed by anxiety over Europe as the uncertainty of the political situation in Spain and Italy. Spanish Prime Minister Mariano Rajoy and German Chancellor Angela Merkel is scheduled to meet ahead of EU summit this week. The focus of investors is also drawn to the announcement from the policy and the European Central Bank news conference Thursday.
Euro Hit Chaotic Politics
Euro knocked off 14-month highs versus the U.S. dollar amid growing political uncertainty in Spain and Italy. The push backward against the Spanish Prime Minister, Mariano Rajoy, growing stronger following allegations of corruption. While the latest polls show former Italian Prime Minister, Silvio Berlusconi, re-gaining support ahead of elections this month. Weak jobs data Spanish and euro zone investor sentiment index also helped weigh on the single currency. "Political uncertainty in the region has eroded the appeal of the single currency given the government in power appear difficulties in gathering the votes," said David Song, currency analyst at DailyFX in New York.
Political Uncertainty Spain Propped U.S. Dollar
The dollar rose against many major currencies, particularly the euro experienced a sharp correction from its highest level versus the U.S. currency and Japanese yen as Spanish political risks triggered profit-taking traders. Observed so far the U.S. dollar index rose 0.35% at the level of 79.41, after reaching an intraday highs in 79.54, and the lowest level at 79.17 daily. Political tensions are rising in Spain, where Prime Minister Mariano Rajoy along with most of the leaders of his party engaged in corruption that the country's opposition parties forced the resignation of Prime Spain. This incident triggered automatic turmoil Spanish bond yields and increasing demand for safe-haven currencies U.S. Dollar.
Fed : Expected to Increase Bank Lending Outlook for 2013
The U.S. bank estimates that credit quality will increase in 2013 after they facilitate standardization in the automotive and lending to businesses of all sizes, according to a survey from the Federal Reserve. "Banks are expected to improve credit quality in most major loan categories" in 2013, The central bank said today in a quarterly survey of senior officers the loan which was released in Washington. Estimated number of banks such that banks described "moderate to large." Business credit standards somewhat "in the loosen at all sizes of companies 'and banks' credit standards loosen up again for automotive," the Fed said in its report. Standards for mortgages and credit card loans were little changed, according to the survey. It raises the Fed's view that the economic decline during the fourth quarter is only temporary, and low interest rates will help speed recovery from liquid line of credit. The Fed said last week that the growth has been "paused", after it was reported that the economy shrank at an annual rate of 0.1 percent in the fourth quarter.
Ignore Sterling Construction Data UK
Sterling managed to rebound against the greenback despite Monday's data showed UK industrial construction output contracted last month. Analysts argue that if profit-taking on the recent Euro rally has helped Sterling to move away from a 5-month lows. However, the strengthening of Sterling remains vulnerable ahead of the data release of the dominant services sector PMI on Tuesday, which will give more clues about the economic performance of the UK in early 2013. "Cable (Sterling / Dollar) still vulnerable to weakening considering the invisibility of British economic growth, while the U.S. economy looks better," said Michael Derks, chief analyst FxPro, who predicted the British currency would fall to around $ 1.54 in 4-6 weeks front
Aussie Optimistic Ahead of the RBA Meeting
The Australian dollar appreciated versus the U.S. currency amid speculation that the Reserve Bank of Australia will maintain interest rates unchanged. Index interest rate swaps shows traders see only a 17% chance that the RBA will cut its benchmark interest rate to 2.75% percent at a meeting on Tuesday. Expectations will shrink Australia's trade deficit figures also helped provide a boost for the Aussie. "Strong economic growth and interest rates that do not change will be positive for the Aussie," said Hans Kunnen, chief economist at St. George Bank Ltd.. in Sydney. "RBA likely still will wait and see the impact of previous rate cuts. Levels of anxiety the central bank appears to have been reduced when compared with last year."
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