EUR/USD The euro has weathered the worst financial crisis since the Great Depression, bailouts of Greece, Ireland and Portugal, and falling interest rates. Now, investors are betting like never before that a Greek exit would be too much to keep the 17-nation currency above its long-term average.
Through most of the financial and political turmoil in Europe, the euro held above the average since its January 1999 start as investors put their faith in German Chancellor Angela Merkel to keep the monetary union in place. While they currently forecast little change in the euro versus the dollar, a majority of the world’s biggest foreign-exchange trading firms surveyed by Bloomberg News say the loss of even a weak member such as Greece would risk more departures and send the currency lower.
USD/CAD The Canadian dollar continued retreating against the soaring greenback, as European fears helped the USD and pushed oil prices lower. Retail sales are the highlight of this week. Canadian manufacturing sales soared in March amid an unexpected 1.9% boost in sales following a 0.2% contraction in February pulling the economy back on a growth track. This rebound came amid a rise in petroleum and coal products. With a strong labor market and a recovering manufacturing sector Canada has a lot to look forward to.
AUD/USD The Australian dollar continues to tumble, and has now dropped almost 6 six cents in the month of May. For anyone who loves extreme volatility in the markets, there’s no need to look elsewhere. Given the turbulence an uncertainty in Europe, investors will be favoring safe haven currencies, which spells more trouble for the free-falling aussie.
Commodities
Oil traded near the lowest close in more than six months in NYMEX after sliding for a 3rd week.
Crude for June delivery was at $91.63 a barrel, up 15 cents, or 0.2 percent, in electronic trading on the New York Mercantile Exchange at 8:19 a.m. in Singapore. It earlier fell as much as 0.7 percent.
Gold inched up on Monday to extend last week’s rise, tracking a steady euro after world leaders pledged to combat financial turmoil, although worries about Greece and the euro zone debt crisis remain.
Equities
Asian stocks rose, with the regional index rebounding from its biggest drop in six months, after Premier Wen Jiabao said China will focus more on bolstering economic growth. Gains were limited before German and French leaders meet today to discuss the euro as the Group of Eight exposed disagreement on a rescue strategy.
Japan’s Nikkei 225 Stock Average rose 4 percent.
European stocks G-8 leaders on May 19 urged Greece to stay within the euro area as polls in the country showed a close race between parties supporting and opposing the EU’s bailout deal. With the country preparing for a second ballot on June 17, renewed concerns about the currency area were fanned last week as Spain revised its 2011 deficit upward — even as its borrowing costs approached levels that prompted bailouts in Greece, Ireland and Portugal.
German Finance Minister Wolfgang Schaeuble will for the first time discuss the 17-nation currency at a meeting with his newly installed French counterpart, Pierre Moscovici, in Berlin today as European Union leaders prepare for a summit meeting in Brussels on May 23. After three shorter meetings in the last week, Chancellor Angela Merkel and French President Francois Hollande will seek to balance France’s desire to jump-start growth with Germany’s preference for spending cuts.
FTSE 100 index fell -1.33% to reach level of 5,268.00.
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U.S stocks Treasuries posted the longest streak of gains in more than 13 years, pushing 10-year yields close to a record low, as investors sought the safety of U.S. government securities while Europe’s debt crisis worsens.
U.S. debt rallied as Greece failed to form a government after elections May 6 gave no political party control of the legislature and as Moody’s Investors Service cut the credit ratings of 16 Spanish banks, citing economic weakness and the government’s mounting budget strain. The U.S. auctioned $13 billion of 10-year inflation-protected notes at a record negative yield and will sell $99 billion in notes next week.
Dow Jones Industrial Average slid -0.59% to reach the level of 12,369.
The S&P 500 fell -0.74% to reach the level of 1,295.00.
