European shares closed slightly lower Tuesday as poor manufacturing surveys and concerns Spain may need a full bailout weighed. U.S. Stocks quickly clawed back in the final hour of trading Tuesday but still ended lower, with the Dow logging its third-consecutive triple-digit loss, pressured by ongoing worries in the euro zone. Asian shares fell on Wednesday as soaring borrowing costs deepened worries Spain might need a bailout, while Greece’s finances appeared to fall short of terms conditional to its aid.
Japan’s Finance Ministry judged its record foreign-exchange intervention last year to have proved effective, while a newcomer to the central bank’s board said it may be able to do more to stabilize the currency.
The International Monetary Fund said China’s slowing economy faces significant downside risks and relies too much on investment, urging leaders to boost consumption and channel citizens’ savings away from housing.
Japan posted an unexpected trade surplus in June as lower oil prices contributed to the first drop in imports since December 2009.
German Finance Minister Wolfgang Schaeuble and his counterpart from Madrid said Spain’s borrowing costs don’t reflect the strength of its economy as they pledged to work toward deeper integration to fight the debt crisis.
Home values posted their first year- over-year increase since 2007 in the second quarter as the U.S. property market began to lift off a bottom.
German business confidence was the weakest since 2010, fueling concern the debt crisis is hurting the region’s economy. German business confidence probably fell for a third straight month in July to the lowest in more than two years as the worsening sovereign debt crisis damped the outlook for economic growth and company earnings
EURUSD (1.2072) The euro maintained the longest losing streak in two months versus the dollar before data that may show. As Spain and Greece continue to pull down the euro, Moody’s has downgraded the rating of the EFSF leaving the EU facing difficulties in borrowing money itself. Markets will react to this today.
The Great British Pound
GBPUSD (1.5511) The strong USD and the upcoming release of the half year GDP data is weighing down the currency. The pound continues to be weak against the USD.
Asian –Pacific Currency
USDJPY (78.13) This morning the Japanese trade balance reported a huge imbalance between exports and imports, although the balance improved in June, the recovery from the Tsunami and the need to import energy products has hurt the balance. The yen remains strong in risk aversion mode.
Gold (1582.95) Gold gained a few dollars in a choppy session. Gold spent most of the day bouncing between losses and gain until negative news hit Wall Street with some disappointing earnings and Moody’s downgrade of the EFSF, gold picked up a bit of momentum. There is nothing on the eco calendar to support gold today
Crude Oil (88.12) Global tensions eased along with demand, leaving little support for oil, although traders were sidetracked with the European disasters and hopes that today’s inventory report would show a 4th week of declines in stocks.