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Cyprus weighs on euro, U.S. data lifts shares

March 27, 2013 By Leave a Comment

Cyprus weighs on euro, U.S. data lifts shares

() – The euro fell to a four-month low against the dollar and bonds climbed to their highest in three weeks on Wednesday, as the implications of the Cyprus bank bailout deal weighed on sentiment.

Cyprus is expected to complete capital on Wednesday to prevent a run on banks by after the country agreed a bailout deal that will wipe out some senior bank and impose losses on large depositors.

The worry among investors and economists is that despite attempts by officials to quash the idea, the plan could become a blueprint for any future bailout in the troubled currency bloc.

As trading gathered pace in Europe the concerns pulled the euro to a four-month low of $1.28175.

German government Bund futures, an asset that investors value in times of increased tension, rose 15 ticks to their highest since March 7.

“Ongoing uncertainty about Cyprus is keeping interest in German government bonds high,” analysts at Helaba Landesbank Hessen-Thueringen said in a note.

U.S. data published on Tuesday, which signaled the world’s largest economy remains in recovery mode, helped offset the euro zone jitters to lift European stock markets.

Separate reports showed that demand for durable U.S. manufactured goods surged in February, while U.S. single-family home prices started the year with the biggest annual increase since June 2006.

Top European shares on the FTSEurofirst 300 .FTEU3 rose 0.3 percent, with London’s 100 ., Paris’s CAC-40 .FCHI and Frankfurt’s DAX . all opening around 0.2 percent higher.

Asian shares had also seen modest gains, leaving MSCI’s index of , which tracks 6000 stocks in 45 countries, up 0.1 percent on the day.

“The current situation with the macro environment remains strong … Notwithstanding any other macro risks that may become apparent due to fears of (euro zone debt) contagion … we see the uptrend in the market to continue,” said Atif Latif, director of trading at Guardian Stockbrokers.

(Addition reporting by Tricia Wright; Editing by Will Waterman; ?)

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European shares, euro dip on Cyprus concerns

March 19, 2013 By Leave a Comment

European shares, euro dip on Cyprus concerns

(Reuters) – The euro and fell for a second day on Tuesday as investors worried about the uncertainty over a bailout for Cyprus aimed at preventing a and banking collapse.

A said Cyprus’s parliament was likely to reject plans agreed by euro zone officials over the weekend to part-fund a 10 billion euro rescue of the island with a tax of between 6.75 and 9.9 percent on .

“All eyes will remain on Cyprus. Lots of uncertainty persists and most pressingly you don’t seem to have a majority in the parliament even if you do a partial redesign of the deposit levy,” said Tobias Blattner at Daiwa Securities.

“Marketwise if you fail to pass the bill it would be catastrophic to a certain extent because, in theory, at that moment you would be looking at a default and you are just not sure what would happen then.”

Euro zone ministers have urged Cyprus to let smaller savers escape the levy but if its parliament, which is due to convene at 1600 GMT, cannot agree a deal it would put the bailout in jeopardy and raise the threat of default.

The uncertainty saw the euro drop 0.2 percent as it remained near a three-month low and European shares .FTEU3 fell 0.4 percent in early trades as they extended Monday’s sell-off.

Downbeat car data also weighed on sentiment as figures from Association of European Car Manufacturers showed sales fell more than 10 percent last month having hit a 17-year low in January.

This year is shaping up to be another tough slog for manufactures across Europe, as consumers and firms in recessionary economies postpone big ticket purchases.

London’s 100 ., Paris’s CAC-40 . and Frankfurt’s . were down between 0.4 and 0.6 percent by 0815 GMT, while the concerns surrounding Cyprus meant German were again in demand as investors looked to traditional safe-haven assets.

The was last up 25 ticks on the day at 144.18 while Italian and Spanish bonds fell for a second session.

“We are just waiting for another headline out of Cyprus,” one trader said, adding that buying Bunds “is the only trade to have on.”

“It’s quite serious, it’s got bigger implications. I think there is (a risk) of some cross border contamination,” he added.

(Editing by Anna Willard)

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Euro, shares stall as investors turn cautious

January 28, 2013 By Leave a Comment

Euro, shares stall as investors turn cautious

(Reuters) – Rallies in European shares and the stalled on Monday after strong gains last week as investors awaited confirmation that financial market conditions and the outlook for the euro area have improved.

rose strongly on Friday after data showed would repay more than expected of the they borrowed from the European Central Bank (ECB) and that in Germany was improving sharply.

A solid start to the corporate has also helped send many equity indexes to pre-financial crisis highs, with the Standard & Poor’s 500 index closing last week at its highest level in over five years.

In the equity markets Europe’s FTSEurofirst 300 index .FTEU3 shed 0.1 percent in early trade to 1,173.87 points, leveling off near its highest level for almost two years, though traders said there was still strong underlying demand.

“All European benchmarks are at their 2012-2013 highs. Every time there’s even a slight pull-back, the buying pressure comes in,” Aurel BGC chartist Gerard Sagnier said.

The market’s cautious mood on Monday also followed a weaker session in Asia, where falls in technology companies saw the MSCI’s broadest index of Asia-Pacific shares outside Japan .MIAPJ0000PUS drop 0.4 percent.

The euro held near an 11-month high against the dollar $1.3440

Meanwhile, German futures, a key gauge of investor sentiment, continued to ease, slipping a further 7 ticks to 142.40 FGBLc1 on Monday, and gold is languishing near a two-week low as hopes for an worldwide dampen the metal’s appeal as a .

Investors are keenly awaiting the ECB’s monthly data on bank lending to companies and consumers, due later, for confirmation that growth is returning to the economy. Italy will also provide a test of investor sentiment when it auctions almost 7 billion euros ($9.4 billion) of 2-year and 5-year bonds.

However, the main focus for investors this week will be on the U.S., where the ’s Open Market Committee meets on Tuesday and Wednesday, and where the nonfarm payrolls report is due out on Friday.

Oil prices were being held in check by the events coming up in the U.S., with Brent crude unchanged at $113.28 a barrel, while U.S. crude rose 17 cents to $96.05 after seven straight weekly gains – the longest such streak since early 2009.

($1 = 0.7421 euros)

(Reporting by Richard Hubbard; Editing by Will Waterman)

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Business: Stock futures signal losses; all eyes on Apple

January 24, 2013 By Leave a Comment

Business: Stock futures signal losses; all eyes on Apple

() – pointed to a lower open on Wall Street on Thursday, with futures for the S&P 500 down 0.22 percent, futures up 0.02 percent and futures down 1.3 percent at 1014 GMT.

Shares of Apple Inc (.O) will be in the spotlight after the world’s biggest tech company missed Wall Street’s revenue forecast for the third straight quarter after iPhone sales came in below expectations, fanning fears that its dominance of consumer electronics is slipping.

Shares of the company traded in Frankfurt (AAPL.F) were down 8 percent early. They sank 10 percent to $463 in after-hours trade on Wall Street on Wednesday night, wiping out some $50 billion of its market value – nearly equivalent to that of Hewlett-Packard (HPQ.N) and Dell (DELL.O) combined.

A U.S. trade panel that specializes in patent disputes will review a potentially key decision in the patent fight between Samsung Electronics (005930.KS) and Apple Inc (AAPL.O) over smartphones and tablets.

were mostly flat in morning trade, as bullish economic data out of China offset Apple’s weaker-than-expected figures which fanned earnings worries in the technology sector. .EU

Noble Corp (NE.N), owner of the world’s third-largest offshore drilling fleet, reported on Wednesday a lower-than-expected quarterly profit as it struggled with maintenance for five high-end rigs, even as demand for its most capable units increased.

Raymond James Financial Inc (RJF.N) said quarterly profit rose 27.6 percent, boosted by strong performance from its brokerage and capital markets divisions.

Investors in U.S.-based mutual funds pumped $9.32 billion into stock funds in the week ended January 16, the of inflows for such funds, data from the Investment Company Institute showed on Wednesday.

Hard disk drive maker Western Digital Corp’s (WDC.O) second-quarter results beat analysts’ expectations, helped by growth in its enterprise segment. Shipment in the enterprise segment rose about 10 percent from first-quarter levels to 6.63 million units, analyst Nehal Chokshi of Technology Insights Research told Reuters.

Japanese regulators have joined their U.S. counterparts in all but ruling out overcharged batteries as the cause of recent fires on the Boeing Co (BA.N) 787 Dreamliner, which has been grounded for a week with no end in sight.

Amgen Inc (AMGN.O) on Wednesday projected revenue for 2013 that exceeds Wall Street estimates and said it was on track to deliver on its 2015 forecasts well ahead of schedule.

Pamplona Capital Management, holder of 9.3 percent of Nabors Industries Ltd (NBR.N), has become “increasingly concerned” about the underperformance of the drilling rig contractor’s shares, according to a regulatory filing on Wednesday.

Symantec Corp (SYMC.O) plans to slash its management ranks and reorganize into 10 business areas, but has decided not to sell off major assets after a strategic review by its new early this month.

SanDisk Corp’s (SNDK.O) modest revenue outlook disappointed investors looking for a rebound in memory chips widely used in smartphones and tablets, sending its shares lower.

Netflix Inc (NFLX.O) surprised Wall Street on Wednesday with a quarterly profit after the video subscription service added nearly 4 million customers in the United States and abroad, sending its shares 35 percent higher in after-hours trading.

Among the companies set to report results on Thursday feature Bristol-Myers Squibb (BMY.N), Lockheed Martin (LMT.N), 3M Company (MMM.N), Microsoft (MSFT.O), Raytheon (RTN.N), Starbucks (SBUX.O), AT&T Inc. (T.N), and Xerox Corp. (XRX.N).

On the macro front, investors awaited weekly jobless claims, at 1330 GMT, Markit Manufacturing PMI for January, due at 1358 GMT, and December leading economic indicators, due at 1500 GMT.

The S&P 500 rose for a sixth day on Wednesday after stronger-than-expected profits from IBM IMB.N and Google (GOOG.O) but the rally could be halted as Apple’s after-hours miss sent its shares lower.

The Dow Jones industrial average .DJI rose 67.12 points or 0.49 percent, to 13,779.33, the S&P 500 .SPX gained 2.25 points or 0.15 percent, to 1,494.81, and the Nasdaq Composite .IXIC added 10.49 points or 0.33 percent, to 3,153.67.

(Reporting by Blaise Robinson)

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Stock futures up on sustained hopes for “fiscal cliff” deal

December 18, 2012 By Leave a Comment

Stock futures up on sustained hopes for fiscal cliff deal

() – rose on Tuesday, indicating equities could extend a rally that took them nearly two-months highs on growing optimism over a “fiscal cliff” deal.

* Stocks have struggled for direction in recent weeks, with investors reluctant to make big bets in the face of uncertainty over the cliff, a combination of steep tax hikes and spending cuts that could hurt the U.S. economy if they take effect next year. Moves have been muted over the past weeks, with volume anemic.

* Hopes for a deal grew on Monday night as President made a counter-offer to Republicans that included a major change in position on tax hikes for the wealthy, according to a source familiar with the talks.

* That report followed a meeting between Obama and Republican , who has edged closer to Obama’s position by proposing to extend lower tax rates for everyone who earns less than $1 million.

* S&P 500 futures rose 5.5 points and were above fair value, a formula that evaluates pricing by taking into account interest rates, dividends and time to expiration on the contract. industrial average futures added 30 points and Nasdaq 100 futures rose 14 points.

* Many investors fear that going over the fiscal cliff could push the U.S. economy back into recession, an outcome that would also pressure global growth rates and sap demand for commodities.

* .FTEU3 rose 0.3 percent on Monday, while January crude futures were up 0.6 percent. The of .MIWD00000PUS rose 0.2 percent.

* While the cliff has been the primary driver for markets, tech shares will also be in view as (ORCL.O) reports results after the market closes. The company is seen posting profit growth of more than 10 percent, but a 2.3 percent dip in revenue, according to Thomson Reuters data.

* Reporting quarterly results , Sanderson Farms Inc (SAFM.O) posted a better-than-expected profit, helped by rising poultry prices. Jefferies Group (JEF.N) is on tap to report later in the day.

* The New York Times late Monday reported that Wal-Mart Stores Inc’s (WMT.N) Mexican affiliate routinely used bribes to open stores in desirable locations. The story cited 19 instances of the retail giant paying off local officials. In a statement Monday night, Wal-Mart spokesman David Tovar said the company was already looking into the allegations

* U.S. third-quarter current account deficit figures are due to be released at 8:30 a.m. (1330 GMT). Economists in a Reuters survey forecast a $103.4 billion deficit versus a deficit of $117.4 billion in Q2.

* Hopes for a fiscal cliff deal also lifted shares on Monday, breaking a two-day decline for the S&P. The Dow and Nasdaq surged more than 1 percent in Monday’s session, while all 10 S&P 500 sectors ended higher.

(Editing by W Simon)

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Business: Global shares dip on U.S. fiscal cliff, Greece woes

November 12, 2012 By Leave a Comment

Business: Global shares dip on U.S. fiscal cliff, Greece woes

() – World shares edged down for a fourth day on Monday as concerns about a potential U.S. and Greece’s bailout dented optimism over global growth.

Adding to the uncertainty, Japan reported that its economy shrank 0.9 percent in July-September from the previous quarter, pointing to a mild recession in the world’s third-largest economy.

“Investors remain consumed by U.S. fiscal cliff consequences, and this is capping market enthusiasm,” said Tim Waterer, senior trader at CMC Markets.

Since the U.S. elections, the investors have worried that the return of the status quo in Washington will make it difficult for lawmakers to reach the compromises needed to avoid a “fiscal cliff” at the end of the year when nearly $600 billion worth of spending cuts and tax increases kick in.

The world .MIWD00000PUS, which was down 0.1 percent at 322.80 points on Monday, has lost about 2 percent since President Barack Obama’s re-election and the retained its majority in the House of Representatives.

were little changed.

Export data out of China suggesting that seven straight quarters of slowing growth may have ended provided some support however, the positive data was offset by weak bank loan figures.

The FTSEurofirst 300 index .FTEU3 of top European shares was steady at 1,096.85 points, having dropped 1.6 percent last week. London’s .FTSE, Paris’s CAC-40 .FCHI and Frankfurt’s .GDAXI traded between 0.2 percent up and 0.1 percent lower. .L .EU

U.S. stock index futures pointed to a similarly mixed open on Wall Street, with futures for the S&P 500 up 0.15 percent, Dow Jones futures up 0.03 percent and Nasdaq 100 futures down 0.1 percent.

GREECE STALLS

A green light for the Greek government’s 2013 budget from the parliament in Athens on Sunday had little impact on the euro, which hovered at $1.2705 to the dollar and is not far from the two-month low of $1.2690 hit on Friday.

The budget vote, and another on an austerity package last week were conditions for unlocking the next tranche of aid from Greece’s international bailout.

Markets are looking ahead to a euro zone finance ministers’ meeting later in the day for signs the money will be released.

The pressure for a deal on Greece is growing because Athens has to redeem 5 billion euros ($6.35 billion)worth of treasury bills this week and had been counting on cash from the next aid tranche to help cover that.

Germany’s Finance Minister Wolfgang Schaeuble said at the weekend that the troika of had not yet finished its report on the bailout programme.

“I think we’ve seen too many finance ministers’ meetings over the course of the last two or three years to have any great expectations,” Peter Dixon, global equities economist at Commerzbank, said.

The uncertainty over the Greek aid talks and the U.S. fiscal worries supported bonds, with German 10-year yields steady at 1.34 percent.

European credit markets were also fairly flat with the iTraxx main index, made up of 125 investment-grade bonds, 0.5 basis points wider at 132 basis points.

U.S. bond markets were closed on Monday for the Veteran’s Day public holiday.

Commodities were mixed, with Brent oil trading around $109 per barrel and U.S. crude sliding under $86 a barrel, while gold edged up to $1,734 an ounce, near a three-week high of $1,738.

$1 = 0.7868 euros)

(Editing by Will Waterman and Anna Willard)

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Business: Global shares rise, dollar at seven-week high before U.S. payrolls

November 2, 2012 By Leave a Comment

1e876af4d427b40857fa8cd7bace81f4 Business: Global shares rise, dollar at seven week high before U.S. payrolls

(Reuters) – World shares were steady near two-week highs and the dollar at a seven-week high ahead of U.S. jobs data that will provide the last major signal on the state of the world’s leading economy before its voters pick a president on Tuesday.

Expectations for a strong reading from U.S. non-farm payrolls due at 1230 GMT have been bolstered by a better-than-expected ADP report and ISM manufacturing index reading on Thursday.

By mid-morning, the FTSEurofirst 300 index of top .FTEU3 was up 0.2 percent at 1111.90, its highest since October 22, helping keep the of world shares steady .MIWD00000PUS at 332.0.

“The ADP figures were quite good,” said Peter Garnry, equity strategist at Saxo Bank. “If the non-farm payrolls are better than expected, I think it could be a catalyst for the market to continue the momentum from yesterday going into the weekend.”

Weak manufacturing data from Germany, France, Spain and Italy underscored the euro zone’s troubles, however, and helped drive the euro to a three-week low against the dollar, which was at its strongest level for seven weeks.

Euro zone manufacturing has now contracted for 15 months running.

“All in all, the picture for the euro area economy remains extremely sluggish,” said Newedge Strategy economist Annalisa Piazza, said of the data.

futures rose, testing the top of their recent range, but many investors shied away from taking large positions before the U.S. jobs data and with Greece again facing crisis.

Greece’s deepening recession has put public finances under increasing strain and are struggling to reach an agreement with Athens over how to provide more urgently needed bailout cash.

A parliamentary vote next week on 13.5 billion euros of contested austerity measures is key to negotiations, with the outcome increasingly uncertain.

PAYROLLS DATA

The payrolls data is expected to show U.S. employers added 125,000 jobs in October, pushing the jobless rate up to 7.9 percent from September’s 7.8 percent.

With polls ahead of the November 6 election showing President neck-and-neck with Republican challenger Mitt Romney, news on the economy, good or bad, could be decisive.

“The unemployment rate has become extra interesting this time because of the impact it could have on the U.S. election,” said Rabobank economist Philip Marey.

“Obama benefited from the drop last time, but if it rebounds back to 7.9 he will have to do some explaining, and it will give Romney some firepower going in to the final run-in.”

U.S. pointed to a slightly lower open on Wall Street, with futures for the S&P 500 and indexes both down by 0.1 percent, while futures were flat.

Gold was heading for its fourth straight week of losses as it edged down towards $1,700 an ounce. Brent crude oil fell 31 cents to $107.86, with Europe’s problems supporting the view that demand for fuel in developed economies will remain subdued.

“If the nonfarm payrolls data are very good, it will be bearish for gold, as it will cut expectations for any additional quantitative easing,” said Nick Trevethan, a senior commodity strategist at ANZ in Singapore.

In Asia, recent data showing a pick-up in Chinese factory activity gave Hong Kong and Shanghai stock markets their best week in over a month, while the risk-sensitive Australian dollar rose to a five-week high of $1.0420.

“Downside risks are lessening,” said Toru Yamamoto, chief strategist at Daiwa Securities.

(Additional reporting by Toni Vorobyova; Editing by Will Waterman)

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Business: European shares steady as China data eases growth worries

October 18, 2012 By Leave a Comment

4e5361dd65b468483b7b2ae94395b0bd Business: European shares steady as China data eases growth worries

() – European shares were steady near a one-month high and Asian stocks surged on Thursday, as a slew of Chinese data boosted optimism over the health of the .

The signs of a steadier footing in China’s economy coupled with recent good news from the United States on jobs have reassured investors that actions taken by the world’s major to boost activity are taking effect.

“There’s definitely been a shift in investor sentiment towards the positive,” said Richard Hunter, head of UK equities at Hargreaves Lansdown.

But the better mood was being held in check by worries about progress on measures to tackle Europe’s three-year old , as leaders from the 27-nation European Union gather in Brussels for a two-day summit.

The Eurofirst 300 .FTEU3 index of top European shares was barely changed at around 1119.15 points but was still holding close to its best levels in nearly a month.

The same was true of London’s .FTSE, the French CAC-40 .FCHI and Frankfurt’s DAX ., which were all stuck in narrow ranges near Wednesday’s closing levels.

European leaders will try to bridge deep differences over plans for a banking union at their summit on Thursday, but no substantial decisions are expected, while moves to help Spain, Greece and Cyprus may only come at a finance ministers’ meeting next month, officials have told Reuters.

Spain remains the most immediate focus of concerns, with the market expecting it to formally ask for assistance from the European Union very shortly, clearing the way for the region’ bank to begin buying its bonds.

The euro was slightly lower ahead of the summit at $1.3095, having risen to $1.3140 on Wednesday, a level not seen since mid-September.

“We are expecting some more upside in the euro as investors seem to get comfortable with the timeline about when Spain will seek a and the ’s bond buying will be triggered,” said Beat Siegenthaler, at UBS.

The expectation that help for Spain is not far away underpinned demand for Spanish debt, already boosted by Moody’s decision on Tuesday to affirm the country’s investment grade credit rating, at an auction on Thursday of 4.6 billion euros of fresh debt.

CHINA RELIEF

Meanwhile, growth and commodity-sensitive assets were seeing good gains on the latest batch of Chinese figures.

China’s third-quarter gross domestic product grew 7.4 percent from a year earlier, the slowest pace since the first quarter of 2009 but in line with expectations, while other data such as a 9.2 percent rise in industrial output for September exceeded forecasts.

The Australian dollar, which is highly correlated to China’s economic performance, touched a two-week high of $1.0397 after the data, and last traded at $1.0380.

“The data for September suggests China’s economy likely bottomed in July-August and is set to recover, and this will help ease fears about further downside risks to the Chinese economy,” said Hirokazu Yuihama, a senior strategist at Daiwa Securities.

“There aren’t clear signs that demand from China is picking up, but sentiment for commodities is improving, and this should eventually support growth-sensitive assets,” he said.

Even the dollar rose, touching a one-month high of 79.22 yen, after data on Wednesday showed the U.S. housing market improved sharply in September, leaving the Japanese currency to take the brunt of investor selling.

Among commodities, Brent crude oil was up about 10 cents a barrel at $113.32, with geopolitical worries in the Middle East supporting prices.

Spot gold was trading nearly flat at $1,750 an ounce as investors preferred to wait for the outcome of the EU summit.

(Additional reporting by Anirban Nag; Editing by Will Waterman)

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Business: Shares, oil dip as growth outlook darkens

October 3, 2012 By Leave a Comment

c8d15552e2949087a596bd1f138a4174 Business: Shares, oil dip as growth outlook darkens

() – and oil fell on Wednesday after weak data from China and Australia deepened concerns about the global economy, while the euro held steady as traders waited for Spain’s next move in solving its .

China’s giant economy looks set for a seventh quarter of slowing growth after an official survey pointed to a drop in and Australia’s August showed weaker demand for commodities exports.

The data sent the of Asia-Pacific shares outside Japan .MIAPJ0000PUS down 0.2 percent and saw the Eurofirst 300 index .FTEU3 of top European shares open around 0.3 percent lower at 1,098.30 points.

“The data out of Asia is quite negative and that is going to put pressure on all riskier assets,” said Ian Stannard, Head of European FX Strategy at

Brent crude oil fell 0.7 percent to just under $111 a barrel at $110.75.

Final estimates of activity in Europe’s services sector, due out later, are expected to add to the gloom. However, any reaction is likely to be curtailed ahead of the European Central Bank’s monthly monetary policy meeting, a Spanish debt auction on Thursday and the U.S. jobs report due on Friday.

The euro was little changed at around $1.29 as traders waited for the next developments in Spain after Prime Minister said on Tuesday a request for European aid was not imminent.

The comments by Rajoy and the signs of slowing growth, underpinned safe-haven German bonds, lifting the most active Bund futures contract 34 ticks to 141.77.

(Reporting by ; Editing by Anna Willard)

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Fed easing hopes lift shares, weigh on dollar

August 23, 2012 By Leave a Comment

f213d68f6a1df7699e1a3a41b928ae1f Fed easing hopes lift shares, weigh on dollar

() – Signals from the U.S. that another dose of stimulus measures could come “fairly soon” lifted global shares on Thursday and pushed the dollar to a two-month low, outweighing poor economic data from China and Europe.

.FTEU3, which are up over 15 percent since June and have been driving the steady 11.5 percent rise in , were up 0.16 percent at 0925 GMT. Indexes in London .FTSE, Frankfurt .DAX and Paris .FCHI were all higher.

U.S. pointed to a higher open on Wall Street, with futures for the S&P 500, the and the up 0.3 to 0.4 percent.

The euro, which has been boosted in recent weeks by hopes that a buying-led plan being drawn up by the European Central Bank will overcome the currency ’s debt troubles, was at a seven-week high against the dollar at $1.25726.

Adding to the swirl of speculation about the details of the ECB’s plans, central bank sources told Reuters on Thursday that the bank is considering targeting bond yield levels with its purchases, but without making the targets public.

The dollar sank to a two-month low versus a broader basket of currencies .DXY. Behind the move was the Federal Reserve’s signal on Wednesday that more policy easing is likely to be on the way, a move that will pump more dollars into the financial system.

Minutes from the U.S. central bank’s meeting earlier in the month said: “Many (Fed) members judged that additional monetary accommodation would likely be warranted fairly soon unless incoming information pointed to a substantial and sustainable strengthening in the pace of the .”

“The market seems more interested in more prospects of stimulus from the Fed than worries over the euro crisis. In the short term, the market could get back up to the highs which we’ve seen in the last few weeks,” said Darren Easton, director of trading at London-based Logic Investments.

The Purchasing Managers’ Index survey from Markit suggested that the euro zone was destined to return to recession, as the poll notched up a seventh month of contraction.

“In terms of where they are, this is consistent with contraction in euro area GDP,” said Jeavon Lolay, Global Economist, Lloyds Banking Group. “You could argue it was slightly better than expected, but there isn’t much to add.”

Germany confirmed its economy grew at 0.3 percent in the second quarter. Chinese manufacturing PMI data also hit their lowest levels since November as new export orders slumped and the stock of unsold goods rose.

TIME PRESSURE

Meetings between Greece and key euro zone leaders are set to continue, with Greece’s prime minister heading to Berlin to see German Chancellor Angela Merkel on Friday and French President Francois Hollande on Saturday.

Eurogroup chief Jean-Claude Juncker kept alive Greek hopes of winning more time, saying that the country was staring at its “last chance”. But German Finance Minister Wolfgang Schaeuble warned in a radio interview that more time was “not a solution to the problems”.

European bond markets were choppy as they headed towards midday. German futures were in demand, up 55 ticks, tracking the move in U.S. bonds.

The bloc’s troubled members were under fire, however, with Spanish and Italian borrowing costs both rising, with traders citing selling by domestic investors ahead of fresh auctions next week.

Fed stimulus hopes also helped oil markets shrug off the weak Chinese and European data, with Brent crude prices rising more than a dollar to breach $116 a barrel. Gold and silver hit their highest levels in more than three months.

“The Fed’s tone is totally different in the minutes from previous comments, and that helped gold,” said Chen Min, an analyst at Jinrui Futures in the southern Chinese city of Shenzhen.

(Reporting by Marc Jones; Editing by Will Waterman)

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