Political Crisis Threatens Credibility Portugal Finance

Of Zone Europe reported, the risk of a political crisis in Portugal seem to threaten 'financial credibility' government that has been built since the last 2 years through a number of austerity measures and economic reforms, according to European Commission President Jose Manuel Barroso said.  

A market reaction suggests that the risk is very clear that, the financial credibility that has been built by the Portuguese government could be threatened political instability at this time. and if this is really the case, would be very damaging to confidence in the Portuguese, especially because they have seen early signs of economic recovery.  

While another reported a statement, the European Parliament has passed a budget proposal the European Union (EU) in 2014 to 2020, after passing through a long debate between governments, parliaments and executives in the region.Political resolution proposed EU budget for the period of seven years, cut spending for the first time after being approved 474 votes, 193 against and 42 abstentions. 

Keep ECB Interest Rate, And Ready to Make Loans Marginal

The European Central Bank warned of Latvia, which is a candidate member of the European Zone area to keep long-term rates, where inflation is currently at a low level. 
In a progress report on economic and law, 2013, Latvia was in the path to the euro zone members. However, the ECB highlights the sustainability of inflation convergence.

This report will be a major focus at the European Parliament, and euro zone finance ministers decided on July 9, whether Latvia can join the single currency or not.If the decision is positive, Latvia will be a member of the euro zone into 18th on January 1, 2014, following neighboring Estonia joined in 2012. 

EU Urges France Pursue Targeted Economic Reform

European Commission President Jose Manuel Barroso said France should present a credible structural reform program, after new data showed Europe's second largest economy is slipping into recession. 
Barroso, who will meet with French President Francois Hollande in Brussels, said that, as directed by the European Union (EU) France to pursue reforms two years to bring the budget deficit down to 3 percent of economic output as promised. 

"The extension will be approved if the French present a credible reform program so that it can regain competitiveness," Barroso said, as quoted by Reuters on Wednesday (05/15/2013). 

Earlier, the French parliament passed the state labor reform, as part of Hollande's efforts to convince the European partners that it is committed to economic reform. 

Dollar Strengthens, Effects Of, The Fed Strategy

Wall Street Journal report indicates that the Federal Reserve has mapped out a strategy to reduce the bond purchase program. And it certainly has helped the U.S. currency to strengthen. 

Developments in recent U.S. jobs data, have shown hope for an end to the weakening of the U.S. economy due to employment data. 

While the United States trade exchange returning slick performance recorded last week. The third main index gain success plucking for three consecutive weeks due to large buying interest from market participants. Rally likely to get longer because of some important data releases ready to go out in the next five days. 

Greece's economy is estimated that Will Grow Back

Earlier this week, the Euro slipped to 3rd straight session versus the U.S. dollar after a European Central Bank policy makers, Ignazio Visco, said that the central bank may choose to apply a negative deposit rates.Citing MarketWatch, Monday (13/05/2013) in the news, the application of a negative deposit rate will require banks to park ECB funds in reserve to pay the costs. While the decline in yield on 3-year Italian bonds to the lowest level since January still seems to be failing to help the performance of the Euro. 

Strengthening of the U.S. Dollar across the board, which was triggered by the April retail sales data are solid, also complicates efforts to back Euro traded in positive territory.While, after 6 years stuck in a phase of recession, Greece's economy is predicted to grow again in 2014. 
 This country does not have a right to access international credit markets as usual, but the performance of the banking sector began to improve and it is believed will turn profitable in the near future.

Optimistic Markets With U.S. Economy

The market looks optimistic with the U.S. economy bounced back on Friday after U.S. jobs data the results are better than analysts expected, while the euro was struggling after more evidence that the economy in the euro zone fell. 

 Expectations that the Federal Reserve will probably start reducing asset purchases under its quantitative easing program resurfaced after the release of the jobs numbers on Friday, according to MarketWatch reported, Monday (05/06/2013) 

The yen is also expected to weaken in the coming weeks after the Bank of Japan pledged to inject around $ 1.4 Trillium funds into the economy.Reporting from Industry Week and Sindonews, the U.S. Commerce Department said gross domestic product growth forecast (GDP) in the first quarter was a strong rebound from the poor rate 0.4 percent in the previous quarter. However, that figure came in below the average forecast of analysts of 2.8 percent.

Sustaining Interest Rate Speculation ECB Euro, Eurozone Still Poor Performance

The euro traded higher versus the U.S. dollar amid speculation that the European Central Bank will act to stimulate the economy in the 17-state region. 

Official data on Tuesday (30/4) showed that inflation in the euro zone has fallen to the lowest level in three years, and unemployment reached a new record, which will raise expectations lowered interest rates by the European Central Bank (ECB) in order to revive the economy that has been stagnant .A series of disappointing euro zone data, it has increase the odds of the ECB to cut interest rates in the next policy meeting May 2. 

Bureau of Statistics European Union (Eurostat) Indicates that, inflation in the euro zone slumped to 1.2 percent in April, the worst level since February 2010, and is the biggest monthly drop in more than four years. It was as if reflecting the danger of economic recession. With the rising cost of living, inflation rate was well below the estimated ECB, still just under 2 percent. While economists projected inflation would be at the level of 1.6 percent for the month.

U.S. Consumer Spending Levels, Natural Increase

Of the United States reported, the level of consumer spending in the U.S. unexpectedly rose in March as low inflation supports the purchasing power of domestic consumers, a good signal for the economy lost momentum towards the end of the first quarter.
 
As reported by MarketWatch, Monday (29/04/2013) The U.S. Commerce Department on Monday said consumer spending increased by 0.2% last month following a revised increase of 0.7% in February.
Economists expect consumer spending which covers about 70% of economic activity flat last month. After penyesuasian for inflation, spending rose 0.3% after rising by the same amount in the month of February.
 
This report strengthens the hope that the growth rate in the second quarter may not be later had feared this moment. Bertumbuhan economy with an annual rate of 2.5% in the first quarter of this year. Output in the first quarter driven by a 3.2% increase in consumer spending, although the payroll tax cut of 2% which ended in January.

Euro Weakens Could Accomplish If the ECB Policy

Of the European Union Dilaorkan, bond purchase policy states troubled by the European Central Bank (ECB) has drawn criticism from German monetary authorities. Outright Monetary Transactions program (OMT), which was launched last September was considered tarnished the central bank's independence. 

As reported by the German media, Handelsblatt, Germany's central bank does not agree with the policy formula in OMT. In the thick 29 page report prepared for the Constitutional Court, the Bundesbank warned of a decline in ECB image in the eyes of the world because it is too busy with private areas of a country.The ECB will hold a meeting this week. The initial reaction to the ECB forex market depends on the nature of the policy mix that the central bank will spend this week.

ECB Ready to Lower Interest Rates

ECB Ready to Lower Interest Rates, Monetary Policy Not Drugs Economic Disease

The euro weakened against the Japanese yen, after expectations the European Central Bank (ECB), which is expected to cut interest rates at its monetary policy meeting next week.

EUR / JPY fell by 0.12% to the 129.35, the high price of 129.90.

As reported, the European Central Bank denies the assumption that mentions that the program budget cuts in some Euro countries failed to meet expectations. According to the ECB Executive Board member, Joerg Asmussen, a fiscal consolidation strategy to achieve long-term financial balance of the post and not the current crisis solution. 
The ECB considers that the effects of interest rate cuts to troubled countries will be very limited. This is where the role of fiscal consolidation is needed so that the central bank's policies supportive not be in vain.

Asmussen considers the application of interest rates too low for a long time also have negative consequences, such as reducing the incentives for a government and banks to adjust the interest rate climate.Based on various comments of the high officials, the ECB signaled not to replicate what has been done by the central banks in developed countries, especially in terms of launching the stimulus.

Dollar And Yen strengthened

Exchange rate dollar and the yen strengthened, after weak data in the zone euro and the slowdown in China triggered concerns about the health of the global economy. 
Euro under pressure after surveys Markit showed activity of the private sector in the block euro remains in contraction in April. Figures for Germany, the largest economy in Europe, fell for the first time since November. 
'Recession deep zone euro which continues to be dragged exchange, when it was triggered speculation to support monetary supplements, "said David Song analysts currency at DailyFX. 
Sentiment was bearish around currency sole may gather pace in the short and medium term, as we anticipate the Bank Central Europe to push interest rates mold to level record low in the coming months.

Kathy Lien from BK Asset Management says the latest figures Europe add signs new with reduced growth. 

EU Avoid Housing Bubble, Interest Rate haunt Euro

EU negotiators can resolve diekspektasikan general rule first on mortgage loans on Monday, in order to attempt to avoid a repeat of the property bubble that sparked the euro zone debt crisis.
As reported analisadaily, Tuesday (03/23/2013), legislation that would force European lenders that have channeled funds worth 6.5 trillion euros ($ 8.5 trillion) foray into the mortgage market to check the credit worthiness of potential customers and their ability to pay, which effectively prohibit individual certification or loan bulging.This rule will also prohibit or those who execute mengillegalkan credit checks by banks and other lenders who associated wages mortgage amount they approve.
If an agreement is reached, the draft rules will need to be stamped by the full parliament and EU governments before entering berlakuknya period in mid-2015.Home loans are not responsible in the United States created a housing credit bubble that triggered the domestic global financial crisis.

About the IMF reforms, Brazil Criticizes Europe and the U.S.

Brazilian Finance Minister Guido Mantega, denounced the United States and Europe because of stalling reforms that would reduce their role in the International Monetary Fund. 
As quoted by the news agency on Saturday (20/03/2013), in a statement to the Fund on behalf of 11 member countries, Mantega said the reform of the European and U.S. dominance over the ownership of shares and voting rights at the IMF has been repeatedly delayed, preventing balancing would allow developing countries have a greater voice, AFP reported.

'Reform of the IMF may be the nadir. Targeted time has failed to be met, delays and delays have become routine, "Mantega said. 
2010 program does not run because it requires the support of the United States, where Congress continues to refuse ratification.

And the next quota review, which will be completed in January 2014, was also delayed due to 'resistance to change on the part of over-representation of European countries, "Mantega said.

In the G20, U.S. Currency Competition Policy Press

The United States will push economic strength member Group of 20 (G20) to avoid other "competing currency policy 'during the G20 meeting this week, U.S. Treasury Secretary Jacob Lew said Wednesday. 
'We will continue to press the G20 countries to avoid policy spiral' beggar thy neighbor ',' Lew said in a speech at a university in Washington, according to the prepared text.

Policy of 'beggar thy neighbor' is the economic policy of a country that is applied to fix the economic problems in a way that tends to exacerbate the economic problems of other countries. 
One of the policy of 'beggar thy neighbor' who lately tend to do some states in the face of the economic crisis is 'Competitive Devaluation' (competitive devaluation), which measures the currency devalued that aims to improve the competitiveness of its exports.

'It is essential that all G20 countries to follow up their recent commitment not to target the exchange rate for competitive purposes, "Lew added. 

Target Italian increase Minimum of 10% Debt Letter

From Italy reported that Italy raised the target issuing debt to nearly 10 percent this year, and hopes to capitalize on the demand from Asian investors use to achieve that purpose.In an interview, Head of Debt Management Italy, Maria Cannata says treasury has increased the gross funding target for 2013 of just over 450 billion euros ($ 589 billion) from the previous arrangement that is 415 billion euros.

New estimates will be adjusted to meet the country after finishing his promise to pay back 40 billion euros in arrears to private enterprises that lack of money in 2013-2014.It takes into account the budget deficit deteriorate due to the longest recession in Italy for two decades.

"We will distribute the additional publication of all letters evenly on the debt," Cannata said, adding that the action will have influence on policy treasurer who seek to extend the average maturity of debt Italy. In 2012, cash funding according to 465 billion euro target.

European Zone Economic Progress Record

Euro zone with its own policies, already made ​​progress on economic, European officials said in Washington this week to defend their handling of the debt crisis.Ignore the euro zone as the U.S. central bank stimulus measures (the Fed) and currency inflation campaign conducted by the Bank of Japan, European economic leaders say they are on the right track in supporting the 17-nation euro zone, despite the evidence must take some time to "filter".

'Euro area is increasingly making progress in implementing the strategy of a comprehensive response to the crisis,' is to be said by the officials of the European Union (EU) finance ministers for Group of 20 (G20) this week, this should suit their draft statement obtained EU at a meeting in Dublin two days ago.

European Zone target achieved moderate recovery until mid-2013 and strengthened in the second half of 2013 and in 2014. 
The statement may not be so trustworthy on economic policy meeting in Washington from Thursday. U.S. Treasury Jacob J. Lew last week suggested launching an offensive sort of European growth, and Managing Director of the International Monetary Fund (IMF) Christine Lagarde warned the global economy with a 'three-step acceleration'.

Eurozone Extend Maturity Bailout For Portugal-Ireland

The EU finance ministers are discussing ways to boost growth and create jobs.As reported by the Washington Post, Saturday (13/04/2013), this step they are doing in the middle of the economy stagnant and unemployment is at a high level.In a meeting in Dublin Castle, Ireland's Finance Minister Michael Noonan said the ministers will focus on unemployment among the young. This is because the number of unemployed youth in several European countries reached 50 percent.
Ireland which currently holds the presidency for six months in the EU, the leader of the meeting. Noonan said the finance ministers will also discuss ways to unlock access to financing for businesses in the market rather than bank.
It is important, he added, because many small and medium enterprises in the EU have access to capital.While Analisadaily, Monday (04/15/2013) The euro zone finance ministers have agreed to provide an additional seven years for Ireland and Portugal to pay back bailout loans them. It was reported by the group leader Jeroen Dijsselbloem on Friday (12/4).

The Fed Releases Minutes earlier than usual

Reported from the U.S., the Fed released its policy meeting minutes earlier than previously scheduled after the leaks reports. Several copies of this report have been sent to several rumored trade group said on Tuesday. 
The members of the U.S. Federal Reserve's policy committee still shows some differences pendangan about the duration of the asset purchase program (QE), based on the minutes of the policy meeting March 19 to 20 has just been released. 
President Barack Obama proposed spending plan of $ 3.77 trillion in Congress today that will include the reduction in social security and Medicare in an effort to revive the deficit reduction negotiations. 
Obama's budget for fiscal year 2014 will also include $ 50 billion for roads, bridges and many other public works, $ 1 billion for manufacturing innovation and trigger $ 1 billion to stimulate higher levels of education. 

Fed chairman Ben Bernanke said

Bank stress tests conducted by the central bank on a regular basis actually makes much more stable bank in which the financial system to be much more resilient.Contrast with the state of today's banks against their conditions of uncertainty in 2009 after the historic financial crisis, Bernanke said that the banking sector rebounded quite positive for the broader recovery in the credit prominence in economic growth. 
In a speech that is not directly touched on economic developments and monetary policy, Bernanke signaled the central bank causes continue to pursue easy monetary policy.

"The economy is so much stronger than four years ago, although the condition is obviously still far from being what we all want," he said.

Forex News EUR / USD this week

This week, EUR is expected to Bullish. 
The things that cause bullish EURUSD is as follows: 
First, despite the huge drop in the EU since the last ECB meeting but the ECB does not make the movement of "easing" the new date. While the Fed and now Japan, both involved in the operation of large-scale stimulus. Differences in the central bank's policy will only provide support for the EUR over the coming week. 
Second, the report disappointing U.S. jobs, which this month only 88000 new jobs generated from the target of 200,000. This reaffirms the Fed doubts about the speed and strength of the U.S. economic recovery and the policies that are now being embraced.

But the rally from EURUSD will encounter selling pressure due to the following matters:
First, according to ECB President Draghi, the recovery so far, which is expected for the second half of the year depending on the risk reduction and data entry will look closely at. At the same time he stressed that the ECB is ready to act if needed.