EU Morning Report

EU Finance Ministers meeting disappoints investors

  • The euro fell against its major counterparts at the start of the new week after the EU Finance Ministers weekend meeting disappointed investors. The meeting ended without major progress as no new measures were agreed to support the eurozone. Concerns of a Greek default continue to weigh on the single currency but Greece's Finance Minister Evangelos Venizelos rejected the view that its country will default. Greek Prime Minister George Papandreou cancelled his trip to the US as the Troika is expected to demand new austerity measures in order to receive the next tranche of funding. Against the US dollar, the euro dipped as low as 1.3753 from 1.3881. Versus the Japanese yen, the euro edged as low as 105.53 from 106.51.  
  • The US dollar advanced against a basket of currencies today on a heightened risk aversion in the market. Focus turns to the Federal Reserve two day policy meeting beginning on Tuesday and investors are expecting to see if new monetary easing measures will be announced. Against the Swiss franc, the dollar edged slightly higher to 0.8776 from 0.8647. Against the Japanese yen, the dollar jumped to 76.96 from 76.67. 
  • The Australian dollar edged higher against the dollar rising to 1.0397 from 1.0295 ahead of the Reserve Bank of Australia meeting minutes expected tomorrow. The British Pound ticked higher versus the dollar hitting 1.5840 from 1.5744 but it is vulnerable to losses on signs the Bank of England policymakers may decide on further monetary stimulus.
  • Oil prices slid today to 86.98 dollars a barrel from 89.78. Gold jumped to 1821.56 dollars an ounce from 1762.58. Silver also ticked higher today to 40.88 dollars an ounce from 39.36. 

Currencies to watch out for: EURUSD & USDJPY  

  • § The EURUSD pivot point is at 1.3775 with a preference to enter Short positions at 1.3765
  • § The USDJPY pivot point is at 76.75 with a preference to enter Long positions at 76.75
  • § The OIL pivot point is at 88.10 with a preference to enter Short positions at 88.10
  • § The Gold pivot point is at 1830 with a preference to enter Short positions at 1830                           

Today's calendar and market movers:

  • § US NAHB Housing Market Index in September is forecast to rise to 15 

Equity Markets:                                                

US equities were positive on Friday with the S&P500 trading up 0.57% and the DJIA up 0.66%. The European bourses were mixed with the FTSE trading up 0.58%, the DAX up 1.18% and the CAC down -0.48%. The NIKKEI and the HSI at the time of writing are trading up 2.25% and down -2.10% respectively.

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