EU Morning Report

Attention shifts to the FOMC minutes

  • The US dollar was under pressure against its major counterparts yesterday weighted by an improved risk appetite while world equities turned positive. Focus turns to the minutes from the August 9 policy meeting due out at 18:00 GMT. What is interesting to see is whether the minutes will hint further monetary easing at the next policy meeting on September 20-21. Also, Fed's Kocherlakota and Evans are scheduled to speak later today. Against the Japanese yen, the dollar edged higher to 77.01 today from 76.57. Against the Swiss franc, the greenback hit a five week high at 0.8240 from 0.8074.
  • The euro rose yesterday trading near a two month high against the dollar supported by a heightened risk appetite in the market. Yesterday, two of Greece's largest banks Alpha Bank and Eurobank announced they would merge boosting sentiment over Greece's banking system. The pair rallied to 1.4548 from 1.4465 and it was last trading at 1.4531. Versus the Swiss franc, the single currency gained 2.3% rallying to 1.1973 from 1.1704.
  • The Australian dollar advanced today after better than expected Building Permits data was released. Against the dollar, the Aussie jumped as high as 1.0685 from 1.0572. The British Pound rose against the greenback hitting 1.6454 from 1.6343.
  • Oil prices jumped to 87.69 dollars a barrel from 85.12. Gold edged lower to 1775.71 dollars an ounce from 1825.54. Silver also ticked lower to 40.24 dollars an ounce from 41.34.

Currencies to watch out for: EURUSD & USDJPY  

  • § The EURUSD pivot point is at 1.4475 with a preference to enter Long positions at 1.4485
  • § The USDJPY pivot point is at 77.05 with a preference to enter Short positions at 77.05
  • § The OIL pivot point is at 85.90 with a preference to enter Long positions at 85.90
  • § The Gold pivot point is at 1811 with a preference to enter Short positions at 1811                        

Today's calendar and market movers:

  • § Europe Consumer Confidence in August is forecast to fall to -16.6
  • § US Consumer Confidence in August is forecast to fall to 52.0
  • § US Home Price Index in June is forecast to fall 4.6%

Equity Markets:                                            

US equities were positive on Monday with the S&P500 trading up 2.83% and the DJIA up 2.26%. The European bourses were mixed with the FTSE trading down -0.02%, the DAX up 2.39% and the CAC up 2.16%. The NIKKEI and the HSI at the time of writing are trading up 1.13% and 2.22% respectively.

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