EU Morning Report

Aussie rises after Chinese data

  • The euro edged higher today after a series of positive economic data in China boosted risk appetite. World equities as well as commodities recovered further supporting the single currency. Against the dollar, the euro rose to 1.4444 after it broke below the 1.43 level to 1.4287. The euro remains under pressure after credit rating agency Standard & Poor's cut Greece's credit rating by three notches to triple C making Greece the lowest rated sovereign in the world. Against the safe haven Swiss franc, the euro recovered to 1.2094 after it hit a record low at 1.2003 yesterday.
  • The US dollar weakened against a basket of currencies today weighed by ongoing concerns over the US economic recovery. Focus turns to the US Retail Sales and PPI data released later today as well as to the Fed President Ben Bernanke's speech. Against the Japanese yen, the dollar fell to 80.08 from 80.68.
  • Sterling recovered from a three week low at 1.6213 against the greenback edging as high as 1.6426.
  • The Australian dollar rose after data revealed China's inflation was in line with expectations easing fears of further monetary tightening in the world's fastest-growing economy. Also, Industrial production and Retail Sales in China grew more than expected in May. China is Australia's largest trade partner and positive data from China supports the Aussie. Against the dollar, the Australian dollar rose to 1.0647 from 1.0528. Aussie's neighbor, the Kiwi, slid against the dollar after an earthquake and a series of aftershocks hit the country's second largest city, Christchurch. The Kiwi surrendered gains made after the central bank signaled a gradual tightening of its monetary policy. Versus the dollar, the Kiwi dipped to 0.8113 from 0.8213.
  • Oil prices plunged to 96.14 dollars a barrel from 99.30. Gold edged lower to 1510.77 dollars an ounce from 1532.58. Silver also fell to 34.54 dollars an ounce from 36.28.

Currencies to watch out for: EURUSD & USDJPY  

  • § The EURUSD pivot point is at 1.4365 with a preference to enter Long positions at 1.4375
  • § The USDJPY pivot point is at 80.50 with a preference to enter Short positions at 80.45
  • § The OIL pivot point is at 99.30 with a preference to enter Short positions at 99.30
  • § The Gold pivot point is at 1531 with a preference to enter Short positions at 1531                       

Today's calendar and market movers:

  • § UK Consumer Price Index in May is forecast to gain 0.2%
  • § US Retail Sales in May is forecast to fall 0.4%
  • § US Producer Price Index in May is forecast to gain 0.1%

Equity Markets:                                                

US equities were positive on Monday with the S&P500 trading up 0.07% and the DJIA up 0.01%. The European bourses were also positive with the FTSE trading up 0.13%, the DAX up 0.22% and the CAC up 0.07%. The NIKKEI and the HSI at the time of writing are trading up 1.05% and up 0.22% respectively.

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