EU Morning Report

Australian Business Confidence hits a two year low

  • The euro rebounded against its major counterparts during today's European session on talks China may purchase Italian bonds. Risk appetite in the market was hit by a surge in Italian bond yields, growing concerns about Greece's situation and fears that credit rating agency Moody's may downgrade France's three largest banks. Against the US dollar, the euro recovered from a seven-month low at 1.3536 to trade as high as 1.3688. Versus the Japanese yen, the euro rebounded from a ten-year low at 104.27 hitting 105.73.
  • The US dollar eased broadly today as risk sentiment in the market recovers supporting dollar denominated assets such as gold and oil. Against the Japanese yen, the greenback dipped to 76.97 down from 77.38 traded yesterday. Against the Swiss franc, the dollar edged lower to 0.8793 from 0.8909.
  • The Australian dollar dropped to a one-month low against the greenback after data showed that Business Confidence in August fell to the lowest level in more than two years. Later the pair recovered some of its losses to trade as high as 1.0374 from 1.0254. The British pound hit a seven and a half month low versus the dollar weighed by fears that Greece may be forced to default on its debt as it struggles to receive the next tranche from the International Monetary Fund. The pair fell as low as 1.5772 and it was last traded at 1.5845. Focus turns to the UK inflation data in August expected at 08:30 GMT.
  • Oil prices ticked higher to 89.19 dollars a barrel from 84.98. Gold fell to 1800.88 dollars an ounce from 1855.60 and today it recovered to trade at 1835.68. Silver dropped to 39.66 dollars an ounce from 41.41 and today it is trading at 40.83.

Currencies to watch out for: EURUSD & USDJPY  

  • § The EURUSD pivot point is at 1.3555 with a preference to enter Long positions at 1.3565
  • § The USDJPY pivot point is at 77.40 with a preference to enter Short positions at 77.30
  • § The OIL pivot point is at 88.20 with a preference to enter Long positions at 88.20
  • § The Gold pivot point is at 1855 with a preference to enter Short positions at 1855                     

Today's calendar and market movers:

  • § UK Consumer Price Index in August is forecast to gain 0.6%
  • § UK Goods Trade Balance in August is forecast to rise to -8.50B

Equity Markets:                                               

US equities were positive on Monday with the S&P500 trading up 0.70% and the DJIA up 0.63%. The European bourses were negative with the FTSE trading down -1.63%, the DAX down -2.27% and the CAC down -4.03%. The NIKKEI and the HSI at the time of writing are trading up 0.97% and down -4.21% respectively.

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