EU Morning Report

Euro rebounds ahead of the Greek confidence vote

  • The euro rebounded yesterday after comments from the Eurogroup Chairman Jean-Claude Juncker eased concerns about the eurozone debt crisis. Eurozone policymakers gave Greece two weeks to accept a new austerity plan with new tax rises and further spending cuts. The Greek Prime Minister George Papandreou appealed for national unity in order to avoid a catastrophic default. Focus now turns to Greece and whether the Greek Prime minister will survive the confidence vote due later today. Against the dollar, the euro rallied to 1.4383 from 1.4191.
  • The US dollar fell yesterday as risk appetite begins to heal. Against the Japanese yen, the dollar fell to 80.08 from 80.36. The dollar also fell against the Swiss franc sliding to 0.8406 from 0.8516. Existing Home Sales data is expected from the US at 14:00 GMT.
  • The Australian dollar edged lower after the Reserve Bank of Australia meeting minutes revealed less hawkish comments. The RBA emphasized on the eurozone debt crisis and a slower global economy rather than the need to control inflation. Also, the central bank said that there is no urgent need to hike interest rates considering Australia's softer economic recent data. Against the dollar, the Aussie slid as low as 1.0532 from 1.0616 but rising commodity prices helped the Aussie rebound to 1.0578.
  • Oil prices gained 3.7% rising to 94.45 dollars a barrel today from 91.12 traded yesterday. Gold rallied to 1546.75 dollars an ounce from 1532.81. Silver also ticked higher to 36.11 dollars an ounce from 35.24.

Currencies to watch out for: EURUSD & USDJPY  

  • § The EURUSD pivot point is at 1.4290 with a preference to enter Long positions at 1.4300
  • § The USDJPY pivot point is at 80.40 with a preference to enter Short positions at 80.35
  • § The OIL pivot point is at 92.50 with a preference to enter Long positions at 92.50
  • § The Gold pivot point is at 1534 with a preference to enter Long positions at 1534                       

Today's calendar and market movers:

  • § UK Public Sector Net Borrowing in May is forecast to 15.75B
  • § Canada Retail Sales in April is forecast to gain 0.5%
  • § US Existing Home Sales in May is forecast to fall to 4.8M

Equity Markets:                                               

US equities were positive on Monday with the S&P500 trading up 0.54% and the DJIA up 0.63%. The European bourses were negative with the FTSE trading down -0.38%, the DAX down -0.19% and the CAC down -0.63%. The NIKKEI and the HSI at the time of writing are trading up 0.98% and 0.32% respectively.

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