EU Morning Report 

Focus now turns to Thursday's EU summit

  • The euro edged lower against the dollar during yesterday's Asian session on fears of a Greek debt restructuring. Investors fear that the eurozone debt crisis could worsen and focus turns to an emergency meeting by EU leaders on Thursday to discuss a bailout package for Greece. During the US session, the euro steadied but still remains fragile on the uncertainty surrounding Thursday's meeting. ECB President Jean-Claude Trichet also commented on Greece and said that a selective default must be avoided. Against the dollar, the single currency edged as low as 1.4014 but later the pair rebounded to 1.4135. Versus the safe haven Swiss franc, the single currency rose to 1.1549 recovering from a record low at 1.1363.
  • The US dollar recovered from a record low against the safe haven Swiss franc rising to 0.8198 from 0.8040. Investors' attention now turns to the US Housing data released today at 12:30 GMT. Against the Japanese yen, the dollar is trading on a tight range around 79.05. 
  • The Australian dollar dipped today after the Reserve Bank of Australia meeting minutes. The minutes revealed that the central bank is emphasizing on concerns regarding the global economy and less on the need for further interest rate hikes. Against the dollar, the Aussie rose to 1.0650 but then fell to 1.0608. Aussie's neighbor, the Kiwi remains firm after higher than expected inflation data raised speculation that interest rates may rise this year. Versus the greenback, the Kiwi climbed to 0.8468 from 0.8412.
  • Oil prices dipped to 94.68 dollars a barrel today from 97.29. Gold edged higher to a new record high at 1607.34 dollars an ounce from 1591.03. Silver also rose to 40.69 dollars an ounce from 39.57.

Currencies to watch out for: EURUSD & USDJPY  

  • § The EURUSD pivot point is at 1.4025 with a preference to enter Long positions at 1.4035
  • § The USDJPY pivot point is at 78.85 with a preference to enter Long positions at 78.90
  • § The OIL pivot point is at 95.00 with a preference to enter Long positions at 95.00
  • § The Gold pivot point is at 1588 with a preference to enter Long positions at 1588                          

Today's calendar and market movers:

  • § Germany Economic Sentiment in July is forecast to fall to -12.4
  • § US Housing Starts in June is forecast to rise to 0.575M
  • § US Building Permits in June is forecast to fall to 0.60M
  • § Canada Interest Rate Decision is forecast to keep rates unchanged at 1%

Equity Markets:                                                

US equities were negative on Monday with the S&P500 trading down -0.81% and the DJIA down -0.76%. The European bourses were also negative with the FTSE trading down -1.55%, the DAX down -1.55% and the CAC down -2.04%. The NIKKEI and the HSI at the time of writing are trading down -0.61% and -0.29% respectively.

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