EU Morning Report

Focus turns to Bernanke's speech at Jackson Hole

  • The US dollar steadied against its major counterparts as focus turns to Friday's speech by the Fed Chairman Ben Bernanke at the Jackson Hole. Investors around the world will be closely watching Bernanke's words and whether a third round of quantitative easing will be announced. Against the Japanese yen, the dollar rose to 76.93 from 76.66 on fears the Japanese authorities will intervene in the currency markets to stem yen's gains. The Japanese Finance Minister Yoshihiko Noda appears determined to stop the yen from rising further and he warned that the Bank of Japan will take decisive steps if necessary.
  • The euro edged higher against the dollar yesterday but fell during the US session. There was little price action in the market yesterday as no major economic data was released. The pair jumped to 1.4433 from 1.4347 but it later surrendered its gains to trade at 1.4353. Focus turns to Purchasing Manager Index data from eurozone expected later today. Versus the Swiss franc, the single currency is trading in a tight range around 1.1330 and the pair was last traded at 1.1339. 
  • Oil prices rebounded to 85.28 dollars a barrel from 81.16. Gold gained 2.9% edging higher to a fresh record high at 1911.55 dollars an ounce from 1857.77. Silver rose to 44.19 dollars an ounce from 42.46.

Currencies to watch out for: EURUSD & USDJPY  

  • § The EURUSD pivot point is at 1.4345 with a preference to enter Long positions at 1.4355
  • § The USDJPY pivot point is at 77.00 with a preference to enter Short positions at 76.95
  • § The OIL pivot point is at 82.70 with a preference to enter Long positions at 82.70
  • § The Gold pivot point is at 1920 with a preference to enter Short positions at 1920                        

Today's calendar and market movers:

  • § Europe Purchasing Manager Index Services in August is forecast to fall to 50.9
  • § Europe Purchasing Manager Index Manufacturing in August is forecast to fall to 49.5
  • § US Manufacturing Index in August is forecast to fall to -7
  • § US New Home Sales in July is forecast to fall to 0.310M

Equity Markets:                                              

US equities were positive on Monday with the S&P500 trading up 0.03% and the DJIA up 0.34%. The European bourses were mixed with the FTSE trading up 1.08%, the DAX down -0.11% and the CAC up 1.14%. The NIKKEI and the HSI at the time of writing are trading up 1.08% and 0.56% respectively.

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