EU Morning Report

Focus turns to the EU Finance Ministers meeting

  • The euro rose against its major counterparts as risk sentiment in the market got a boost. The European Central Bank announced yesterday that it will coordinate with the US Federal Reserve, the Bank of Japan, the Bank of England and the Swiss National Bank to give dollar loans to banks easing liquidity concerns. European equities turned positive after the news and against the dollar the single currency jumped as high as 1.3936 from 1.3703. Economic data also supported the euro after Employment Change gained 0.3% in the second quarter beating expectations for a 0.2% rise. Eurozone Inflation was also released yesterday showing a 0.2% gain in August. Focus turns to today's EU Finance Ministers meeting, which US Treasury Secretary Geithner is expected to join.
  • The US dollar edged lower yesterday after the central banks' move to provide liquidity to the financial markets. Against the Swiss franc, the dollar dipped to 0.8647 from 0.8797 after the Swiss National Bank decided to keep its monetary policy unchanged.
  • The Australian dollar edged higher yesterday supported by a heightened risk appetite in the market. Easing eurozone debt concerns helped the Aussie rebound hitting 1.0359 versus the greenback from 1.0181. The British Pound advanced versus the dollar after Retail Sales data surprised the market after it rose more than expected in August. The pair edged as high as 1.5868 from 1.5730.
  • Oil prices ticked higher yesterday to 90.12 dollars a barrel from 87.99. Gold fell to 1762.58 dollars an ounce from 1826.48. Silver also ticked lower yesterday to 39.30 dollars an ounce from 40.74.

Currencies to watch out for: EURUSD & USDJPY  

  • § The EURUSD pivot point is at 1.3940 with a preference to enter Short positions at 1.3930
  • § The USDJPY pivot point is at 76.60 with a preference to enter Long positions at 76.70
  • § The OIL pivot point is at 88.80 with a preference to enter Long positions at 88.80
  • § The Gold pivot point is at 1808 with a preference to enter Short positions at 1808                         

Today's calendar and market movers:

  • § US Consumer Sentiment Index in September is forecast to rise to 56.5 

Equity Markets:                                               

US equities were positive on Thursday with the S&P500 trading up 1.72% and the DJIA up 1.66%. The European bourses were also positive with the FTSE trading up 2.11%, the DAX up 3.15% and the CAC up 3.27%. The NIKKEI and the HSI at the time of writing are trading up 2.11% and 2.14% respectively.

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