EU Morning Report

Focus turns to the UK inflation figures

  • The euro edged higher yesterday recovering some of its losses and trading above a seven-week low against the dollar. The single currency got a boost after the European Finance ministers agreed on a rescue package of 78 billion euro for Portugal but no progress was made for Greece's debt crisis. Eurozone Consumer Price Index was as expected in April but still significantly above the central bank's target of 2%. Against the dollar, the euro recovered to trade at 1.4244 higher than a seven-week low at 1.4047.
  • The US dollar weakened against a basket of currencies during yesterday's US session after data disappointed investors. The Empire State Manufacturing Index revealed a sharp decline in May to 11.9 from 21.7. Against the Swiss franc, the greenback fell as low as 0.8799 from a three week-high at 0.8938. Against the Japanese yen, the dollar rallied climbing to a two-week high at 81.44 from 80.69.
  • The Australian dollar rose against the dollar after the Reserve Bank of Australia meeting minutes. The central bank sounded positive regarding the country's economic growth and said that higher interest rates may be needed in order to stop prices from rising. The Aussie rose as high as 1.0642 versus the dollar from 1.0518. Aussie's neighbor, the Kiwi, plummeted to 0.7754 from 0.7854 but then recovered its losses to trade as high as 0.7866. 
  • Sterling traded higher versus the greenback rising to 1.6254 from 1.6159. Consumer Price Index data from the UK is expected today at 8:30 GMT that is expected to provide an insight to the country's inflation.
  • Oil prices ticked lower falling to 96.48 dollars a barrel from 99.62. Gold slid to 1488.65 dollars an ounce from 1504.32. Silver also edged lower at 33.46 dollars an ounce from 35.22. 

Currency to watch out for: EURUSD & USDJPY  

  • § The EURUSD pivot point is at 1.4245 with a preference to enter Short positions at 1.4235
  • § The USDJPY pivot point is at 80.70 with a preference to enter Long positions at 80.75            

Today's calendar and market movers:

  • § UK Consumer Price Index in April is forecasted to gain 0.7%
  • § US Housing Starts in April is forecasted to rise to 568k
  • § US Industrial Production in April is forecasted to gain 0.4% 

Equity Markets:                                              

US equities were negative on Monday with the S&P500 trading down -0.62% and the DJIA down -0.38%. The European bourses were also negative with the FTSE trading down -0.04%, the DAX down -0.21% and the CAC down -0.72%. The NIKKEI and the HSI at the time of writing are trading up 0.11% and down -0.11% respectively.

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