EU Morning Report

Focus turns to the UK Quarterly Inflation Report

  • The euro rose against the dollar recovering some of its losses after a successful bond auction on Tuesday. A Greek government official said that the country may receive another aid package supporting the single currency but later EU policymakers denied any talks for more financial aid. Against the dollar, the euro climbed as high as 1.4422 from 1.4270. The euro rallied against the sterling rising to 0.8810 recovering from a one month low at 0.8719.
  • The US dollar had a mixed trading day yesterday as risk sentiment tries to stabilize.  Against the Swiss franc, the greenback jumped as high as 0.8823 from 0.8715 after Switzerland Consumer Price Index revealed lower than expected figures. Investors are expecting the US Trade Balance data later today. 
  • Against the Japanese yen, the dollar rose yesterday supported by an improved risk sentiment. The pair traded lower hitting a low at 81.09 from 80.16 
  • The Australian dollar edged higher today while commodities continue to surge. The Aussie remains supported by heightened expectations that the central bank will hike rates in the following months. Against the dollar, the Aussie hit a one-week high at 1.0871 dollars from 1.0736 but its gains were limited after disappointing Chinese economic data.
  • Sterling plummeted yesterday versus the greenback falling to 1.6316 from 1.6416. Focus turns to the Bank of England Quarterly Inflation Report at 09:30 GMT that may provide a clearer picture on the monetary policy. Speculators expect that the central bank will lower the growth forecast and raise its inflation forecast. Investors will also be focusing on the BoE Governor Mervyn King and whether he will signal a rate hike. 
  • Oil prices rose to 104.57 dollars a barrel from 100.07. Gold ticked higher jumping to 1524.03 dollars an ounce from 1505.80. Silver also edged higher hitting 39.21 dollars an ounce from 37.30.   

Currency to watch out for: EURUSD & USDJPY  

  • § The EURUSD pivot point is at 1.4330 with a preference to enter Long positions at 1.4330
  • § The USDJPY pivot point is at 80.50 with a preference to enter Long positions at 80.60             

Today's calendar and market movers:

  • § UK Trade Balance in March is forecasted to fall to -3.05B
  • § US Trade Balance in March is forecasted to fall to -47B

Equity Markets:                                                

US equities were positive on Tuesday with the S&P500 trading up 0.81% and the DJIA up 0.6%. The European bourses were also positive with the FTSE trading up 1.28%, the DAX up 1.23% and the CAC up 1.13%. The NIKKEI and the HSI at the time of writing are trading up 0.39% and 0.3% respectively. 

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