EU Morning Report

Focus turns to the UK Retail Sales

  • The US dollar edged higher against high yielding currencies such as the Aussie and the euro but fell against safe haven currencies such as the Swiss franc and Japanese yen. Producer Price Index in July came in higher than expected showing a 7.2% gain higher than market expectations. Versus the Swiss franc, the dollar rallied to 0.8016 from 0.7769. Against the Japanese yen, the dollar edged slightly lower at 76.60 from 76.92. Focus turns to inflation data from the US expected at 12:30 GMT.
  • The euro edges lower against a basket of currencies on escalating concerns over the eurozone debt crisis and slow global growth. Against the greenback, the euro dipped to 1.4382 from 1.4517. Versus the Swiss franc, the single currency jumped to 1.1515 from 1.1367 today on talks the Swiss National Bank was intervening in the market to stop the franc from rising further.
  • The British Pound fell yesterday after the dovish Bank of England minutes and disappointing jobs data but later recovered to a two and a half month high at 1.6592 against the dollar from 1.6348. The minutes revealed the two hawkish MPC members withdrew their vote for a rate hike which resulted in a unanimous decision to keep interest rates on hold. In addition, unemployment figures unexpectedly rose to 7.9% from a previous 7.7%. Focus turns to UK retail sales expected at 09:30 GMT.
  • Oil prices fell to 86.79 dollars a barrel from 88.94. Gold edged higher to 1795.57 dollars an ounce from 1778.85. Silver also ticked higher to 40.56 dollars an ounce from 39.77.

Currencies to watch out for: EURUSD & USDJPY  

  • § The EURUSD pivot point is at 1.4350 with a preference to enter Long positions at 1.4360
  • § The USDJPY pivot point is at 77.00 with a preference to enter Short positions at 76.95
  • § The OIL pivot point is at 85.60 with a preference to enter Long positions at 85.60
  • § The Gold pivot point is at 1778 with a preference to enter Long positions at 1778                          

Today's calendar and market movers:

  • § UK Retail Sales in July is forecast to gain 0.3%
  • § US Initial Jobless Claims is forecast to rise to 400K
  • § US Consumer Price Index in July is forecast to gain 0.2%
  • § US Existing Home Sales in July is forecast to gain 3.8%

Equity Markets:                                               

US equities were positive on Wednesday with the S&P500 trading up 0.09% and the DJIA up 0.04%. The European bourses were mixed with the FTSE trading down -0.49%, the DAX down -0.77% and the CAC up 0.73%. The NIKKEI and the HSI at the time of writing are trading down -1.25% and -0.47% respectively. 

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