EU Morning Report 

German parliament vote fails to support the euro

  • The euro fell against its major counterparts yesterday as the Parliament approved the extension of the European Financial Stability Facility rescue funds failed to support the single currency. Fears for an escalating eurozone debt crisis, the risk of a Greek default and the slowing global economy dampened investors' appetite for risky assets. Versus the US dollar, the single currency shed 1.1% dropping to 1.3522 from 1.3679. Against the Japanese yen, the euro dipped to 103.57 from 104.92. 
  • The US dollar got a boost yesterday against a basket of currencies after US economic data revealed better than expected figures. US Gross Final Gross Domestic Product in the second quarter was revised higher to 1.3% while the market was expecting a 1.2% gain. Initial Jobless Claims also surprised the market after a fall to 391K while 420K was expected. Against the Swiss franc, the US dollar rose to 0.9008 from 0.8918. Against the Japanese yen, the greenback edged higher to 77.02 from 76.41.
  • The New Zealand dollar plummeted versus the dollar after rating agency Fitch unexpectedly downgraded New Zealand to AA+ from AAA. Fitch explained the move by citing high levels of debt. Versus the greenback, the Kiwi dipped to 0.7634 from 0.7831, a decline of 2.5%. The British pound also slid against the dollar to trade as low as 1.5565 from 1.5715. 
  • Oil prices rose to 83.96 dollars a barrel from 79.57. Gold edged higher to 1640.34 dollars an ounce from 1588.31. Silver also ticked higher yesterday to 31.48 dollars an ounce from 29.44.

Currencies to watch out for: EURUSD & USDJPY  

  • § The EURUSD pivot point is at 1.3600 with a preference to enter Short positions at 1.3600
  • § The USDJPY pivot point is at 76.95 with a preference to enter Short positions at 76.95
  • § The OIL pivot point is at 84.95 with a preference to enter Short positions at 84.95
  • § The Gold pivot point is at 1653 with a preference to enter Short positions at 1653                           

Today's calendar and market movers:

  • § Europe Unemployment Rate in August is forecast to remain unchanged at 10%
  • § Europe Consumer Price Index in September is forecast to gain 2.5%
  • § Switzerland KOF Leading Indicator in September is forecast to fall to 1.35
  • § Canada Gross Domestic Products in Q3 is forecast to gain 0.3% 

Equity Markets:                                                

US equities were positive on Thursday with the S&P500 trading up 0.81% and the DJIA up 1.30%. The European bourses were mixed with the FTSE trading down -0.40%, the DAX up 1.10% and the CAC up 1.07%. The NIKKEI and the HSI at the time of writing are trading up 0.35% and down -2.08% respectively. 

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