Ireland passes budget cuts, Euro still retreats! 

  • The Dollar started weaker yesterday as the market was trading in a 'risk on' mood during Asia given news that the US Bush tax cuts would be extended to all Americans and that the Irish budget would pass an important vote. Dollar selling reversed however as a major move higher in the 10 year Treasury yield sent the USD soaring. In US stocks the DJIA traded -3 points lower closing at 11359 and the S&P traded +1 points up closing at 1223. Looking ahead, Weekly Oil Inventories are forecast at -1.3m vs. 1.1m previously.

    The Euro weakened yesterday despite the approved budget in Ireland as it was already largely priced in. The Euro also lost ground as the session unfolded as the lack of a broader solution for contagion worries gave no reason for new long positions. Technically speaking we saw the EURUSD failed to make a new high at 1.3416 indicating a technical reversal for now. Analysts are now calling for a retest of the 1.3000 level in coming days. German October Industrial Orders came in at 1.6% vs. -4% previously m/m. EUR/USD traded with a low of 1.3235 and a high of 1.3402 before closing at 1.3260. Looking ahead, October German Trade Balance is forecast at 15 vs. 15.6bn previously. 

Currency to watch out for: EURUSD & USDJPY

  • § The EURUSD pivot point is at 1.3305 with a preference to enter into Short positions at 1.3185
  • § The USDJPY pivot point is at 83.50 with a preference to enter Long positions at 83.50               

Today's calendar and market movers:

  • § Germany Trade Balance for October forecasted at 15 bio
  • § Canada House Starts for November forecasted at 175K
  • § United Kingdom CBI Industrial Orders forecasted at -12 

Equity Markets: 

  • US equities closed mixed on yesterday with the S&P500 up 0.05% and the DJIA down -0.03%. The European bourses were positive with the FTSE up 0.66% the DAX and the CAC closing up at 0.68% and up 1.63% respectively. The NIKKEI and the HSI at the time of writing is 0.9% and -1.69% respectively.