EU Morning Report 

Risk appetite hit by poor US Payrolls figures 

  • The US dollar edged higher against a basket of currencies after the US Non Farm Payrolls data disappointed investors spurring heightened demand for the safe haven currency. The report revealed 0K job growth while the market was expecting an increase of 75K and the unemployment rate was unchanged at 9.1%. World equities dropped and precious metals rose as investors are worried that the US economy may slide back into recession. Against the Swiss franc, the greenback shed 3% falling to 0.7710 from 0.7950 but later the pair rebounded to trade at 0.7913.
  • The euro plummeted against its major counterparts after the US Payrolls figures disappointed the markets. German Chancellor Angela Merkel failed to win an election in her home state raising fears that support for eurozone's debt problems will start to fade. Further pressuring on the single currency is speculation that the European Central Bank will abandon its hawkish stance at the monetary policy meeting on Thursday. Against the greenback, the euro shed 1.1% dropping to 1.4135 from 1.4287 and it was last trading at 1.4152. Versus the Swiss franc, the single currency dipped to 1.1000 from 1.1354, a decline of 3.1%. 
  • The Australian dollar fell weighed by growing concerns about eurozone's debt problems and weak US Non Farm Payrolls data. Investors' appetite for riskier assets is lower and against the dollar, the Aussie dipped to 1.0569 from 1.0733. Focus now turns to the Reserve Bank of Australia Interest Rate decision tomorrow at 04:30 GMT.
  • Oil prices ticked lower to 85.34 dollars a barrel from 88.97. Gold edged higher to 1890.48 dollars an ounce from 1824.55. Silver also ticked higher to 43.34 dollars an ounce from 41.50. 

Currencies to watch out for: EURUSD & USDJPY  

  • § The EURUSD pivot point is at 1.4230 with a preference to enter Short positions at 1.4220
  • § The USDJPY pivot point is at 77.00 with a preference to enter Short positions at 76.95
  • § The OIL pivot point is at 87.00 with a preference to enter Short positions at 87.00
  • § The Gold pivot point is at 1852 with a preference to enter Long positions at 1852                     

Today's calendar and market movers:

  • § Europe Purchasing Manager Index Services in August is forecast to fall to 51.5
  • § Europe Sentix Investor Confidence in September is forecast to fall to -18
  • § UK Purchasing Manager Index Services in August is forecast to fall to 54.0
  • § Europe Retail Sales in July is forecast to fall 0.1%

Equity Markets:                                                

US equities were negative on Friday with the S&P500 trading down -2.53% and the DJIA down -2.20%. The European bourses were also negative with the FTSE trading down -2.34%, the DAX down -3.36% and the CAC down -3.59%. The NIKKEI and the HSI at the time of writing are trading down -1.94% and -2.17% respectively.

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