EU Morning Report

Risk sentiment in the market stabilized, euro supported 

  • The euro rose against its major counterparts as risk sentiment in the market begins to stabilize. Hopes that the eurozone officials will act to prevent a Greek default and a eurozone debt contagion boosted demand for high yielding currencies. Reports for a plan to expand the European Financial Stability Facility rescue funds as well as the prospect for additional liquidity by the European Central Bank to European banks added further on investors' risk appetite. World equities turned positive and commodities were supported by a weaker greenback. Against the US dollar, the single currency rebounded to 1.3538 from an eight-month low at 1.3362. Versus the Japanese yen, the euro traded as high as 103.55 recovering from a ten-year low at 101.92.
  • The US dollar was softer against a basket of currencies on an improved risk appetite. Against the Swiss franc, the US dollar dipped to 0.8995 from 0.9143.
  • The Australian dollar rallied today versus the dollar to 0.9895 from 0.9621. Heightened risk appetite as well as higher stocks and commodity prices pushed the Aussie higher. The British pound also rose yesterday against the dollar to as high as 1.5593 from 1.5431. But Sterling is vulnerable to losses as the known dovish Bank of England member Adam Posen is scheduled to speak today. 
  • Oil prices jumped to 82.36 dollars a barrel from 77.12. Gold edged higher to to 1657.99 dollars an ounce from 1532.87. Silver also ticked higher to 31.79 dollars an ounce today from 26.05.

Currencies to watch out for: EURUSD & USDJPY  

  • § The EURUSD pivot point is at 1.3560 with a preference to enter Short positions at 1.3560
  • § The USDJPY pivot point is at 76.60 with a preference to enter Short positions at 76.55
  • § The OIL pivot point is at 80.30 with a preference to enter Long positions at 80.30
  • § The Gold pivot point is at 1612 with a preference to enter Long positions at 1612                          

Today's calendar and market movers:

  • § US Home Price Indices in July is forecast to fall 4.4%
  • § US Consumer Confidence in September is forecast to rise to 46.0

Equity Markets:                                               

US equities were positive on Monday with the S&P500 trading up 2.33% and the DJIA up 2.53%. The European bourses were also positive with the FTSE trading up 0.45%, the DAX up 2.87% and the CAC up 1.75%. The NIKKEI and the HSI at the time of writing are trading up 2.1% and 2.4% respectively.

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