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Good Monday to you bluish koalas.
Give a smile and be happy At least there is no crazy forex gap to haunt our margin accounts ya?
Last week, we ended on a mixed note.
Over in the US, Building Permits came out better than expected. However the Prelim UoM Consumer Sentiment was worst than the estimates. Concerns over Greece begun to grow as the initial excitement from the aid details worn off. Hesitation was felt as Greece called for a meeting today with officials from the European Union and IMF.
The EUR/USD was bearish for most part of the day. After nearing the strong line of 1.3400, it bounced back towards the other strong line of 1.3455.
After a bearish Friday, the S&P 500 is currently bullish. This may be due to the much better than expected earnings of Citigroup.
Oil is currently around $84. Mid $80s seems to be the middle point for oil prices for now.
Gold is pressured by a stronger US Dollar and is currently trading around $1134+.
First up, remember the meeting that Greece called? This was apparently to meet with the European Union, ECB and IMF officials to confirm on the details of the aid package. The meeting was postponed until April 21 due to the volcanic cloud from Iceland disrupting European air travel. This definitely disappointed many investors who were keen to see more concrete actions with regards to the Greece deficit crisis. To make things worst, Greek labor unions threatened new strikes over the possibility of more budget cuts. It is widely believed that as part of the aid package comes IMF’s belt tightening conditions. The premium investors seek for Greek 10-year bonds over German debt reached a highest since before the euro started in 1999. Furthermore a high was hit today with regards to the cost for insuring Greece’s debt against default.
Adding more woes to the Euro is the current Iceland volcanic ash issue. As European air carriers faced the closure of the region’s airspace, losses of $300 million a day has been estimated. It was reported that the carriers are seeking aid from the national governments who are already on stretched budgets.
Over in the US, the economy is pretty resilient as she simply shrugs off negative sentiments. With the better than expected earnings of the various big companies, investors may see more reason to believe in this apparent momentum of recovery for the American economy. Having said so, unemployment is still high and remains an anchor to the recovery and the recent problems with Goldman Sachs may also weight the positivity down.
Tomorrow brings us important economic data such as the German ZEW Economic Sentiment. Fed Chairman Mr Bernanke is also due to testify.
A return of bullish momentum may bring us to 1.3550.
Renewed bearish strength may target 1.3400 again and bring 1.3360 into the picture.
I had a fulfilling day! Did some reading up, improved on the forex koala website and facebook page. Do you like my second article for forex newcomers? Hope it is useful.
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Trade safely and remember to finish the week GREEN.
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