EU Morning Report - EU vows to publish bank stress tests!

Posted by admin as Forex News

EU vows to publish bank stress tests!

A weak or two without a crisis or a perceived crisis can go along way for the EURUSD. Yesterday we had a very successful Spanish bond issue which sparked some healthy risk seeking in the FX markets. The Swiss National bank added to this confidence following his hawkish comments on the Swiss economy as well as the news that the EU will back the publishing of ”bank stress tests”. The importance of publishing bank stress tests will help bring confidence back to the markets as the current jitters are caused by lack of knowledge of which bank owns whose debt. Overall price action for the EURUSD was between 1.2239 - 1.2412.
In the US yesterday we had a batch of disappointing economic reports out of the US which seemed to cap the risk appetite caused by the surge in the EUR. Initial jobless claims jumped to 472K for the week indicating that job creation is struggling in the states denting the optimistic recovery in consumer spending. We also had a weak CPI figure yesterday which increased concerns of possible deflation in the US which also caped the risk appetite from the surge in EUR, CPI fell over all by 0.2% and Philly Fed disappointed expectations as the reading was way below consensus. USDJPY price action was between 90.50 - 91.40 as the weak economic data caused a bout of selling in the USDJPY pair.

Currency to watch out for: EURUSD & USDJPY

§ The EURUSD pivot point is at 1.2250 with a preference to enter into Long positions at 1.260
§ The USDJPY pivot point is at 91.10 with a preference to enter Short positions at 91.05

Today’s calendar and market movers:

Equity Markets:

US equities closed positive yesterday with the S&P500 up by 0.13% and the DJIA up by 0.24%. The European bourses were mixed yesterday with the FTSE up 0.30% the DAX and the CAC closing at 0.53% and 0.19% respectively. The NIKKEI and the HSI at the time of writing is -0.04% and 0.75% respectively.

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