EU Morning Report – EURUSD rallies as a lack of further developments in Greece causes a round …
Here are the latest Financial News:
EURUSD rallies as a lack of further developments in Greece causes a round of short covering!
- Yesterday’s trading saw some exciting rallies across the major asset classes, majors in FX, commodities and Equities. Risk appetite was elevated as NY Fed Empire State index leaped to 24 vrs an expectation of 16. We also had a positive NAHB housing Market index coming in at 17 vrs an expectation of 15. US stocks ended the session 1.68% higher Crude made a high of $77.01 following the reports. Yields on the 2 year US government bond traded between 0.8 – 0.9% with price action indicating a possible support has been built in the area and a swing upwards maybe expected. USDJPY price action yesterday was between 89.70 – 90.50.
- Yesterday we had the European Union’s Economic and financial council meeting which was mainly focused on finding resolve for the Greek issues. No final concrete measures were announced on how the EU may help Greece in case of a default however the Greek finance minister did highlight that Greece will not be requiring any assistance from the EU. Given the event the EURUSD actually managed to rally from 1.3588 – 1.3781. The move indicates that despite a lack of positive news coming out of the EU the market seems to be oversold and unwilling to take new short positions in the pair as rhetoric indicates that the chances of a Greek default are indeed low. In regards to economic data we saw the ZEW come in much better than expected at 45.1 which also added momentum to the rally and sparking further short covering of EURUSD shorts.
- In the UK the highlight of the day was the Consumer price index report which came in at 3.5% year on year, the BoE CPI target is 2% and such inflationary figures are an indication to future BoE policy. However Governor King’s letter to the chancellor noted that the jump is only temporary and the CPI will drift lower in the medium term. The market is still awaiting an explanation as to why the QE program was suspended given the weak outlook the BoE has on the UK economy. GBPUSD price action was between 1.5727 – 1.5794.
- Today’s financial calendar will have a number of important data starting with the UK ILO unemployment report for December expected at 7.8%. Building Permits and Housing starts in the US will paint a picture regarding how the housing sector is performing. We will also have industrial output for January expected at 0.7% and finally the FOMC releasing its 26-27 January minutes.
Currency to watch out for: EURUSD & USDJPY
- § The EURUSD pivot point is at 1.3700 with a preference to enter into long positions at 1.3710
- § The USDJPY pivot point is at 90.00 with a preference to enter long positions at 90.05
Today’s calendar and market movers:
- § UK ILO Unemployment for December
- § US Housing starts for January expected at 0.58 mln.
- § FOMC Minutes for 26-27th of January are expected as well.
Equity Markets:
- US equities closed positive yesterday day with the DJIA and the SP500 closing 1.68% and 1.80% respectively. The European burses were positive yesterday with the FTSE up 1.48% the DAX and the CAC closing negative at 1.47% and 1.66% respectively. The NIKEI and the HSI at the time of writing is 2.72% and 1.76% respectively.
Source: Easy Forex
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