EU Morning Report – Angela Merkel and other EU leaders call for Greece to do more to cut its …
Tuesday, March 2nd, 2010Angela Merkel and other EU leaders call for Greece to do more to cut its budget deficit!
- The US session yesterday saw some exciting seesawing in the EURUSD as it traded in a range between 1.3650 – 1.3460. Rumors of a Greek bailout circulated the wires making the record short positions nervous and sensitive to short covering. Also major investment banks were noted buyers at the lows indicating that some influential market participants feel the EURUSD is oversold. Political statements continued to come out of Europe with Angela Merkel, the German Chancellor, saying the euro is in a ”period of great challenge” and she pleaded to the markets to regain their confidence in the single currency. Greece was also urged to introduce new measures to reduce the budget deficit even more. PMI manufacturing in the economic bloc beat expectations and came in at 54.2. The market now turns it focus to Thursday’s ECB policy meeting, however no policy change is anticipated.
- In the US yesterday we had a disappointing manufacturing ISM which dropped to 56.5 for the month of February. Personal income and consumption came in higher than expected though indicating a slight pickup in consumer spending, or at least has stabilized. Fed Vice Chairman Kohn resigned yesterday effective as of 23 June following this president Obama was quick to announce that a new replacement will be nominated and confirmed soon.
- The star of the day was the GBPUSD as the pair made new lows since May 2009 trading at 1.4779. The UK is currently running a 12% deficit as well just as large as Greece and is facing possible downgrades by the rating agencies. Also the economic recovery in the UK is considered anemic and vulnerable to a double dip recession. Due to this the UK is reluctant to reduce its deficit as it risks stalling the recovery. It was also announced yesterday that a deal between AIG and Prudential was agreed upon meaning that the cross boarder Merger calls for a lot of GBP sales and USD purchases, overall the price action of the GBPUSD was between 1.5200 – 1.4780.
- The financial calendar today will release Euro zone Producer Prices for the month of January expected at +0.6%. In the US we have the Redbook report and in Canada we have the BoC rate decision expected to remain unchanged at 0.25%
.Currency to watch out for: EURUSD & USDJPY
- § The EURUSD pivot point is at 1.3590 with a preference to enter into short positions at 1.3580
- § The USDJPY pivot point is at 89.00 with a preference to enter long positions at 89.05
Today’s calendar and market movers:
- § Euro Zone Producer Prices for January expected at 0.6%
- § Canada BoC rate decision expected to remain unchanged at 0.25%
Equity Markets:
- US equities closed positive yesterday day with the DJIA and the SP500 closing 0.76% and 1.02% respectively. The European bourses were positive yesterday with the FTSE up 0.96% the DAX and the CAC closing positive at 2.06% and 1.64% respectively. The NIKKEI and the HSI at the time of writing is -0.49% and -0.83% respectively.
Written by Easy-Forex
