MORNING BRIEFING: Euro still under pressure

[RTFX-Trading]

MORNING BRIEFING: Euro still under pressure

What’s new:
Euro zone: Setback by Greek debt woes
United States: Delays China Yuan Probe in Aluminium Case
Japan: Yen Firms &  March exports rise 43.5% from previous year
Global: IMF revises its Global growth projection to 4.2% in 2010 from 3.9 % previously

Today:



Overnight Rates and Indices:
EURUSD: 1.3418 – 1.3374.
USDCHF: 1.0712 – 1.0677.
GBPUSD: 1.5473 – 1.5399.
EURJPY: 124.89 – 124.06.
USDJPY: 93.18 – 92.74.
DowJones: 11’124.92 +0.07%
NASDAQ: 2’504.61 +0.17%
S&P 500: 1’205.94 -0.1%
Nikkei: 10’949.09 -1.27%.
Shanghai: 3’000.11 -1.09%,
Gold: $1’147.10
Crude Oil: $83.63
 
Comments:

Euro slipped further against the US Dollar from its 1.3392 New York close, reaching lows of 1.3374 early Thursday morning. Euro suffered from mounting worries about whether Greece could finance its debt obligations in the near term. The downturn on the euro came as the spread of Greek Government bonds over the benchmark German Bunds widened beyond 500 basis points, the highest in 12 years. The fear of contamination to other euro-zone members escalated the euro downturn – spreads for Portuguese government bonds over German Bunds widened as well.

Greece has to raise 10bln Euro for a bond maturing May 19th while although talks with European union and IMF started yesterday, it could take some weeks before talks are finalized – Greek Finance Minister George Papaconstantinou is giving May 15 as deadline for a finalized text.  Euro troubles helped push up the US Dollar, the US Dollar index registered gains of 0.06%.

EURUSD should find support at 1.3350, and on the upside should find initial resistance at 1.3439. Today a number of important data is expected from France, Germany, EU, UK and US – so market sentiment may vary.

British Pound and the Euro may face downward pressure as their budget deficit figures threaten growth prospects.

Good Day.

Rudolf Muscat
Trading desk

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