MORNING BRIEFING: EuroZone in the spotlight today

[RTFX-Trading]

MORNING BRIEFING:  EuroZone in the spotlight today

What’s new:
Euro Zone: EURUSD breaks the 1.2800 level
Euro Zone: Policy rate announcement today, focus lies on press conference that follows
US Dollar: Maintains its gains
United Kingdom: Elections today
New Zealand Dollar: surges against major currencies
Australian dollar: trades weaker on poor results


Today:


Rates in Asia and Indices:
EURUSD: 1.2856 - 1.2737.
USDCHF: 1.1245 - 1.1152.
GBPUSD: 1.5148 - 1.5020.
EURJPY: 120.72 – 118.85.
USDJPY: 93.97 – 93.29.
DowJones: 10’868.12 -0.54%
NASDAQ: 2'402.29 -0.91%
S & P 500: 1'165.87 -0.66%
Nikkei: 10’695.69 -3.27%
Shanghai 2’739.70 -4.11%  
Gold: $ 1'175.20
Crude Oil: $ 79.03
 
Comments:

EURUSD broke below 1.28 to reach 14 month lows. Social unrest in Greece and rising yields for other euro zone members keep weighing on the Euro. The US Dollar held on to its recent gains during the Asian Session. EURUSD traded 1.2737 – 1.2865 (up to the time of writing) Major Asian indices fell, as Japan returns from its holiday.

Euro Zone Policy rate announcement is expected today, no changes are expected – but the usual press conference that follows is likely to be dominated by the debt crisis questions. Analysts are increasingly suggesting that ECB may opt to slash borrowing costs and resorting to quantitative easing in efforts to address the debt issue.

Today the long awaited UK General election, risks of unclear majority still weigh on British Pound. Most likely markets have been waiting for clarity of the outcome and will move on a result, likely to reflect in volatility for the pre-result period.

New Zealand Dollar surged against major currencies, on rising expectations that the country might resort to rate hikes sooner, on the back of report showing an unexpected fall in unemployment rate after two years. Australian Dollar lost ground on reports that trade balance deficit widened as oil purchases increased the imports’ bill, and on separate reports showing a weak increase in Australian retail sales, underperforming forecast levels.

Good Trading,


Rudolf Muscat
Trading desk

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