MORNING BRIEFING: A renewed appetite for Risky assets

[RTFX-Trading]

MORNING BRIEFING:  A renewed appetite for Risky assets

What’s new:
US Dollar: Despite renewed risk appetite, USD manages to hold out
Euro Zone: Euro reaches higher in morning trading
European Union: Proposes an EU-wide financial markets watchdog
Japanese Yen: Faces reduced support as this shifts to higher yielding currencies

Today:



Rates in Asia and Indices:
EURUSD: 1.2326 - 1.2225.
USDCHF: 1.1568 - 1.1497.
GBPUSD: 1.4743 - 1.4636.
EURJPY: 113.88 – 112.68.
USDJPY: 92.52 – 92.04.
DowJones: 10'249.54 +2.25%
NASDAQ: 2'281.07 +2.64%
S & P 500: 1'098.38 +2.58%
Nikkei: 9’872.40 +2.80%
Shanghai: 2’586.64 +0.59%
Gold: $ 1,222.00
Crude Oil: $ 74.57

 
Comments:

The US Dollar lost some ground against most of its major counterparts in early trading this morning. This can be due to an increased risk appetite for riskier assets, made visible by increases in equity indices. An article stating that the Iranian Central bank was looking to sell EUR45 bln from its reserves to buy gold and Dollars, helped to cushion the US dollar’s reduced support – because although US Dollar lost some ground on the back of increased risk appetite, by and large there was no major depreciation.

Even the Japanese yen was under selling pressure, as support went to higher yielding currencies. Apart from this Finance Minister Kan was quoted as saying that a weaker Yen was favorable for most businesses and indicated a level of 95 against the US Dollar.

The Australian Dollar and the Canadian Dollar reportedly enjoyed support on the back of renewed risk appetite.

The European Union is proposing an EU-wide financial markets watchdog to initially regulate the credit rating agencies - given worldwide accusations that these agencies had in part contributed to the financial crisis.

EURUSD has traded between 1.2225 and 1.2326, on the downside support lies at 1.2192, and on the upside resistance is at around 1.2331. Despite the possibility of upsides sentiment for the short term remains negative and the outlook is still bearish.


Good day,


Rudolf Muscat


Trading desk

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