MORNING BRIEFING: Markets still concerned over European Bank funding problems

[RTFX-Trading]

MORNING BRIEFING: Markets still concerned over European Bank funding problems

What’s new:
Asia: Equity indices dragged lower on European bank repayment concerns
United States: Financial reform bill trying to be settled by end of week
Japan: House starts data worst than expected
EURUSD: Manages to bounce off 1.2150

Today:

Rates in Asia and Indices:
EURUSD: 1.2239 - 1.2166.
USDCHF: 1.0856- 1.0810.
GBPUSD: 1.5074 - 1.5029.
EURJPY: 108.54 – 107.69.
USDJPY: 88.72 – 88.39.
DowJones: 9’870.30 -2.65%
NASDAQ: 2'135.18 -3.85%
S & P 500: 1'041.24 -3.10%
Nikkei: 9’382.64 -1.96%
Shanghai: 2'398.37 -1.18%
Gold: $ 1'243.80
Crude Oil: $ 76.11

 
Comments:

The EUR/USD managed to bounce off the 1.2150 level yesterday, and also today when it reached lows of 1.2166 – at the moment the pair is trading at 1.2224. On five minute chart the price is above the 100 & 200 moving average indicative of good momentum and hinting at the possibility the pair could be defending its bounce away from the 1.2150 level. A breach of the 1.2150 could mean a resuming of downtrend. RTFX Tradertip indicates resistance at 1.2268/1.2349; and support at 1.2129/1.2071.

European bank funding concerns dragged Asian stocks lower earlier this morning, but the situation could improve as European and US stock index futures were reportedly turning positive – even though the market is expected to remain cautious till the concerns for repayments by European banks gets resolved.

In the United States reforms intended to impose strict limits on bank’s ability to take on risky investments, after earlier intense negotiating session republican senator Scott Brown may be withdrawing his support if tax concerns for taxing large financial institutions were not addressed. The bill is seen as the biggest change in financial regulation in decades and was expected to pass in time for President Obama to sign it into law by 4th July.

In Japan data for house starts came in much worse than was being expected.

In this morning’s trading Euro, CAD, AUD edged slightly higher while CHF and JPY managed to hold on to much of their previous strength as the lost support had minimal impact until this morning.

Good day,


Rudolf Muscat
Trading desk

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