MORNING BRIEFING: Euro recovers some ground amid rumours

[RTFX-Trading]

MORNING BRIEFING: Euro recovers some ground amid rumours

[B][I][U]What’s new:[/U][/I][/B]
Euro: recovers from four year lows
Eurogroup: Juncker quoted as saying no need for immediate intervention on Euro
Japan: GDP growth less than expected, deflation still persists
Global: Fears regulators could target carry trades next

[B][I][U]Today:
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[IMG]http://www.rtfx.com/images/news/calen200510.gif[/IMG]

[B][I][U]Rates in Asia and Indices: [/U][/I][/B]
EURUSD: 1.2437 - 1.2322.
USDCHF: 1.1575 - 1.1481.
GBPUSD: 1.4467 - 1.4319.
EURJPY: 114.12 – 112.11.
USDJPY: 91.87 – 90.85.
DowJones: 10’444.37 -0.63%
NASDAQ: 2'298.37 -0.82%
S & P 500: 1'115.05 -0.51%
Nikkei: 10’030.31 -1.54%
Shanghai 2’555.94 -1.23%
Gold: $ 1'188.70
Crude Oil: $ 70.28
[B][I][U]
Comments: [/U][/I][/B]

Yesterday afternoon EURO recovered from its four year lows, as markets were speculating that ECB would intervene to stop the Euro’s rapid fall. ECB spokespersons declined to comment on the rumour, and Eurogroup Chairman Juncker was quoted as saying he did not see a need for immediate action.

Euro’s pros and cons: on one hand Germany’s ban of naked short selling gave rise to doubts on euro zone unity, along with concern over fiscal sustainability and dampening growth prospects; But on the other hand one must also acknowledge that euro weakness is a positive for euro zone exports.

Norway’s GDP figure is expected today, analysts are expecting positive figures. Economists see potential in Norway and expect Norges Bank to continue with the rate hike throughout the coming months.

Figures for Japan’s GDP released yesterday show that GDP rose but growth was below what was expected, government officials were quoted as saying that even though economy is showing signs of recovery it is still experiencing deflation.

Fear regulators could target carry trades next, dampened support for high yielding currencies, like the Australian dollar. In fact the Aussie was down considerably against most of its major counterparts.


Good day,

Rudolf Muscat
Trading desk

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