MORNING BRIEFING: Euro defends it support even after a downgrade, and a Hungary let down

[RTFX-Trading]

MORNING BRIEFING: Euro defends it support even after a downgrade, and a Hungary let down

[B][I][U]What’s new:[/U][/I][/B]
US Corporates: IBM & TI register profits, but markets still disappointed
Euro: Finding support from short covering
Equities: Asian indices mostly in the green this morning
Australia: RBA Minutes published

[B][I][U]Today:[/U][/I][/B]
[IMG]http://www.rtfx.com/images/news/CAL200710.gif[/IMG]


[B][I][U]Rates in Asia and Indices: [/U][/I][/B]
EURUSD: 1.3027 - 1.2928.
USDCHF: 1.0557 - 1.0485.
GBPUSD: 1.5310- 1.5211.
EURJPY: 113.35 – 112.14.
USDJPY: 87.19 – 86.67.
DowJones: 10’154.43 +0.56%
NASDAQ: 2'198.23 +0.88%
S & P 500: 1'071.25 +0.6%
Nikkei: 9’300.46 -1.15%
Shanghai: 2'528.72 +2.15%
Gold: $ 1'183.30
Crude Oil: $ 76.98


[B][I][U]Comments: [/U][/I][/B]

From the United States Texas Instruments manages to nearly triple its quarterly profit and IBM reports a 9% gain in second quarter profit, but markets still disappointed as figures fall short of expectations. Despite this most of the Asian indices managed a significant rise.

This morning we saw support going away from the Japanese Yen, and the US Dollar as demand for carry trades increased, and US concerns continue to leave their print.

In the midst of a downgrade to Irish debt, and Hungary’s debt issues, the Euro managed to float higher above the 1.30 level against the US Dollar again this morning. Investors seem to have focus only for the upcoming stress tests and as weaker US economic data continues to flow markets are no longer comfortable with large short Euro/long USD positions – and resort to short covering to reduce their euro short positions, this in turn pushes the price for the EUR/USD up.

Minutes from the RBA monetary policy meeting described the economy experiencing a transition from public to private demand, and acknowledged a moderation of Asian economic growth but described it as desirable after all. The RBA also hinted that they were expecting the economy to remain well supported despite slowing Chinese demand.


Good day,


Rudolf Muscat

Trading desk

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