Over the weekend Italian PM Berlusconi resigned after the Chamber of Deputies passed the 2012 budget law with 380 votes. President Napolitano named former EU Commissioner Mario Monti as the new PM to lead a technocratic government. The EUR was supported briefly on news of shift in government, however the rally was short-lived. Despite the political developments in Italy, concerns remained elevated and the EUR moved sharply lower following Italy’s auction of 5-year bonds, lack of progress in Greece and negative economic data. Italy auctioned 3B euro of 5-year notes which drew a yield of 6.29% which the highest since 1997. The bid-to-cover was 1.47 which was higher than the 1.34 seen at last month’s sale. On the data front, EZ industrial production fell by -2.0% m/m in Sept. from the prior +1.4% – the largest drop in two and a half years. Portugal’s 3Q GDP fell -1.7% y/y (prior -1.0%) and -0.4% m/m (prior -0.1%). EUR/USD was rejected from the 21-day SMA and session highs above the 1.38 figure and plunged to current levels of around the 1.3650 zone.
An EU spokesman said that the European Commission is waiting for a written statement on the commitments to be undertaken by the Greek authorities. This may prove difficult as opposition leader Samaras said that he won’t sign the EU letter on the tranche and will not support the new austerity measures as it becomes evident that the new ‘unity’ government is still divided. Greek 10-year yields rose to record levels of nearly 28.45% as the nation struggles to secure the next tranche of aid.
In Japan, GDP figures released over night were broadly in line with expectations at 6.0% annualized growth in 3Q. This data signaled an end to the nation’s recession as the country returned to growth after three consecutive quarters of contraction. The positive GDP figures were driven largely by exports and helped to support the JPY. The yen also firmed on the back of risk aversion flows and is currently stronger against all of its G10 counterparts. USD/JPY dipped to lows below the 77.00 figure and tested the bottom of the daily ichimoku cloud that comes in around the 76.85 zone.
Asian equities finished to the upside and European markets are currently in negative territory with the DAX currently down by -1.18% and Euro Stoxx 50 lower by about -1.53%. U.S. stock futures are marginally lower. There is no economic data of note due out of the upcoming NY session. Price action is likely to be driven by headlines as EU officials (EU’s Barroso, ECB’s Praet and Constancio) will be on the wires.
Disclaimer: The information and opinions in this report are for general information use only and are not intended as an offer or solicitation with respect to the purchase or sale of any currency or CFD contract. All opinions and information contained in this report are subject to change without notice. This report has been prepared without regard to the specific investment objectives, financial situation and needs of any particular recipient. Any references to historical price movements or levels is informational based on our analysis and we do not represent or warranty that any such movements or levels are likely to reoccur in the future. While the information contained herein was obtained from sources believed to be reliable, author does not guarantee its accuracy or completeness, nor does author assume any liability for any direct, indirect or consequential loss that may result from the reliance by any person upon any such information or opinions.
Foreign Exchange and other leveraged products involves significant risk of loss and is not suitable for all investors. Increasing leverage increases risk. Spot Gold and Silver contracts are not subject to regulation under the U.S. Commodity Exchange Act. Contracts for Difference (CFDs) are not available for US residents. Before deciding to trade forex, you should carefully consider your financial objectives, level of experience and risk appetite. Any opinions, news, research, analyses, prices or other information contained herein is intended as general information about the subject matter covered and is provided with the understanding that FOREX.com is not rendering investment, legal, or tax advice. You should consult with appropriate counsel or other advisors on all investment, legal, or tax matters. FOREX.com is regulated by the Commodity Futures Trading Commission (CFTC) in the US, by the Financial Services Authority (FSA) in the UK, the Australian Securities and Investment Commission (ASIC) in Australia, and the Financial Services Agency (FSA) in Japan.
An EU spokesman said that the European Commission is waiting for a written statement on the commitments to be undertaken by the Greek authorities. This may prove difficult as opposition leader Samaras said that he won’t sign the EU letter on the tranche and will not support the new austerity measures as it becomes evident that the new ‘unity’ government is still divided. Greek 10-year yields rose to record levels of nearly 28.45% as the nation struggles to secure the next tranche of aid.
In Japan, GDP figures released over night were broadly in line with expectations at 6.0% annualized growth in 3Q. This data signaled an end to the nation’s recession as the country returned to growth after three consecutive quarters of contraction. The positive GDP figures were driven largely by exports and helped to support the JPY. The yen also firmed on the back of risk aversion flows and is currently stronger against all of its G10 counterparts. USD/JPY dipped to lows below the 77.00 figure and tested the bottom of the daily ichimoku cloud that comes in around the 76.85 zone.
Asian equities finished to the upside and European markets are currently in negative territory with the DAX currently down by -1.18% and Euro Stoxx 50 lower by about -1.53%. U.S. stock futures are marginally lower. There is no economic data of note due out of the upcoming NY session. Price action is likely to be driven by headlines as EU officials (EU’s Barroso, ECB’s Praet and Constancio) will be on the wires.
Disclaimer: The information and opinions in this report are for general information use only and are not intended as an offer or solicitation with respect to the purchase or sale of any currency or CFD contract. All opinions and information contained in this report are subject to change without notice. This report has been prepared without regard to the specific investment objectives, financial situation and needs of any particular recipient. Any references to historical price movements or levels is informational based on our analysis and we do not represent or warranty that any such movements or levels are likely to reoccur in the future. While the information contained herein was obtained from sources believed to be reliable, author does not guarantee its accuracy or completeness, nor does author assume any liability for any direct, indirect or consequential loss that may result from the reliance by any person upon any such information or opinions.
Foreign Exchange and other leveraged products involves significant risk of loss and is not suitable for all investors. Increasing leverage increases risk. Spot Gold and Silver contracts are not subject to regulation under the U.S. Commodity Exchange Act. Contracts for Difference (CFDs) are not available for US residents. Before deciding to trade forex, you should carefully consider your financial objectives, level of experience and risk appetite. Any opinions, news, research, analyses, prices or other information contained herein is intended as general information about the subject matter covered and is provided with the understanding that FOREX.com is not rendering investment, legal, or tax advice. You should consult with appropriate counsel or other advisors on all investment, legal, or tax matters. FOREX.com is regulated by the Commodity Futures Trading Commission (CFTC) in the US, by the Financial Services Authority (FSA) in the UK, the Australian Securities and Investment Commission (ASIC) in Australia, and the Financial Services Agency (FSA) in Japan.
No comments:
Post a Comment