Foxy Forex European Market Report
Posted in Market View
- Markets opened with gains but was short lived indexes turned to red when Italian 10-year bond yields surged to all-time highs showing Berlusconi’s vow to resign is not enough to ease fears also 2yr and 5yr BTP’s yields are now over the 10yr BTP yield
- Eurostoxx 50 down 1.85% the DAX down 1.8% the CAC down 1.4% the FTSE down 1.1%
- Optimism of Berlusconi’s resignation yesterday turned to fear as investors concerned about the uncertainty as Berlusconi depart the consequence is Italian borrowing costs rallied to Post-Euro highs as the 10-year bond yields at 6.76% the 2yr 7.5% also not a good sign
- The macroeconomic front UK trade deficit figures added reasons for concern UK trade gap rose to a record high at GBP 9.8B in September well above market consensus of a GBP 8.0B deficit August trade gap was revised to GBP 8.6 B from the previous GBP 7.6 B
- EUR/USD rally from 1.3600 lows Monday was capped at 1.3860 high in the Asian session the pair sold off to 1.3800 then accelerated during the European session to one-week lows of 1.3655 so far
- GBP/USD rally from last weeks lows of 1.5875 hit highs Tuesday of 1.6130 the pair started selling off from poor UK trade balance figures breaking below 1.6000 back to week lows of 1.5980
- USD/JPY broke thru 78.00 area was contained at 77.55, then rallied at the European session open supported by general dollar strength it still remains capped below 77.75 the previous post-intervention low
