Dukascopy Fundamental Analysis
On Thursday German DAX 30 index managed to interrupt 8-day losses and edged up 1.5% to 5,543.91 as Ifo reported higher-than-expected business confidence index. German financial institutions recovered immediately: stocks of Commerzbank AG added 7.6%, Allianz SE gained 2.5% while Deutsche Bank AG advanced 2.9%. Downgrade of Portugal offset part of gains but did not break upward trend.
Credit Suisse Group announced it plans to close its US unit, Credit Suisse Private Advisors, as part of strategy aimed at increasing profitability of private banking sector. The US unit will be merged with Credit Suisse’s private banking unit in US. The shift will allow the company to streamline its operations and increase efficiency, said Alex Biscaro, Credit Suisse spokesman.
Failure of the Germany’s auction has led to increasing worries about the euro-zone debt crisis. The current German 10-year bonds cost 2.23% exceeding the French ones priced at 2.21%. Experts claim the UK has stronger appeal to investors as it is considered to be a safer investment option.
Although most Asian market indexes recovered on Thursday, Nikkei 225 closed lower at 8,165.18 giving up 149.56 points or 1.8%. Analysts explain Nikkei’s loss as investors attempt to catch up to yesterday’s developments in Europe. German poor auction amid poor manufacturing report from China had a negative impact on the index. Nikkei 225 was mainly hit by blue chip companies. Fujitsu Ltd. lost 2.6%, Hitachi Ltd. declined 2.5% while Nintendo Co. dropped 4.3%. On the upside, Olympus Corp. shares added 17.3% on hopes that it could save its equities from delisting.
Official SNB exchange rate for EUR/CHF is at CHF 1.2305 today; 3-month LIBOR CHF r emains at 0.05% (within target range of 0.00-0.25). Yields for 10-year Swiss Confederation bonds increased to 0.94% today. SMI stock index has lost 0.37% since opening bell, and is currently fluctuating around 5366 points.
Dukascopy Technical Analysis
Daily maximum: 1.3411
Daily minimum: 1.3316
The shared European currency is under pressure as the EU leaders split up on finding a common long-term solution, thus the market mean at 1.3381 has been breached.
The resistance (1.3476; 1.3609; 1.3820) and support (1.3265; 1.3187; 1.2976) levels remained intact today. The daily trading signals point at a continuation of the bearish trend.
Daily maximum: 103.45
Daily minimum: 102.71
The mean target at 103.98 was not tested today as EUR/JPY continued pursuing the downtrend on renewed hopes as the European debt crisis is threatening the core European economies. Investors should take into consideration the last two support levels at 102.36 and 101.29 whereas all resistance (103.80; 104.50; 1055.7) remained intact today. The daily market outlook is strongly bearish.
Daily maximum: 1.5565
Daily minimum: 1.5485
GBP/USD has approached the market mean at 1.5547 as the European regions economic conditions are deteriorating.
None of the resistance (1.5618; 1.5717; 1.5877) and support (1.5458; 1.5396; 1.5235) levels has been breached. The daily trading signals indicate a strong bearish momentum ahead.
Daily maximum: 77.27
Daily minimu m: 77.02
The American dollar inched lower today versus the national Japanese currency as at the moment investors are in favour of USD as safe-haven currency. As a result, the market mean at 77.28 remained untapped today.
Investors should closely watch the resistance (77.59/91; 78.57) and support (76.94; 76.60; 75.95) levels and follow the latest global economic developments. The daily outlook is neutral.
Daily maximum: 0.9215
Daily minimum: 0.9154
The pair inched lower today as investors turn to the American dollar as safe-haven currency on strong US macroeconomic data release today.
Resistance 2 (0.9220) and 3 (0.9299) might be tested next whereas all support (0.9098; 0.9063; 0.8984) levels remained intact today. The daily market bias is neutral.
“The level of private debt is too high to be isolated from what is happening in the debt markets around the world”
As the Eurozone countries are still struggling with the debt crisis, Dukascopy is persisting to interview the experts in finance to learn information from the inside. Today we talked to José García-Montalvo, Professor of Economics at the University Pompeu Fabra, Spain, who shared his opinion on the recent news from Spain. Spain still has the highest unemployment rate of 25% in the EU and the newly e lected government has promised to rectify the problem.
“I think that Portuguese government should stop following the advice of the European Commission, ECB and IMF”
The contagion from Greek sovereign debt is spreading to other troubled Eurozone countries, such as Italy, Spain and Portugal. Dukascopy has conducted a string of interviews to disclose the situation from the inside and bring you the recent news and experts’ opinions on the matter. Today Professor Ricardo Cabral has put Portugal under scrutiny and unpicked the recent economic developments for Dukascopy clients.
What To Read Today
France and Germany plan changes to EU treaties
Germany’s Angela Merkel and France’s Nicolas Sarkozy are to propose modifications to EU treaties to improve governance of the eurozone.
As Nervous Traders Watch Europe on Thanksgiving Holiday
As Americans give thanks over the holiday table Thursday, nervous traders will be watching the developments overseas and will continue to do so in Friday’s half day stock market session.
Asia & PacificEurope
Japan Risks Rating Downgrade as S&P Says Public Finances Are Deteriorating
Standard & Poor’s said Japanese Prime Minister Yoshihiko Noda’s administration hasn’t made progress in tackling the public debt burden, an indication it may be preparing to lower the nation’s sovereign grade.