Dukascopy Fundamental Analysis
Italy’s cost of borrowing jumped after the country sold 7.5 billion euros of government bonds. Three-year bonds now produce yield of 7.89% as compared with 4.93% yield in October. The 10-year bonds added 24 basis points to 7.31%. Yields continue to rise while prices carry on falling.
US stock futures rose amid hopes for euro-zone leaders will rectify economic problems in the EU. Futures on the Dow Jones Industrial Average gained 53 points to 11,551 and futures on the Standard & Poor’s 500 stock index climbed by 7.10 points to 1,198.2. Nasdaq 100 futures advanced 7.50 points to 2,228.5.
According to Wall Street Journal, Chancellor George Osborn announced that British government plans to raise its bank levy. The current rate of 0.078% will be raised to 0.1%. The increase will produce additional 2.5 billi on pounds for British government. Osborn will deliver this plan today at the meeting at the House of Commons.
Swiss asset managers are likely to lose about 47 bn Swiss francs ($51.1 bn) as their clients are going to make large withdrawals ahead of tax arrangements with UK and Germany presumed to be implemented in 2013. Cash outflows are expected to surge during forthcoming 18 months. Bankers estimate potential capital outflows to be around 25%-30% of non-declared securities. Switzerland this year signed accord with UK and Germany that taxation of undeclared accounts will be allowed without disclosing client’s identity.
On Tuesday Japan’s benchmark Nikkei Stock Average jumped 2.3% or 190.33 points and closed at 8,477.82, indicating optimism on today’s summit in Brussels held to provide detailed solutions for taming debt turmoil. Auto makers and energy companies were among major winners: Nissan Motor Co. improved by 2.7%, Honda Motor Co. rose 3.6%, while JX Holdings Inc. advanced 2.8%.
Dukascopy Technical Analysis
Daily maximum: 1.3441
Daily minimum: 1.3286
The shared European currency moved higher today versus the American dollar as optimism concerning a closer monetary union in Europe grows among investors, piercing the market mean at 1.3326.
Daily Resistance: 1.3384; 1.3454; 1.3580. Daily Support: 1.3258; 1.3202; 1.3076. The daily trading stance remains bearish.
Daily maximum: 104.40
Daily minimum: 103.44
EUR continues its recovery as the EU leaders are working on new steps to restrain the contagion of financial problems from the core economies and move the Eurozone towards a more financially integrated monetary union.
Daily Resistance: 103.24; 103.62; 104.00. Daily Support: 102.48; 102.10; 101.72. The market outlook for the rest of the day stays strongly bearish.
Daily maximum: 1.5656
Daily minimum: 1.5470
The British national currency advanced higher today as the European leaders are acting to make the Eurozone more integrated, causing the market mean to be breached at 1.5516.
Daily Resistance: 1.5575; 1.5652; 1.5787. Daily Support: 1.5439; 1.5381; 1.5246. The daily stance remains bearish.
Daily maximum: 78.28
Daily minimum: 77.62
The market participants’ target consensus at 77.91 was successfully approached today as the Japanese yen eased on improving retail sales.
Daily Resistance: 78.39; 78.70; 79.49. Daily Support: 77.61; 77.14; 76.35. The daily training signals point at a strong bullish trend.
Daily maximum: 0.9240
Daily minimum: 0.9140
The bullish momentum American dollar for pair losses steam as investors purchase the Swiss Franc on hope the Swiss National Bank will intervene to change the exchange rate of EUR/CHF to 1.30. The market target mean 0.9232 has been pierced.
Daily Resistance: 0.9297; 0.9368; 0.9499. Daily Support: 0.9166; 0.9105; 0.8973. The daily training signals suggest the pair will be trading in a flat trend.
“The debt sovereign crisis is a community problem which can only be solved by all members moving from preconceived conditions. It means that Ireland saves the banks, the Greeks get their tax collection system in order, the Spaniards do something about persistent underemployment, the Germans something about unwillingness to allow a softening of the currency; in return for which everybody wins”
– Brian Lucey, Professor of Finance at the School of Business in Trinity College Dublin and Editor of Research In International Business and Finance
Dukascopy has interviewed Brian Lucey, Professor of Finance at the prestigious School of Business in Trinity College Dublin, to discover how Ireland is doing in light of the debt crisis in Europe. Professor Lucey gives his view on the troika ruling, Germany’s behaviour in the Eurozone and provides advice on how to rectify the turmoil.
What To Read Today
S&P may cut France rating outlook: paper
Credit rating agency Standard & Poor’s could change its outlook on France’s AAA rating to negative within days, a French newspaper reported on Monday, adding to fears France may lose its position among the top rank of sovereign borrowers.
U.S. Consumer Confidence Index Rises by Most Since April 20
Consumer confidence climbed in November by the most in more than eight years as Americans grew more upbeat about employment and income prospects.
Asia & PacificEurope
Japan Unemployment Rate Exceeds All Estimates
China will start lowering banks’ reserve requirements as early as December in a sharp turnaround of its monetary policy that underscores the rising dangers faced by the world’s second-largest economy, according to a Reuters poll.