The Euro could not hold on to its gains from Wednesday’s trading session and grew marginally weaker against the USD, trading at $1.3091.
The EU Summit is underway with hopes that there would be progress in regards to Greece and Spain’s debt crisis and also touch upon the EU banking reforms. It is being reported that Greece has managed to reach an agreement with its international lenders to re-negotiate its bailout conditions.
Meanwhile, Standard and Poor’s downgraded Cyprus investing rating deeper into Junk territory on account of political expediency which was delaying its bailout. Cyprus had requested for a bailout from the EU and the IMF in June as two of its largest banks suffered losses due to the Greek debt write-down. While there is no clear number on the bailout amount requested, analysts speculate that Cyprus could be seeking about €10 billion which is close to 60% of its GDP.
London FTSE Snapshot
The FTSE100 index closed steadily upwards on Wednesday marking a second consecutive day of gains. Mining sector managed to boost the index.
On the economic front, there was good news as the ONS released the latest unemployment data, which dropped to 7.9% unemployment rate, The Bank of England released its October MPC minutes which showed that the members were split in regards to expanding its quantitate easing policy. With inflation easing and improved employment data, it gives room for the MPC to expand its asset purchase program which expires by November. However, due to any indications on whether to continue on with the BoE’s asset purchase program, much will be left to be seen during the November meeting.
Later today, the ONS will be releasing the September retail sales monitor. The BRC’s retail sales monitor showed a healthy rebound to +1.5% in September after August’s disappointing 0.4% drop.
Market News – Asia
News reports from Japan stated that the BoJ is expecting the inflation to rise less than 1% of its target for the fiscal year March 2014. This is likely to put pressure on the central bank to push for more policy easing in the next meeting.
China’s third quarter GDP data was released which showed an improved reading of 7.4% which managed to add confidence to the markets. The Shanghai Composite grew 1% around mid day, local time. Asian stocks rose to a one month high as commodities were seen as the major movers. The MSCI Asia Pacific Index outside of Japan gained 0.8%. The Japanese Yen slid 0.3% against the dollar, trading at 79.14.
Commodity currencies from the region, namely the AUD and the NZD reached multi week highs with positive GDP data from China. The AUD increased 0.2% trading at $1.0397 while the NZD was trading at $0.8213.
Market News – US
US equity markets managed to overcome the weakness and moved into positive territory on Wednesday’s trading session. Better than expected housing starts data from the US boosted a mild rally. However there was disappointing earnings report from IBM and Intel which the markets managed to overcome.
The Dow Jones gained 0.04% making it a fourth consecutive session gains. The S&P500 moved up by 0.41% while the Nasdaq closed 0.10% higher.
Latest data on builder confidence in the US came out positive and the housing starts rose to 872k in September from August’s revised data of 785k.
Crude Oil futures managed to add $0.3 to trade at $92.12 to a barrel while Gold futures rose to $1753 to an ounce.