FXCC Market Review July 05 2012

Jul 5 • Market Reviews • 1646 Views • No Comments

JPMorgan Chase & Co. the largest underwriter of corporate bonds worldwide, jumped eight spots to number two in Asia as Li Ka-shing’s Hutchison Whampoa Ltd. (13) picked the bank to manage its return to the market.

European stocks fell from a two-month high and metals declined after Germany’s services industries unexpectedly shrank last month. The euro weakened amid speculation the ECB will cut interest rates to a record low tomorrow.

The Stoxx 600 retreated from the highest level since May 3 as two shares dropped for every one that advanced. The number of shares changing hands in companies listed on the gauge was 33 percent less than the average over the past 30 days.

Poland’s central bank, the only one in the European Union to raise borrowing costs this year, left the benchmark interest rate unchanged as the sovereign-debt crisis weighs on growth in the EU’s biggest eastern economy.

Japan stocks rose a second day amid speculation central banks in China and Europe will take action to spur growth, and as US factory orders beat estimates.

China’s slowdown dragged Hong Kong’s retail-sales growth to the weakest pace since 2009 as shoppers visiting from the mainland cut back on purchases of luxury goods.

 

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Euro Dollar:

EURUSD (1.2528) With US markets closed for the 4th of July holiday and light trading globally, the euro remained in a tight range with little activity, waiting on Thursday’s ECB decision. Markets are expecting a 25bps cut to the key lending rate and a small increase in the overnight deposit rate.

The Great British Pound

GBPUSD (1.5589) In a day with little eco data and no US markets, the DX climbed as traders also positioned themselves ahead of day of central bank decisions with the BoE expected to hold rates but to inject an additional 50bn pounds in monetary easing and the ECB expected to reduce rates to a historical low.

Asian –Pacific Currency

USDJPY (79.88) in a quiet morning of trading, the USD remained strong in the Asian markets ahead of the ECB announcements. The day will all be centered on central banks.

Gold

Gold (1616.55) after breaking above 1620, gold dipped to hold at this level, awaiting direction from traders, as the ECB meeting and decision looms ever closers.

Crude Oil

Crude Oil (88.07) On a US holiday, with little to no volume, crude was pushed upwards again  as Iran never misses a chance to turn up the rhetoric and with military exercises scheduled in the Gulf of Hormuz, Threats and demands to later cower back home. Will NATO be disbursed?

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