The market may open on a firm note, tracking higher Asian shares. US futures have gained. Asian shares surged on Friday, 29 June 2012, after a late Thursday night meeting of European leaders came up with a plan for a single financial supervisory mechanism for the European region to help stabilize markets.
European Commission President Herman van Rompuy said at a press conference early Friday that the mechanism will involve the European Central Bank and that there will be the possibility of direct recapitalization for European banks. Financial assistance will be provided by the European Financial Stability Facility until the European Stability Mechanism becomes available, he said. Europe is trying to do what’s necessary in order to break the negative cycle for the region, he said.
Although this is a short term very rushed solution for a long term problem, it means that the EU Ministers realize that they are against the wall.
EURUSD (1.260) surged over 2 cents on the news from the EU Summit and the Dollar Index declined to below 82.00
The Great British Pound
GBPUSD (1.5648) Sterling was able to gain momentum on the weakness of the US, as global markets hailed results from the EU Summit.
Asian –Pacific Currency
USDJPY (79.33) Japan released its monthly eco data, to a mixed bag, but nothing too unexpected or earth shattering as markets ignored eco data as risk aversion still remained the theme, but investors are likely to begin to move to risk assets as markets open on Friday. Prime Minister Noda’s coalition is on the verge of collapse.
Gold (1555.55) collapses as investors begin to move to more risk assets, as gold returned to its prior downtrend, suffering the biggest one day loss and likely closing the month at and the quarter at a loss.
Crude Oil (79.34) a report from the EIA showed that there is an excess of 1million barrels of crude per day, with production up and demand down. Crude should remain within a tight range between 78-81 dollar per barrel in the short term unless some political tensions cause temporary market reactions as the oil embargo moves into full effect on July 1, 2012.