Asia: Shares inch lower ahead of German court decision this week Greece: Final Troika report will be submitted in October Forex: briefly traded above 1.28 in a very quiet market
- EUR/USD: 1.2755 - 1.2794.
0.9445 - 0.9467.
1.5983 - 1.6017.
99.81 - 100.04.
78.18 - 78.28. DowJones: 13'254.29 -0.39% NASDAQ: 3'104.02 -1.03% S & P 500: 1'429.08 -0.61% Nikkei: 8'800.34 -0.78% Shanghai: 2'115.39 -0.91% Gold: $ 1'731.20 Crude Oil: $ 96.34
Asian markets closed in negative territory after last Friday's strong rally supported by Draghi's proposal for the creation of the Outright Monetary Transactions (OMT) program to stem the EZ debt crisis. However, investors remain cautious ahead of the German constitutional court decision over the legal aspect of the ESM. US markets also ended up in the red after seeing 2007 levels last week due to some take-profit. Another main event this week is the FOMC meeting on Wednesday and Thursday which will provide more insight about the possibility of further QE, given the recent weak job figures with the unemployment rate still above 8.0% in August.
Despite the rising uncertainty, Spanish 10-year yields have eased below the 7% critical threshold at 5.73%. Similarly, Italian's bond also dropped to 5.17% for the 10-year maturity signaling that the ECB's latest actions managed to calm down investors' concerns.
On a side note, the Troika should stay in Greece another few weeks to complete its assessment of the austerity measures impact and hand over its final evaluation in October. The Greek Finance Minister also confirmed that those measures are "difficult" and his government "is trying to convince" the Troika that Greece can reach its deficit reduction target.
The forex market should continue to trade in range ahead of the events mentioned. The NZD (+0.08%) and CAD (+0.05%) are the main gainers whereas the USD (-0.09%) is the worst performer at the time of writing.
Ahead of us today, we have a very light economic docket starting with the French Non-Farm Payrolls in Q2, followed by the UK Trade data for July around 10:30 CET. Later on this afternoon, we're also expecting the Canadian Trade balance for July and the US IBD Consumer Sentiment for September.