But near the end of the US trading hours, global ratings agency Fitch said in a statement that the sudden spread of the European debt crisis threatened Bank of America’s rating.  This statement caused a sharp decrease in market sentiment and the Dow fell 200 points in less than half an hour.  Before this there was a small rebound after the Euro retraced all its gains from trading during the American trading period.

The spreading of the debt crisis in Europe has been the main focus of the market this week.  The market’s first reaction was a general increase in the euro area countries’s bond rates, with the Italian 10-year Treasury bond yields exceeding 7%.  This was followed by France’s AAA rating being questioned by the market.  Meanwhile the President of the Euro Group and Prime Minister of Luxenbourg Jean-Claude Juncker believes that the German debt level, which is higher than that of Spain, is also a cause for concern.  If the spread of the debt crisis to the core euro area countries has not really caused significant market panic, could it spread to the U.S. banking industry?

In today’s increasingly interconnected financial markets, the countless ways in which the US and European banking sectors are related is making it very difficult for American banking to escape the troubles of the European debt crisis.  In a statement made towards the end of the US trading day, Fitch gave a very serious reminder that the spreading of the European debt crisis is already a very serious issue.  Therefore, we should carefully consider the situation and give it our full attention.

There is not much European economic data being released today, with UK retail sales in October being released at 09:30 and Eurozone construction spending for September being released at 10:00.  What is important is the US data- data on UK retail numbers, American seeking employment and new housing numbers will all be released during the day.  If US employment and new housing numbers go against the British data then it may have some impact on market sentiment.  However the market’s focus is still concentrated on the risk of a spreading of the European debt crisis.  If the market continues to see contradicting news, the euro will continue to follow its current downward trend in shock.  Therefore, one must pay close attention to the current market and gauge the fear of a spreading global debt crisis.  If such fear is present, the euro will face increased selling pressure as more traders unload their positions in these selling rallies.  In these conditions, pay attention to strict stop losses.

Euro Short-Term Resistances:

1.  1.3480

2.  1.3508

3.  1.3550

Strong resistance at 1.3650

Euro Short-Term Supports:

1.  1.3420

2.  1.3380

3.  1.3350

Strong support at 1.3250

Special Note:  The current market speculation is that the debt crisis has become increasingly difficult to control.  If a serious deterioration in the European debt problems were to affect the U.S. banking industry it would lead to market swings.  For now, pay close attention to news, and exercise caution when dealing in the markets.

Important economic indicators being released today:

09:30 UK Retail Sales in October
Market Impact ★

10:00 Eurozone Construction Output in September
Previous Value: 0.2%/ month, 2.5%/ year
Market Impact ★

10:00 Switzerland ZEW Index of Economic Status for November
Market Impact ★

10:00 Swiss ZEW Investor Confidence Index for November

13:30 U.S. October Housing Starts
Previous value 658,000
Market Impact ★

13:30 U.S. Building Permits in October
Previous Value: 594,000

13:30 U.S. Building Permits in October (Month-over-Month)
Previous Value: -5.0% / month
Market impact ★

13:30 U.S. November 12, Initial Jobless Claims for the Week of November 11
Market Impact ★

15:00 U.S. November Philadelphia Fed Manufacturing Index
Previous Value: 8.7

The above information is given for reference purposes only.  Currency trading involves significant investment risk.  Careful analysis and selection is required.

英国ASJ国际金融

British ASJ Financial Services Ltd

Yang, Chief Analyst

2011.11.17

The concerns in Italy have not dissipated, and as the debt crisis spreads from Greece to Italy, there is an increased risk of it spreading to Spain as well.  Yesterday, the spread between France and Germany’s 10-year bond yields widened to its highest level since the euro’s creation.  Italy, Spain, and Belgium’s cost of debt default insurance rose to a record high.  Yesterday morning, the euro continued to decline throughout the Asian and European trading hours, falling once again to a level near 1.3500.

With a lack of sustainable debt, the risk of the euro’s disintegration, possible downgrades of countries’ national debt, and the widening spreads between bond yields and default costs, the European debt crisis seems to moving towards increased confusion.  There is severe deterioration in the direction of development, which will certainly affect market sentiment and create a setback to the euro’s short-term success.

There is a large amount of data being released today for Europe and the US, with the UK unemployment rate for October being released at 09:30, the Eurozone Consumer Price Index for October at 10:00, the Bank of England’s quarterly inflation report at 10:30, the US October Consumer Price Index at 13:30, and the US net foreign security purchases (TIC flows) for September at 14:00.

The economic data being released today is very important.  One should pay close attention to the current market for fear that the Eurozone’s debt crisis will spread and the euro will face increased selling pressure.  When conducting operations in these selloff markets, pay attention to strict stop losses and tactics.

Euro: Short-term Resistances
1.  1.3500
2.  1.3530
3.  1.3550
Strong resistance at 1.3650

Euro: Short-term Support
1.  1.3430
2.  1.3400
3.  1.3380
Strong support at 1.3300

Special Note: The current market speculation is that the debt crisis is becoming increasingly difficult to control.  Because of worries that the Eurozone economy may fall into recession, the European Central Bank may further cut interest rates.  Pay close attention to the news, and exercise caution.

Important economic indicators being released today:

09:30 UK October Unemployment Rate
Previous value of 5.0%
Market Impact ★

09:30 UK Jobless Claims Rate Changes in October
Previous Value 17500

10:00 Eurozone Consumer Price Index in October
Previous value of 0.8% / month, 3.0% / year
Market Impact ★ ★

10:00 Eurozone Core Consumer Price Index in October
Previous Value of 1.6% / year

10:30 Bank of England Quarterly Inflation Report;
Market Impact ★

12:00 U.S. MBA Mortgage Applications for the Week of November 11

13:30 U.S. October Consumer Price Index
Previous Value of 0.3% / month, 3.9% / year
Market Impact ★

13:30 U.S. October Core Consumer Price Index
Previous value of 0.1% / month, 2.0% / year

14:00 U.S. September Net TIC Flows
Value of $ 89.6 billion Previous;
Market Impact ★ ★ ★

14:00 U.S. September Net Long-Term TIC Flows
Previous Value of $57.9 billion

14:15 U.S. Industrial Production in October
Previous Value of 0.2%
Market Impact ★

14:15 U.S. Capacity Utilization in October
Previous Value: 77.4%

15:30 U.S. EIA Crude Oil Inventories for the week of November 11

The above information is given for reference purposes only.  Currency trading involves significant investment risk.  Careful analysis and selection is required.

英国ASJ国际金融

British ASJ Financial Services Ltd

Yang, Chief Analyst
2011.11.16

Yesterday, although the Italian 10-year bond yields fell to 6.35%, the 5-year bonds that were auctioned hit record high rates at 6.29%, while mid-October’s auction of 5-year bond yields hit 5.32%.

Although the transition governments in Italy and Greece are expected to succeed, the market still needs clear guidance about the further control of and solutions to the European debt problems.  The EFSF needs to clarify the current position and operation of its program, with the European Central Bank’s degree of participation in the debt settlement likely to be the focus of the market from here on out.

There is a large amount of economic data being released today concerning the European and U.S. markets, with Germany’s third quarter GDP at 07:00 and the Eurozone’s third quarter GDP at 10:00.  The euro zone’s third quarter GDP and Germany’s third-quarter GDP data will give clearer guidance to the market.  At 13:30 we have the United States’ October 30 core retail sales and the year-over-year U.S. October producer price index, and at 21:30 the U.S. October month-over-month producer Price Index.  With this data we will have a clear understanding of current US inflation levels.  One should conduct market operations according to the quality of indicators being released, and pay attention to strict stop losses.

Euro short-term resistances:

1.  1.3665

2.  1.3691

3.  1.3725

Strong resistance at 1.3780

Euro short-term supports:

1.  1.3600

2.  1.3549

3.  1.3506

Strong support at 1.3450

Special Note: Major involvement in the U.S. market is picking up again, as the initial optimism triggered by the formation of new governments and Prime Ministers in Italy and Greece is fading. The market is once again concerned about the huge Euro zone sovereign debt problem, so pay close attention to any news and be cautious in your operations.

Important data being released today:
06:30 France third-quarter GDP
Previous value: 0.0% / quarter, 1.7% / year;
Market Impact ★

07:00 Germany third-quarter GDP
Previous Value: 0.1% / quarter

09:30 UK Retail Price Index in October
Previous Value: 0.8% / month, 5.6% / year

09:30 UK Consumer Price Index in October
Previous value of 0.6% / month, 5.2% / year;
Market Impact ★

09:30 UK Core Consumer Price Index in October
Previous Value: 3.3% / year

10:00 German ZEW Economic Sentiment Survey in November
Previous Value: -48.3;
Market Impact ★

10:00 Eurozone ZEW Economic Sentiment Survey in November;
Market Impact ★

10:00 Eurozone Trade Balance in September
Previous Value: -34 million euros;
Market Impact ★

10:00 Eurozone third-quarter GDP
Previous value of 0.2% / quarter, 1.6% / year;
Market impact ★ ★

13:30 Canadian Manufacturing Sales in September;
Market Impact ★

13:30 U.S. October Retail Sales
Previous Value: of 1.1%; Market Impact ★

13:30 U.S. Core Retail Sales in October
Previous value 0.5%

13:30 U.S. Producer Price Index in October
Previous Value: 0.8% / month, 6.9% / year;
Market Impact ★

13:30 U.S. Producer Price Index (Ex Food & Energy) in October
Previous value 0.2% / month, 2.5% / year

15:00 U.S. Business Inventories in September
Previous value 0.5%;
Market Impact ★

The above information is given for reference purposes only.  Currency trading involves significant investment risk.  Careful analysis and selection is required.

英国ASJ国际金融

British ASJ Financial Services Ltd

Yang, Chief Analyst

2011.11.15

Once the news came out, the risk tolerance of the market substantially increased and the euro immediately rose across the board.  Up until the middle of the US trading day, the euro continued to rise into the heavens along with risky assets.  With the Euro’s rise throughout the day exceeding 1.30%, it can be seen that the market’s risk tolerance is continuing to heat up.

During the day, the rate on Italy’s ten year public bonds steadily fell below 7%.  France’s 10 year public bond rates fell as well, as the panic resulting from this past weekend’s events slowly subsided.  Before the American markets opened, Italy’s Senate smoothly passed the country’s 2012 budget, further increasing risk tolerance in the market and causing the European stock market and Dow Jones futures to begin a fast increase.  At the same time the American dollar index fell sharply, further strengthening the appreciation of the Euro.  The further increase of short-term positive news regarding the Euro is helping the currency to rally, making it a smart investment choice for the moment.

As Saturday and Sunday approached, Greece’s transitional government was established, with former European Central Bank Vice President Lucas Papdemos serving as Prime Minister.  After holding urgent meetings with many important politcal leaders from the different parties, Italian President Giorgio Napolitano officially appointed Mario Monti as Italy’s next Prime Minister, giving him the responsibility of establishing the country’s transitional government.

Silvio Berlusconi fulfilled his last commitments as Italian Prime Minister on Saturday (November 12), steadying the country’s financial situation by getting a tightened budget bill to pass in the House of Representatives. Berlusconi submitted his resignation after the bill was passed. As the 2012 Italian budget was approved over the weekend, Italy set up a provisional government and avoided early elections.  The market sentiment is expected to further improve early this week, temporarily bringing the chaos in Greece and Italy to a close.

The amount of data being released today is very small, with the the Eurozone Industrial Production numbers for September being released at 10:00. Currently, the Euro is set for the rebound with more bullish news. For now, when conducting market operations, be sure to pay attention to strict stop losses.

Euro short-term resistance
1.  1.3805
2.  1.3851
3.  1.3896
Strong resistance at 1.3950

Euro Short-term Support
1.  1.3745
2.  1.3700
3.  1.3680
Strong support at 1.3650

Special Note: Being Monday, there is not much data being released today.  The market sentiment is heavily guarded towards whether the U.S. Federal Reserve will implement more quantitiative easing policies as part of QE3.  The market is also highly concerned about the development of the situation in Greece and Italy.  For now, proceed with caution.

Important economic data being released today:

07:45 France September Current Account Balance

Previous Value of -29 billion euros
08:15 Switzerland October Producer / Import price index

Previous Value of -0.1% / month, -2.0% / year;

Market Impact ★
10:00 Eurozone Industrial Production in September

Previous Value of 1.2% / month, 5.3% / year;

Market Impact ★ ★

11:00 OECD Leading Indicator for September

The above information is given for reference purposes only.  Currency trading involves significant investment risk.  Careful analysis and selection is required.

英国ASJ国际金融

British ASJ Financial Services Ltd

Yang, Chief Analyst

2011.11.14