Daily Market Report 07/11/12

In the early hours of this morning, Barack Obama’s victory in the US 2012 presidential election was confirmed as he fought off competition from his Republican rival.

The marginal favourite’s re-election for a second term led to the some reactionary dollar weakness. Obama’s propensity to spend in order to boost the American economy paves the way for further easing policies, should they be needed.

As the US looks forward to its next four years under the president, the next key issue to tackle is the fiscal cliff, set to initiate at the start of next year. Though for now, the dollar weakness stems from renewed enthusiasm for riskier currencies.

Yesterday despite some quite terrible European data, including German Factory Orders showing contraction of 3.3%, and continuing uncertainty regarding Greece, the euro actually responded with some resilience as the US election’s veil of unpredictability ignored the fundamental issues.

Build up to Thursday’s ECB and BOE rate announcement will spark moderate interest, however today investors should keep a keen eye on Greece’s government debt crisis vote this morning, which will take a pivotal role in determining sentiment towards the euro.

Today Obama will dominate the headlines, and we expect the currency markets to be equally impacted by the continuation of the president’s term.

 

Today’s Key Announcements:
  • 10.00am – EUR – Retail Sales m/m: expected to be flat at 0.0%
  • 11.00am – EUR – German Industrial Production m/m: expected to contract by 0.4%
  • Tentative – EUR – Greek Gov Debt Crisis Vote
  • 18.00pm – USD – 10y Bond Auction

 

See previous Daily Market Reports