Daily Market Report 12/09/12

The USD tumbled to monthly lows against all major currencies yesterday after rating’s agency Moody’s warned that it may cut the U.S.‘s credit rating, with expectations for more monetary easing from the Federal Reserve also played a part. The announcement from Moody’s indicated that it could potentially downgrade the U.S’s triple-A rating if budget negotiations for 2013 do not result in policy measures which will reduce the country’s debt.

Also, official data showed that the U.S. trade deficit widened to a seasonally adjusted USD42.0 billion in July from a downwardly revised deficit of USD41.9 billion in June. Analysts had expected a deficit of USD44.0 billion adding to more pressure on the Fed to alter their stance.In the UK yesterday, the Trade Balance played an influential part in the day’s trading as the figures released were better than expected. This is the first bit of good news that the UK has seen in while and sterling gained ground against the Euro and Dollar off the back of this through early trading.Looking ahead today, there are a few fundamental figures due that have the potential to move markets.

In Europe, we await for the EU to Announce Details of Banking Union. A final decision for the ECB’s bond buying program is what the markets are waiting to see. Whether the main German Constitutional Court will pass the reform is yet to be decided. German Chancellor, Angela Merkel and Olli Rehn, a member of the ECB have already changed their stance. This is what the markets has been waiting for and could finally shed some light on what is actually is about to happen in the Eurozone.

Fundamentals

07.00 EUR German Consumer Price Index (YoY) (AUG F) – came out better than expected at 2.1% from the expected 2.0%

07.00 EUR German Consumer Price Index - EU Harmonised (YoY) (AUG F) – came out expected at 2.2%.

08.00 EUR EU to Announce Details of Banking Union09.00 EUR German Constitutional Court Announces ESM Ruling

09.30 GBP Jobless Claims Change (AUG)

10.00 EUR Euro-Zone Industrial Production w.d.a. (YoY) (JUL) – expected weaker at -3.3% compared to -2.1%.

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