Daily Market Report 17/06/2013

The dollar has continued its recent trend against the Japanese yen, losing yet more ground on Friday afternoon towards the end of the European trading session. This ever increasingly important market indicator has fallen over 8% in the last 2 weeks. If we see a fall below 93.8 the major support levels will have been broken and the dollar’s weakness could continue.

Friday’s euro zone data was all roughly in line with expectations and hence movements against the dollar and the pound remained largely unaffected. The EURUSD exchange rate remains above 1.325. As we start a new week, Monday is predominantly empty with the G8 Summit in Belfast stealing the majority of the headlines. Albeit the summit will most likely focus on the atrocities in Syria and with international intervention seeming ever closer, European stocks will try to claim back some of the ground lost last week.

With all eyes on the US at the moment, the IMF’s annual review of the US economy has warned the Federal Reserve against winding down its QE scheme fearing that any scaling down would disrupt the financial markets. This recommendation may give investors hope that the markets could continue their recent bullish trend although with US consumer confidence and Consumer sentiment failing to meet expectations on Friday, this Wednesday’s Fed meeting and summary of economic predictions will be watched closely.

UK, US and euro zone inflation data on Tuesday will no doubt fuel the rumours surrounding the current market conditions and how the Japanese and US economies will manage to steer themselves through this recent volatility.

Key Announcements:

10.00am – EUR – Trade Balance (Apr): Trade surplus is set to reduce to €13.8bn.

13.30pm – CAD – Canadian Portfolio Investment in Foreign Securities: Expected to increase to CA$4.59bn.

13.30pm – USD – NY Empire State Manufacturing Index (Jun): Expected to improve to -0.50.