Daily Market News 21 July 2011 Yesterday’s market movers In Germany we had Producer Price Index YoY June come out better than the expectation, which push the euro gaining against US dollar. The main focus of the day was Bank of England Minutes, which gave out the vote result of the interest rate change decision – 2 to 7 in favour of keeping the interest rate unchanged. Sterling picked up its position against US dollar after the news was released, pulling back to the 1.61 level. Yesterday’s market movers In Germany we had Producer Price Index YoY June come out better than the expectation, which push the euro gaining against US dollar. The main focus of the day was Bank of England Minutes, which gave out the vote result of the interest rate change decision – 2 to 7 in favour of keeping the interest rate unchanged. Sterling picked up its position against US dollar after the news was released, pulling back to the 1.61 level. Later in the US we had the housing data with a negative figure for June. Existing Home Sales fall to 7-month low. This further devalued the dollar hence we saw Euro staying around 1.42 in spite of the worse than expected EU Consumer Confidence later on. Today’s market movers EU EcoFin is continuing their meeting where we are expecting further solutions to be found to avoid a contagion enveloping Italy and Spain. This morning we have had support from the German and French agree to make effort on it and supported the euro for 0.4% early morning. Germany PMI Services/ Manufacturing July are expected to drop in comparison of previous performance, which might indicate a slowdown of the economy. Euros will probably dip down on the back of the negative PMIs. UK Retail Sales June is predicted to decline slightly from last month. However, Retail Sales ex-Fuel is estimated to grow from the previous. This figure is considerably important for indicating the economy in UK. If we have positive retail sales today, the pound could have a modest support. At the same time, UK Public Sector Net Borrowing is to be shrunk according to the market consensus. This could be another positive support for Sterling. In the US, Philadelphia Fed Manufacturing Survey July is expected to be better and Leading Indicators is to be worse. Again, the weak dollar from yesterday will probably need a stronger support such as the solution for US debt ceiling crisis to gain back its lost.