The Greek debt saga continues to evolve slowly, with the latest attention focused on Merkel’s challenge in passing the EFSF vote through Germany’s parliament. The ballot is scheduled to begin at 9am GMT today and we believe the vote should pass without incident; after all, the opposition have already pledged their support and the market’s interest in this event seems to be exaggerated by the demand to see political unity from within the Eurozone’s most influential member. Encouragingly, the EFSF expansion vote has already successfully been passed in Finland’s parliament, and PM Katainen assured that collateral demand discussions would be resolved within the coming days to weeks.
Perhaps the most controversial news item over the past 24-hours has been the suggestion that the EU impose a Europe-wide financial transaction tax which would take effect in 3 years. The UK has already voiced its strong opposition to any such legislation – unsurprising considering BBC reports that over 80% of revenues from such a tax would come directly from London.
Overnight, Japan released its August retail trade data, and results significantly undershot market expectations. Consumption contracted -1.7% MoM, -2.6% YoY, compared to forecasts expecting a more benign +0.2% MoM, -0.8% YoY reading. Large retailer sales were also disappointing at -2.6%, down from +0.8% last month.
For the time being equity markets are cautiously stable, with mixed performances in the Asian region. The Nikkei is up +1.0%, but in contrast the Hang Seng is down -0.7% and Shanghai Composite -0.8%; meanwhile European equity futures are pointing to a slightly lower open. EURUSD is back above 1.3600 at the start of the European session, but with currency movements remaining sensitive to European news and rumours, the price action could be erratic today.
Coming up in today’s session, the economic calendar picks up with Swedish and Norwegian retail sales, Eurozone consumer confidence, US pending home sales, and the third and final reading US GDP.
Perhaps the most controversial news item over the past 24-hours has been the suggestion that the EU impose a Europe-wide financial transaction tax which would take effect in 3 years. The UK has already voiced its strong opposition to any such legislation – unsurprising considering BBC reports that over 80% of revenues from such a tax would come directly from London.
Overnight, Japan released its August retail trade data, and results significantly undershot market expectations. Consumption contracted -1.7% MoM, -2.6% YoY, compared to forecasts expecting a more benign +0.2% MoM, -0.8% YoY reading. Large retailer sales were also disappointing at -2.6%, down from +0.8% last month.
For the time being equity markets are cautiously stable, with mixed performances in the Asian region. The Nikkei is up +1.0%, but in contrast the Hang Seng is down -0.7% and Shanghai Composite -0.8%; meanwhile European equity futures are pointing to a slightly lower open. EURUSD is back above 1.3600 at the start of the European session, but with currency movements remaining sensitive to European news and rumours, the price action could be erratic today.
Coming up in today’s session, the economic calendar picks up with Swedish and Norwegian retail sales, Eurozone consumer confidence, US pending home sales, and the third and final reading US GDP.
By
M.Zohaib Gadit
Forex Trading Consultant
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