Fundamental Headlines
• Stress Tests Missed Debt at EU Lenders – Wall Street Journal
• Where’s the Appetite for Risk? – Wall Street Journal
• Euro Under Pressure and Treasury Yields Dip - Financial Times
• Unemployment in U.S> May Approach 10% as Economic Growth Remains “Feeble”- Bloomberg
• Gillard Set Form Australian Government After Winning Independent Votes – Bloomberg
EUR/USD: German factory orders in July unexpectedly fell 2.2 percent after climbing a revised 3.6 percent the previous month amid expectations of a 0.5 percent, while the annualized rate jumped 17.7 percent. Taking a look at the breakdown of the report, domestic orders contracted 0.3 percent. At the same time, foreign orders dropped a massive 3.7percent. Going forward, manufacturing will likely face major hurdles in the upcoming months as governments in the bloc tighten fiscal policy amid their high budget deficits. Yesterday, across the news wires, ECB governing council member Ewald Nowotny said that the central bank will not start discussing exit steps before December as the economic outlook shows high uncertainty. Also worth noting, there are rumors that European banks may have under reported their exposures to the sovereign debt crisis at the previous stress tests. In the currency markets, the EURUSD looks to have extended yesterday’s decline, and now looks poised to test the 100-day moving average for support as risk aversion looks to have regain its footing.
Written by Michael Wright, Currency Analyst
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Michael Wright is the author of FX Headlines, Fundamentals vs. Technical’s, Weekly Spotlight, and Forex Trading Weekly Forecast
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