News & Analysis at your fingertips.

We use a range of cookies to give you the best possible browsing experience. By continuing to use this website, you agree to our use of cookies.
You can learn more about our cookie policy here, or by following the link at the bottom of any page on our site. See our updated Privacy Policy here.



Notifications below are based on filters which can be adjusted via Economic and Webinar Calendar pages.

Live Webinar

Live Webinar Events


Economic Calendar

Economic Calendar Events

Free Trading Guides
Please try again
Oil - US Crude
of clients are net long.
of clients are net short.
Long Short

Note: Low and High figures are for the trading day.

Data provided by
More View more
Real Time News
  • The non-farm payroll (NFP) figure is a key economic indicator for the United States economy. It is also referred to as the monthly market mover. Find out why it has been given this nickname here:
  • Knowing how to accurately value a stock enables traders to identify and take advantage of opportunities in the stock market. Find out the difference between a stock's market and intrinsic value, and the importance of the two here:
  • US indices have a packed week ahead with earnings from the major technology names, US GDP data due and an FOMC rate decision. With so much on the docket the potential for volatility is heightened. Get your stock market forecast from @PeterHanksFX here:
  • GDP (Gross Domestic Product) economic data is deemed highly significant in the forex market. GDP figures are used as an indicator by fundamentalists to gauge the overall health and potential growth of a country. Learn use GDP data to your advantage here:
  • The Federal Reserve System (the Fed) was founded in 1913 by the United States Congress. The Fed’s actions and policies have a major impact on currency value, affecting many trades involving the US Dollar. Learn more about the Fed here:
  • The US Dollar Index traded higher last week, sustaining its broader uptrend. Conflicting technical signals urge caution, but the directional bias remains skewed to the upside. Get your weekly USD technical forecast from @FxWestwater here:
  • Technical analysis of charts aims to identify patterns and market trends by utilizing differing forms of technical chart types and other chart functions. Learn about the top three technical analysis tools here:
  • The Australian Dollar still remains vulnerable as it extends losses against its major counterparts. What is the road ahead for AUD/USD, AUD/JPY, AUD/NZD and AUD/CAD? Get your AUD technical forecast from @ddubrovskyFX here:
  • The ISM manufacturing index plays an important role in forex trading, with ISM data influencing currency prices globally. Learn about the importance of the ISM manufacturing index here:
  • Take a closer look visually at the most influential global importers and exporters here:
Euro Strength Will Only Persist if Spanish Yields Stay Low

Euro Strength Will Only Persist if Spanish Yields Stay Low

Christopher Vecchio, CFA, Senior Strategist
Euro_Strength_Will_Only_Persist_if_Spanish_Yields_Stay_Low_body_Picture_5.png, Euro Strength Will Only Persist if Spanish Yields Stay Low

Fundamental Forecast for the Euro: Neutral

Based on the performance of the Euro the past two weeks, one would be led to believe that a good deal of the problems plaguing the single currency has been solved. While the EURUSD only rose by +0.52% the past five-days, it is trading up near a significant level of resistance that if triggered, could lead to another 300-pips or so in a very quick period. Indeed, the ascension from 1.2040/45 up to a few pips above 1.2400 was meteoric, but this was largely predicated around one development: the easing of sovereign debt yields in Italian and Spanish bond markets.

The range at which Italian and Spanish bonds yields traded in this week, especially on the shorter-end of the yield curve, was nothing short of astounding. But first, the more widely considered 10-year notes: the Spanish 10-year note yield traded as high as 7.435%, but settled the week lower at 6.848%; and the Italian 10-year note yield traded as high as 6.848%, a Euro-era record (again). On the shorter-end of the yield curve (which is in theory covered by the umbrella that are the European Central Banks three-year longer-term refinancing operations (LTROs), and thus more relevant as a gauge of investor sentiment given the additional liquidity cushion), the Spanish 2-year note yield from 5.445% to 3.958% by close on Friday.

These developments, particularly in the Spanish bond market, are the lynchpin to market stability going forward. After Spain requested (and received) €100 billion in aid for its banks, worries have arisen that the Spanish sovereign will need a full bailout itself. This is due to the fact that Spanish banks hold over half of all Spanish government debt; if one goes down, so too does the other.

But yields will not stay low on their own; as market participants demonstrated at the end of this week as exhibited by the Euro’s fickle price action, the European Central Bank needs to be behind any actions that will have a long tenured influence on keeping Euro-zone pressures calm. We think that this is possible, but we need to consider two items first.

First, Germany is not behind a full-scale bond buying program as evidenced this week at the European Central Bank policy system. President Draghi alluded to the fact that all but one policymaker was on board with doing “whatever it takes” to save the Euro; we coyly suggest that its Jens Weidmann, head of the Bundesbank (Germany’s central bank), and the most important policymaker outside of the president himself. Furthermore, last week, Wolfgang Schaueble, Germany’s finance minister, called rumors of a bond buying program to cap Spanish yields “speculation.”

Second, even if Spain applies for assistance from the two European bailout funds, the European Financial Stability Facility (EFSF) and its successor, the European Stability Mechanism (ESM), there’s little room for error on behalf of every other embattled European country: the Spanish bailout could sap all but €10 billion from both the EFSF and the ESM; this surely won’t be enough to bailout Italy, when the time comes (it will by early-2013, just as every other country before it has succumbed to the crisis).

Beyond paying attention to Italian and Spanish yields (mainly the Spanish 2-year note), there’s little by way of the European economic docket that’s worth paying much attention to. The second quarter Italian GDP reading is out on Tuesday, and a steep -2.5% year-over-year contraction is forecasted for the second quarter. If this print misses, we should expect the Euro to come back under pressure, at it will likely mean further austerity in Italy which could lead to further tensions in the bond market; as explained above, at current capacity, the EFSF and ESM can’t afford to bailout both Italy and Spain, as presently constructed.

In light of the careful balance the market is in right now – teetering between utter bliss at the notion of a European Central Bank sanctioned moratorium on high yields in Spain and sheer panic on the premise of bailouts for both Italy and Spain – we take a neutral but very cautious outlook on the Euro going forward. –CV

DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.