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| EURO/USD Charts To New York Session Open Market |
European Shares Soar. European stocks recovered on Tuesday after being pressured by the panic selloff the day before due to political and economic anxiety in Spain and Italy. Spanish bond yields on the 10-year tenor soared to the highest level not seen since December amid a corruption scandal that befell Spanish Prime Minister Mariano Rajoy and the ruling party in parliament. In Italy, former Prime Minister Silvio Berlusconi also promised to change the conservative fiscal policies currently running in Italy if the young re-elected as Prime Minister of Italy in the upcoming elections.
Although there are still problems in Spain and Italy, many European composite index managed to rise due to investor optimism that the President of the ECB, Mario Draghi still provide a second bailout troubled country with unlimited OMT program. As a result, European financial markets stabilized on Tuesday, with the yield on Spanish 10-year tenor edged 0:02 percentage points to a level of 5:44% while Italian bond was flat at the level of 4:47%. Furthermore, investors will waiting for the meeting BoE and ECB monetary policy in recent weeks.
5 Important News Update Coming to New York Session Open Market
Although there are still problems in Spain and Italy, many European composite index managed to rise due to investor optimism that the President of the ECB, Mario Draghi still provide a second bailout troubled country with unlimited OMT program. As a result, European financial markets stabilized on Tuesday, with the yield on Spanish 10-year tenor edged 0:02 percentage points to a level of 5:44% while Italian bond was flat at the level of 4:47%. Furthermore, investors will waiting for the meeting BoE and ECB monetary policy in recent weeks.
5 Important News Update Coming to New York Session Open Market
- Market Tone: Negative sentiment that was seen in the Asian session turned positive since the European session due to Euro zone PMI services report a positive plus the announcement of the resignation of BoJ Governor Masaaki Shirakawa on March 19. EURUSD rebounded more than 90 points after the data reported PMI services, while USDJPY test the psychological level of 93.00. Resignation of Mr. Shirakawa even considered would facilitate an accommodative monetary policy in Japan that spurred appreciation USDJPY 95.00 up to the top level.
- EU Recovery: Euro zone economy back show reversal direction, after the PMI composite data that measures business activities of thousands of companies in the Euro zone suggest rising for 3 consecutive months after reaching the bottom level in the month of November. These developments have helped to stabilize the euro zone bond yields as investors slow the economic recovery.
- Earnings Report: The focus of investors will be focused on earnings reports that Walt Disney is expected to remain flat compared to the prior year due to increased costs for the purchase of sports broadcasting rights and the decline in home video sales. In addition, the investors will also await earnings reports Panera and Chipotle, as well as online gaming company Zynga.
- UBS: Attention will then be focused on the Swiss bank, UBS plans to cut 10,000 employees and closed its Fixed Income business unit. Furthermore, market participants will consider private banking unit of UBS's expected will be the company's main revenue source is the future.
- Economic Data: In economic terms, as well as the annual budget report followed the economic outlook and revenue expenditure targets for 2014 will attract the attention of investors, followed by the U.S. services sector data for the month of January are predicted to fall slightly to 55.3 compared to 55.7 previously. Decline in the index is limited because of construction sector is expected to increase rapidly and sustain the overall services sector index.
UBS CEO : Interests risk being Very Low
UBS CEO Sergio Ernotti, complained about the lack of investor appetite for risky assets investment in recent times. UBS is now focusing its business on a managed fund management clients and evaluate the effectiveness of trading, the business closed its fixed-income investments. "Risk appetite is very poor clients, as well as interest rate margins," said Ernotti. The CEO admits that they have to look at customer activity before determining the next step. Sentiment biggest influence investment interest capitalists focused on political and economic conditions in some countries, such as the issue of the U.S. fiscal gap at the end of 2012. If this year there were similar issues, the UBS business profit margin is predicted to shrink significantly.
Internally, Ernotti claimed it had learned a lot from Libor scandal in 2012. Due to the problem, the company had reached $ 1.5 billion to pay the fine set by the financial authorities. UBS guarantee will no longer appear similar problems in the future because the directors have evaluated the performance and operational standards. UBS recently posted a loss of 1.9 billion Swiss francs or the equivalent of $ 2 billion in the fourth quarter of 2012 or further than previous year performance. In 2011, banking institutions are successful profit of 323 million francs various lines of business. "You have to deal with the new issues that hit the financial sector, therefore we want to make sure that we are strong enough capital safe," said Ernotti. UBS has strengthened its capital ratios in accordance substance Basel III, at about 9.8% at the end of this year. "We will have a progressive dividend policy this year," added Ernotti.
Negative sentiment in Asia Session Turned Direction In London Opening
PMI services report and the announcement of the resignation of BoJ Governor Masaaki Shirakawa on March 19 has helped turnaround in sentiment traders who previously negative to positive in the European session. This change in sentiment has fueled EURUSD rebound to 1.3537 level, rose nearly 90 points after the final data released Eurozone PMI rose to 48.6 compared to 48.3 previously. Euro zone service sector is still in contraction territory, but managed to have increased for three consecutive months after reaching its bottom level at 46.00 last November. This report helped trigger the stability of the bond market as investor relief over the sustainability of the recovery rate of the euro zone.
Separately, a surprise announcement that Mr. Shirakawa will step down earlier than expected has sparked buying USDJPY pairing. Mr. Shirakawa rated as officials opposed the plan Prime Minister Shinzo Abe to make a reflation of the Japanese economy and weaken the Japanese Yen. Therefore, the resignation of Mr. Shirakawa will pave the way BoJ monetary policy more accommodative and potentially trigger a rally USDJPY target 95.00 key resistance levels as traders respond to changes in policy Prime Minister Shinzo Abe.
BoJ's Shirakawa worsen Performance Yen
Continued weakening yen after Bank of Japan Governor Masaaki Shirakawa, announce resignation faster than it should. BoJ's Shirakawa plans to abandon his position as head of the Bank of Japan on March 19;'s three weeks ahead of time his tenure ended on 8 April. USD / JPY is now trading 92 950, away from the daily low of 91,966. "I want to resign on March 19 when the office of the deputy governor of the BoJ other two ends," said BoJ Governor Shirakawa who hopes the new can be installed in conjunction with the other two deputy governors. Shirakawa has submitted his resignation letter to Prime Minister Shinzo Abe. This means that Abe will be able to speed up the ambition to push BoJ take a more active policy by issuing the Japanese economy from the brink of deflation. Abe has now had the opportunity to form a new BoJ governor and two appointed Deputy Governor in mid-March.
Suspend UK Service Sector Sterling
Sterling rose on the London session after data provide services sector hopes UK can avoid recession economy. UK service sector index rose to 51.5 for the month of January; better than predicted 49.5 and 48.9 the previous publication. GBP / USD is now trading 1.57865, away from the daily low of 1.57258. The UK economy contracted in the last quarter back in 2012 after getting out of the recession in early 2012. There are fears the UK could re-experience a recession amid tight government budget cuts, weak domestic demand and global economic uncertainty. Candidates for the next BoE Governor, Mark Carney, has suggested the idea that the central bank adopted GDP as a target in order to maintain the sustainability of the economic recovery. However, some officials feel BoE inflation target changes to GDP would only complicate monetary policy transmission.
UBS CEO Sergio Ernotti, complained about the lack of investor appetite for risky assets investment in recent times. UBS is now focusing its business on a managed fund management clients and evaluate the effectiveness of trading, the business closed its fixed-income investments. "Risk appetite is very poor clients, as well as interest rate margins," said Ernotti. The CEO admits that they have to look at customer activity before determining the next step. Sentiment biggest influence investment interest capitalists focused on political and economic conditions in some countries, such as the issue of the U.S. fiscal gap at the end of 2012. If this year there were similar issues, the UBS business profit margin is predicted to shrink significantly.
Internally, Ernotti claimed it had learned a lot from Libor scandal in 2012. Due to the problem, the company had reached $ 1.5 billion to pay the fine set by the financial authorities. UBS guarantee will no longer appear similar problems in the future because the directors have evaluated the performance and operational standards. UBS recently posted a loss of 1.9 billion Swiss francs or the equivalent of $ 2 billion in the fourth quarter of 2012 or further than previous year performance. In 2011, banking institutions are successful profit of 323 million francs various lines of business. "You have to deal with the new issues that hit the financial sector, therefore we want to make sure that we are strong enough capital safe," said Ernotti. UBS has strengthened its capital ratios in accordance substance Basel III, at about 9.8% at the end of this year. "We will have a progressive dividend policy this year," added Ernotti.
Negative sentiment in Asia Session Turned Direction In London Opening
PMI services report and the announcement of the resignation of BoJ Governor Masaaki Shirakawa on March 19 has helped turnaround in sentiment traders who previously negative to positive in the European session. This change in sentiment has fueled EURUSD rebound to 1.3537 level, rose nearly 90 points after the final data released Eurozone PMI rose to 48.6 compared to 48.3 previously. Euro zone service sector is still in contraction territory, but managed to have increased for three consecutive months after reaching its bottom level at 46.00 last November. This report helped trigger the stability of the bond market as investor relief over the sustainability of the recovery rate of the euro zone.
Separately, a surprise announcement that Mr. Shirakawa will step down earlier than expected has sparked buying USDJPY pairing. Mr. Shirakawa rated as officials opposed the plan Prime Minister Shinzo Abe to make a reflation of the Japanese economy and weaken the Japanese Yen. Therefore, the resignation of Mr. Shirakawa will pave the way BoJ monetary policy more accommodative and potentially trigger a rally USDJPY target 95.00 key resistance levels as traders respond to changes in policy Prime Minister Shinzo Abe.
BoJ's Shirakawa worsen Performance Yen
Continued weakening yen after Bank of Japan Governor Masaaki Shirakawa, announce resignation faster than it should. BoJ's Shirakawa plans to abandon his position as head of the Bank of Japan on March 19;'s three weeks ahead of time his tenure ended on 8 April. USD / JPY is now trading 92 950, away from the daily low of 91,966. "I want to resign on March 19 when the office of the deputy governor of the BoJ other two ends," said BoJ Governor Shirakawa who hopes the new can be installed in conjunction with the other two deputy governors. Shirakawa has submitted his resignation letter to Prime Minister Shinzo Abe. This means that Abe will be able to speed up the ambition to push BoJ take a more active policy by issuing the Japanese economy from the brink of deflation. Abe has now had the opportunity to form a new BoJ governor and two appointed Deputy Governor in mid-March.
Suspend UK Service Sector Sterling
Sterling rose on the London session after data provide services sector hopes UK can avoid recession economy. UK service sector index rose to 51.5 for the month of January; better than predicted 49.5 and 48.9 the previous publication. GBP / USD is now trading 1.57865, away from the daily low of 1.57258. The UK economy contracted in the last quarter back in 2012 after getting out of the recession in early 2012. There are fears the UK could re-experience a recession amid tight government budget cuts, weak domestic demand and global economic uncertainty. Candidates for the next BoE Governor, Mark Carney, has suggested the idea that the central bank adopted GDP as a target in order to maintain the sustainability of the economic recovery. However, some officials feel BoE inflation target changes to GDP would only complicate monetary policy transmission.
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