Video | Agriculture | Confidence | Economy | Energy | Employment | Finance | Media | Property | RBNZ | Science | SOEs | Tax | Technology | Telecoms | Tourism | Transport | Search

 

EURUSD – coming into the eye of the storm?

EURUSD – coming into the eye of the storm?

Risk aversion was evident for all to see overnight, with the euro falling heavily relative to the USD, CHF and JPY. We continue to advocate selling rallies although with EUR/USD at the bottom of its recent range, and we may see sovereign funds stepping in and supporting below 1.41. Support on the pair can be found at 1.4055 (the August 5 low), while the 200-day moving average at 1.4016 comes in two pips above the July 17 low. So, from current levels, we will need to see a further deterioration in European issues to view a sustained break below 1.40. Sentiment is shocking at present, and while it feels like we are in the eye of the storm, there are signs that perhaps this is only just started. Europe last night showed that on a composite level, manufacturing PMI’s are in contractionary territory for the first time since 2009. This must now affect the ECB’s future policy response, and perhaps we could hear of a more neutral stance from the ECB in its September meeting. Italian yields are under huge pressure and have moved higher eleven days in a row, and are worryingly 368 basis points above German bunds. There is concern that Italy will not meet their official growth forecasts of 1.1% this year and could also be downgraded by Moody’s. The country’s President Mr Napolitano said that the alarming widening of Italian sovereign spreads over bunds cannot be ignored, and said it shows the urgent need to regain market confidence. Greek two-year yields pushed up to 50% overnight on the premise that the country may struggle to get its next tranche of aid. Given German Chancellor Merkel’s disastrous ratings over the weekend in the polls, it is clear the public has vented its full anger at the politician responsible for handing over its taxes to Greece, Portugal and Ireland. Tonight sees European GDP (expected to gain 1.7% year-on-year) and German factory orders, while the US services ISM could see further downside in risk assets if lower than expected.

ENDS

© Scoop Media

 
 
 
Business Headlines | Sci-Tech Headlines

 


FIRST Union: Do Shareholders Realise Marsden Point Conversion Could Cost More Than Half A Billion Dollars?

FIRST Union, the union representing workers at Refining NZ, are querying whether shareholders voting on Friday on whether to convert the Marsden Point refinery to an import-only terminal realise the conversion could cost $650-700 million dollars... More>>



Civil Contractors: Massive Rebound In Civil Construction Business Confidence

New Zealand’s civil construction industry is riding a massive rebound in post-pandemic business confidence – but this may be undermined by skills shortages, which continue to be the industry’s number one challenge... More>>



Energy: Feeling Our Way Towards Hydrogen - Tina Schirr

Right now hydrogen is getting a lot of attention. Many countries are focusing on producing hydrogen for fuel, or procuring it, or planning for its future use... More>>


Transport: July 2021 New Vehicle Registrations Boosted By EV Rebate Scheme
Motor Industry Association Chief Executive David Crawford says that July 2021 sales of new vehicles were boosted by the recently introduced rebate scheme. July 2021 registrations were 15,053 units compared to 12,263 units for July 2020... More>>



ASB: New Support Finder Tool Helps Connect Customers With Thousands In Government Support

ASB research alongside benefit numbers from the Ministry of Social Development shows an increased number of Kiwis are struggling financially, and many may not be aware they’re eligible for government support... More>>


Housing: New Home Consents Continue To Break Records

A record 44,299 new homes were consented in the year ended June 2021, Stats NZ said today. “The annual number of new homes consented rose again in the June 2021 year, the fourth consecutive month of rises,” construction statistics manager Michael Heslop said... More>>