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Market View

Spain kept its investment-grade credit rating....

Thursday, October 18, 2012 3:50 AM GMT

Good Morning ,


- The euro strengthened to a one-month high against the dollar after Spain kept its investment-grade credit rating from Moody’s Investors Service before European leaders gather tomorrow for a two-day summit in Brussels.

-  Moody’s said yesterday it kept Spain’s credit rating at Baa3, one step above junk, as the risk that the nation would lose market access had fallen because of the European Central Bank’s willingness to purchase its bonds.

- Spain’s 10-year bond yield fell as much as 34 basis points to 5.46 percent, the lowest since April 4, while Italian 10-year yields declined to the least since March 19.

- The Dollar Index (DXY) dropped for a second day as housing starts jumped 15 percent to an 872,000 annual rate last month, the most since July 2008 and exceeding all forecasts in a Bloomberg survey of economists

- The dollar weakened versus all of its major peers as U.S. housing starts rose to a four-year high last month, damping demand for safer assets. The 17-nation euro appreciated for a fifth day versus the yen as Spanish and Italian bonds rallied.

- Germany is open to Spain seeking a precautionary credit line from Europe's rescue fund, 2 senior coalition lawmakers said, signaling a reversal of Finance Minister Schauble's public position

- Finnish PM Katainen: sees a "precautionary" credit line for Spain, not a "full" rescue

- Options traders are the least bearish on the euro versus the dollar in more than two years.

- EU summit to tackle banking union; Spain on watch

- German FM Schaeuble says must help troubled countries help themselves.

- PM Rajoy : Spain will stick to its commitments.

- EU'S Juncker: Sees Spain and Greece on a 'good path', and says Greece will stay in the euro zone.

- U.S. Stocks Rise as Strong Housing Data Overshadow Intel, IBM bad earnings results


- ‘Safe-haven’ currencies like the USD and JPY were broadly sold in favour of the NZD, AUD, and EUR.

- The GBP/USD pair was well supported throughout the session by broad based risk on EURophoric sentiment, as well as by the release of rather “hawkish” minutes from the BoE and an encouraging jobs report from the UK. What is more, Sterling jumps as U.K. unemployment rate dips below 8%


- Standard & Poor's cuts Cyprus to B from BB and warns further downgrades possible. Market doesn't care.

- Australian dollar was today's top performer, gaining against all major currencies. AUD up 1.06% vs. USD.  RBA's Edey says Australian financial system, economy remain favorable.

- Improved sentiment in European sovereign debt, exceptional US housing starts data and NZD (‘kiwi’) continued the Uptrend over USD after also, a Strong Fibonacci Bounce

- Some focus on round 2 of debate between Pres Barack Obama and Mitt Romney. Mitt Romney, in second debate with Pres Barack Obama in NY, said Pres Obama refuses to label China a currency manipulator. China has not played by rules.

- Australian : RBA appears poised for further interest rate cuts, as sputtering global growth and falling commodity prices undermine its formerly optimistic outlook for the economy.

- Economists are expecting RBA to cut interest rates on Melbourne Cup day next month (Nov 6), while financial markets, including global bond house Pimco, are anticipating the official cash rate will fall to near 2% in the next 12 months.

- DJ sources: BOJ starts considering additional monetary easing kyodo

- Oil holds at $92 as supply rises, dollar falls.


Have a nice day !

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