Traders Morning Markets

By FX Empire Analyst - Barry Norman
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Asian markets are trading on bearish note eyeing weak global market sentiments along with diminishing signs of any solution to the eurozone debt crisis in the coming days.

Markets have yet had time to react to a "warning" from Moody's Investor Services on the downgrade of the EFSF. This is the fund that is set up to raise money for the EU to help bail out troubled countries. With the EFSF rating under watch, raising funds to bailout Spain and Italy will become more difficult and more expensive.

Also, markets are still reacting to the IMF halting funding to Greece and the ECB stopping the acceptance of collateral from Greece as the Troika meet in Athens to review Greece's austerity measures.

German has pledged to hold all financing until Greece keeps it's promises.

The US Dollar Index rose by 0.4 percent taking cues from negative global market sentiments and thereby rises in the risk aversion in the global markets which led to increase in the demand from low yielding currency. Rising concerns of the Euro zone debt crisis also added to the gains in the currency.

US equities declined in most part of the trading session taking cues from the bearish sentiments amongst market participants and speculation that Greece would not be able meet the set targets for reducing its debt.

However, with expectation that Federal Reserve policy makers might take steps to boost the economy led US stocks to trim losses towards the end of the session. The currency touched an intraday high of 84.25 and closed at 84.15 in yesterday’s session.

British Bankers' Association (BBA) Mortgage Approvals declined by 3,300 to 26,300 in June as against a rise of 29,600 a month ago.

Japan’s Trade Balance was at a deficit of 0.30 trillion Yen in June from previous deficit of 0.62 trillion Yen a month ago.

The euro declined 0.5 percent further for the second consecutive day in the week tracking reports of downgrade by the Moody’s, the credit outlook of Germany, Netherlands and Luxemburg amidst expectation that Greece would not be able to meet the set debt reduction targets by the European leaders.

Additionally, unfavorable data from the economy also exerted downside pressure on the currency.  The currency touched an intraday low of 1.204 and closed at 1.2059 in yesterday’s session.

French Flash Manufacturing Purchasing Managers' Index (PMI) declined by 1.6 points to 43.6-mark in July as against a rise of previous level of 45.2 in June. German Flash Manufacturing PMI declined by 1.7 points to 43.3-level in July as compared to previous level of 45 in last month.

European Flash Manufacturing PMI declined by 1 point to 44.1-level in current month when compared to previous rise of 45.1-mark in last month. Flash Services PMI rose by 0.5 points to 47.6-mark in July from previous level of 47.1 in June.

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