EU Summit In Focus
EURUSD fell by about 50 pips on Thursday after three consecutive days of gains. Day 1 of the EU summit did not offer much in terms of new developments (till the late hours of the New York session). Markets await the press conference with the EU leaders later today. According to the official agenda, topics under discussion include the growth compact, single supervisory mechanism and EC President Van Rompuy’s interim report on fiscal and economic integration. No decisions on Greece or Spain are expected but German Chancellor Merkel noted that Greek Prime Minister Samaras would give an interim report on the Troika’s discussions. News reports suggested that the EU leaders softened their call for implementing the single supervisory mechanism by year-end but committed to have a legislative deal in 2012. Earlier, GBPUSD pushed higher after UK retail sales rose 0.6% m/m in September (consensus: 0.3%) but retreated as sentiment suffered. Data in the US was mixed on Thursday. Jobless claims were up by 46k to 388k last week mainly due to seasonal factors. The Philadelphia Fed index jumped to 5.7 in October (consensus: 1.0) but the details were weak with the employment index down to -10.7 (from -7.3) and new orders index down to -0.6 (from 1.0). Risk appetite remained subdued during New York hours after weak Q3 earnings of some major US firms. Ahead today, markets will continue to focus on the EU summit where the leaders are expected to have their second working session from 8AM – 11AM (GMT), followed by a press conference. Also on tap today are the Canadian inflation report and US existing home sales data.
Click here to read the full report: UBS Morning Adviser Asia
UBS Investment Bank