| Market Analysis Forex - 29 11 2011 |
 EUR/USD and CDSs of European nations fell after Italian Prime Minister Monti said he will propose more austerity measures this week to balance the country's budget by 2013. An unexpected increase in German consumer confidence boosted stocks after the Dec German GfK consumer confidence survey rose +0.2 to 5.6, stronger-than-expectations of -0.2 to 5.1, and its best level in 6 months. Undercutting the €UR and stocks was the ‘warning’ from Moody's that the "rapid escalation" of the crisis threatens all of the region's sovereign ratings, along with the action by the OECD to cut its 2011 GDP forecast for its 34-member countries to 1.9% from 2.3% predicted in May and to cut its 2012 GDP forecast to 1.6% from 2.8%, saying "the euro-area crisis represents the key risk to the world economy."Asian stocks advanced as exporters gained on the prospects for increased earnings after Black Friday retail sales in the US rose to a record. The OECD warned that Japan risks seeing a spike in government bond yields unless it controls a debt load set to approach 230% of GDP in 2013. Wall Street went ‘straight to the moon’ on hopes that fresh proposals could be emerging out of Europe to help solve the region's debt crisis. Retail stocks rallied after strong sales over the Thanksgiving holiday weekend, with the S&P retail index advancing 3.4%. Black Friday sales were almost $11.5bn, which would be the biggest USD amount ever for that day, according to ShopperTrak; who says sales were up 6.6% from the same day last year. The euro was trading stronger against the US dollar on Monday morning due to bullish attitude on Asian shares and on reports that that the IMF was preparing an aid package for Italy, however this report was not official and doubts were cast on the report. The common currency climbed from the 1.3220 support level up to the 1.3330 resistance level. |
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