Summary
The equity markets rallied as investors looked at Alcoa’s earnings and CSX comments as very strong for the markets. The S&P 500 rallied 19 points to close above the 50-day moving average to at 1095.
Tomorrow's Events
AUD
0:30
Westpac Consumer Confidence
July
-5.7%
GBP
8:30
UK Jobless Claims
-20K
-30.9K
EUR
9:00
EMU CPI
June
0
0.1%
EMU Industrial Production
1.2%
.8%
USD
12:30
Retail Sales
-.2%
-1.2%
14:00
US Business Inventories
May
.3%
.4%
18:00
FOMC Minutes
Trading Opportunities
EUR/USD
Moody’s downgrade of Portugal was not surprising to the markets. The 2-notch downgrade to A1 brings it in line with the way the market views Portugal. The credit agency adopted a stable outlook. Moody’s cited concerns about the deterioration of the fiscal situation over the medium term and questions about Portugal’s growth prospects if the structural reforms do not work over the medium term. The euro fell on the news to the session low near $1.2522 to record a five-day low but was able to bounce and close above 1.2700. The euro fully recouped the downgrade-inspired losses on the back of the better than expected Greek bill auction. Greece was returning to the market for the first time in several months seeking to sell 1.25 billion Euros of 26-week bills. The Euro closed above trend line support and should test resistance near 1.3000.
OIL
Oil prices rallied, as investors watched the dollar selloff and risk return to the commodity markets. Oil moved above $77 dollar a barrel and touched trend line resistance at $77.20. A close above this level will lead to a test of the $80 dollar level. Additionally, investors are expected another draw of inventories when the Department of Energy releases statistics on Wednesday.