Futures

Markets have been moving on one thing and one thing alone which is the European sovereign debt crisis. There was quite a bit of volatility in the markets this morning, caused largely by the shifting sentiment in the financial markets. Interestingly enough, everything (Dow futures, EUR/USD and Greek CDS spreads) moved at the same time. The first chart shows intraday swings in Dow futures and the EUR/USD while the second chart shows the intraday volatility in Greek CDS spreads. Don’t expect this relationship to change anytime soon as investors in all markets take their cue from the euro.

Coming up Today (All Times GMT) GBP - MPC Interest Rate Statement (11:00) EUR - ECB Benchmark Rate (11:45) & Press Conference (12:30) CAD - Trade Balance (12:30) USD - Trade Balance & Jobless Claims (12:30) GAS - Weekly Storage Report (14:30)   EURUSD The EUR/USD pair lost some momentum on Wednesday following pessimistic comment from Ben Bernanke. The Fed Chairman expects some deceleration in US growth in the first semester but remains optimistic for the second half of the year. Meanwhile, the troika (UE, ECB, IMF) released its analysis of Greek Finance, concluding that current austerity measures aren’t achieving their objectives and need to be strengthened. Today, the ECB will hold its interest rate meeting and all eyes will look for a confirmation of a rate hike in July. If this move is confirmed, the EURUSD pair could extend its gains towards the $1.4700 resistance, while $1.4550 remains a major support. EURUSD Support/Resistance: 1.4550/1.4700 EURGBP Support/Resistance: 0.8880/0.8950 GBPUSD The Bank of England is expected to leave its benchmark rate unchanged at...