Euro breaks resistance
The EUR/USD has made a break higher through resistance, which we acknowledged earlier. The next level higher is 1.32173.
Eurozone Retail Sales (Dec) -0.4% vs 0.3% expected.
ECB’s Costa speaks in Lisbon.
- Europe has been the center of the crisis in the past three years.
- Euro area’s fundamentals are stronger than the U.S.
- Initial response of EU leaders was slow.
- Important steps taken in the last few months.
- Systemic risk is affecting the Euro area and threatening the single currency.
- Portuguese banks have shown remarkable resilience during the crisis.
UK Services PMI (Jan) 56.0; better than the 53.5 expectation and 54.0 prior showing.
Sterling firmer on the release.
China’s Premier Wen says China has no ability, or intentions, to “buy Europe”.
Euro lower on the release.
Eurozone Services PMI (Jan) 50.4 vs 50.5 expected.
German Services PMI (Jan) 53.7 vs 54.5 expected.
French Services PMI (Jan) 52.3 vs 51.7 expected.
Italian Service PMI (Jan) 44.8 vs 45.1 expected.
Greece sees its 2011 budget deficit at 9.1%-9.4% GDP, slightly smaller than the previous estimate.
Not much going on as the market waits for U.S non-farm.
The FTSE, CAC, and DAX are down slightly with not much going on in the market until the Eurozone final services PMI release in a little over 30 minutes. We are seeing a wedge in the EUR/USD as the pair trades around the 100 hour moving average. As we move later in the night we’ll see weather it is support or resistance that holds.
Spanish Services PMI (Jan) 46.1 vs. 43.0 expected (42.1 prior).
IMF’s Shinohara says talks on boosting IMF firepower need to proceed at the same time as talks to boost Eurozone firewall.



