Daily review 12/06/12
Declines recorded in Asia today (Tuesday), after a reversal trend in Europe and on Wall Street during yesterday’s trading session following the rapid disenchantment of investors optimism after the announcement of the rescue package to banks in Spain.
New - York trading opened yesterday in prices increases but closed in negative.
Wall Street closed in prices decrease yesterday, after the positive sentiment in light of the rescue package for Spain dissipated, and after the news that the vice chairman of the Spanish central bank resigned and the yield on Spanish bonds continued to rise.
One of the reasons that cause investors to panic in global markets from the rescue plan to banks in Spain, is a simple question: from where the money will come?
Regarding the debt crisis, more important is what the bondholders think about the issue, than what investors think.
In the case of Spain, there was a concern among many investors - selling Spanish and Italian bonds from the beginning of this week, raising the Spanish bond yields of 10 years to over 6.4%.
Spanish bond yields rose yesterday by 23 basis points to 6.42%, while many wonder whether the money for the rescue package will come from- European stabilization mechanism (ESM) or the temporary rescue fund (EFSF).
After approval of the rescue package to banks in Spain, European spotlight moves to the third-largest economy on the continent: Italy.
Many believe that Italy, which holds government debt of 2 trillion euros and higher bond yields (ranging around 5-6% in recent months), will eventually need outside assistance in order to serve its debts.
DOW 1.14% ↓ S&P 1.26%↓ NSDQ 1.70%↓
EUR / USD:
EUR/USD trading at -1.2481 an increase of 0.02% in writing.
The pair may find support at 1.2447 today low and resistance at- 1.2505 today high.
Meanwhile, the Euro gain strength against the British Pound and against the Japanese Yen, when the -EUR/GBP add a 0.09% to 0.8067 and –EUR/JPY add 0.20% to 99.35.
The British Pound weakens against the U.S Dollar today, trading at 1.5471 a decrease of 0.07%.
The pair may find support at 1.5429 Thursday low and resistance at 1.5535 Friday high.
Meanwhile, the British Pound weakens against the Euro and gain strength against the Japanese Yen, while the EUR/GBP add a 0.09% to 0.8067 and the GBP/JPY add 0.10% to 123.11.
The U.S Dollar weakens against the Canadian Dollar today, trading at 1.0300 a decrease of 0.15%.
The pair may find support at 1.0259 Friday low and resistance at 1.0324 today high.
Meanwhile, the U.S Dollar weakens against the Euro and gain strength against the British pound, while the EUR /USD add 0.02% to 1.2481 and the GBP/USD drop 0.07 to 1.5471.
WTI- Crude Oil:
The WTI weakens today, trading at 81.75 a decrease of 1.08%.
May find support at 81.08 Monday low and resistance at 82.19 today high.