TODAY FOREX IN REVIEW

While there is nothing new as far as bailout requests from Spain and Italy, there are a multitude of planned meetings throughout the week for Euro-area leaders. Greek Prime Minister is expected to speak with Jean-Claude Juncker of Luxembourg before pitching an extended time frame for implementing budget cuts. Disagreements are still abound and member countries are still squabbling as the North and South have proposed two different approaches to ending the crisis. Equity indices managed to hold onto gains with the Spanish IBEX rising 1.94% on Friday. The Italian MIB and Swedish OMX also closed stronger, rising 1.30% and 1.24% respectively. EURUSD is slightly lower at 1.2332.

The overnight session as proved mixed as movements in equity indices paint two different pictures. The Nikkei is leading higher, climbing 0.61% while the Australian ASX is marginally stronger, gaining 0.06%. The Hang Seng however is much weaker, trading -0.87% lower following speculation that the Chinese government will not be adding stimulus following weeks of anticipation. The added risk to cutting the reserve ratio is higher inflation which could make further monetary policy measures difficult. The recent rise in home prices show that the housing bubble is still a growing threat. Meanwhile, in Japan, Shirakawa's efforts to weaken the Yen have shown mixed success as the 1% inflation target proves elusive. USDJPY is unchanged at 79.560 while AUDUSD is shooting higher, adding 0.22%.

Optimism is still abundantly apparent in the U.S. market as analysts and economists alike see further strength in the recovery following a weak second quarter. The data due later this week includes durable goods orders and home sales data. Equity indices extended gains last week, with the Nasdaq strengthening 0.46%. The S&P 500 and Dow Jones Industrial Average each closed 0.19% higher. WTI crude oil continues its ascent as higher Middle-East tensions see prices at the highest level in months. Crude has risen 0.27% to $96.27 per barrel on continued uncertainty about unrest in Syria and rhetoric from Iran. Gold and Silver are also marginally higher while Copper declined -0.61% as speculation of further stimulus from China and the U.S. eases. Corn has moved back to the upside, rising 0.71% to $813 per bushel.
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