MORNING BRIEFING: Irish Austerity Plan Fails to Ease Fears

What’s new:
Forex: Euro struggles as debt woes deepen; Aussie falls ahead of US holiday
Global Markets: US stocks close higher ahead of Thanksgiving; Asian stocks edge up
Ireland: Reveal 4-year austerity plan
Germany: ECB’s Weber convinced euro will not succumb to debt crisis
Euro zone: Portuguese and Spanish bond spreads hit euro-lifetime high
Russia: Central Bank official says Russia adding CAD to its international reserves
United States: Sharp drop in jobless claims

Today:


Asian Rates & Indices:
EURUSD: 1.3361 - 1.3307
USDCHF: 0.9993 – 0.9944
GBPUSD: 1.5794 - 1.5744
EURJPY: 111.62 – 111.01
USDJPY: 83.58 – 83.40
DowJones: 11'187.28 +1.37%
NASDAQ: 2'543.12 +1.93%
S & P 500: 1'198.35 +1.49%
Nikkei: 10’079.76 +0.50%
Shanghai: 2’898.26 +1.34%
Gold: $ 1'370.60
Crude Oil: $ 83.64

Comments:
    
The US dollar edged up in Asian trading on talk of further China tightening and as tensions on the Korean peninsula continues to create headlines. The rise in US Treasury yields due to lack of liquidity ahead of the Thanksgiving holiday, also benefited the dollar.

The euro remains under pressure, close to a 2-month low, as concerns that the euro zone debt crisis may spill over from Ireland to other countries increase. Dublin unveiled an ambitious austerity plan Wednesday; however the plan came under scrutiny, as believed to be too optimistic.

Portugal and increasingly Spain are seen as potentially next in line to seek help, with the yield spread of their government bonds over benchmark German Bunds hit a euro-lifetime high on Wednesday.

The greenback was also supported by strong US data showing a drop in weekly jobless claims to 2-year lows and another increase in consumer spending, lifting hopes of a stronger US recovery.

The Australian and New Zealand dollars fell yesterday versus the greenback. After an initial rise sparked by Wall Street gains, position adjustments ahead of Thanksgiving holiday, uncertainties over Chinese measures and selling by Japanese investors hurt the high-yielding Aussie and kiwi, while the Canadian dollar was seen supported by the rise in oil prices.

ECB Governing Council member Axel Weber was looking to ease fears on Wednesday saying he was convinced the single currency would survive and that a financial safety net created by euro zone governments would be enough to withstand speculators. Meanwhile a Russian Central bank official told Bloomberg that Russia has started adding Canadian dollars to diversify their international reserve portfolio.

Good Day,

Emman Xuereb
Trading Desk
RTFX Ltd
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