By FX Empire.com
Broad markets rebounded today after confidence was boosted by a German-French agreement to expand the region’s rescue fund which fueled hopes that European leaders will be able to contain the region’s debt crisis soon.
Hopes of a solution to the European debt crisis overshadowed Moody’s downgrade to Spain’s rating for the third time since June 2010 by two levels to A1 from Aa2, and said that France’s top-notch credit rating is under pressure.
Stocks rallied today although Apple joined Goldman Sachs and released disappointing quarterly results for the first time since 2004. Today Morgan Stanley is set to release its Q3 results before the start ofU.S.session.
The progress on the debt plan that could be expanded to 2 trillion euros managed to push the MSCI Asia Pacific Index up by 0.9%. InEuropethe FTSE 100 rose as of this writing 0.92%, DAX rose 1.11% and CAC 40 rose 0.89%.
Although risk appetite was dominant today, since uncertainties surrounding the global outlook remain high, sentiment is believed to remain fragile and caution may push investors towards safe haven at any moment.
Today UK released BoE’s minutes for Oct. 6 meeting, indicating that the vote to keep rates unchanged at record low and expand the asset-purchase program to 275 billion pounds from 200 billion was unanimous.
This vote confirm that the economic activity in UK may be worse that previously believed, and although inflation rose to record high policy makers are forced to continues find ways to stimulate the economy to avoid a new recession.
Europe released today a disappointing current account report for Aug. and a fall in construction output also for Aug. Meanwhile the U.S. will release today its CPI for Sep. along with the housing starts and Beige Book economic survey.
As demand for safe haven lessened the dollar index is trading as of this writing around the 76.63 level which is also the lowest for the day so far, while the yen is trading around the 76.76 level, and gold is trading around $1653.00 per ounce.
The euro gained today trading around 1.3860 and the GBP as well trading around 1.5815. The AUD is trading around 1.0349, while oil is trading around $88.60 per barrel on believes demand may improve if the debt crisis will be solved.
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