by Collinson FX
Pic of the Day Porto Cervo, Audi Melges 32 European Championship 2012
Collinson FX market Commentary: July 2, 2012
Markets surged at the close of the week with some positive news from the EU summit. Member nations acted decisively to solve the Banking crises enveloping Spain and other EU Banks.
The decision was to use the bailout funds (EFSF and ESM) to directly fund the banks instead of filtering it through the Sovereign nation. This avoided any conditions in terms of austerity to Spain in particular. This directly contravenes all EC rules but I guess they are there to be broken. Members also decided to launch a stimulus package directly funding growth packages.
Equity markets surged across Europe and the US with the perceived solution to the crises. It seems that more debt and borrowing is the solution to the debt/deficit crises!? US markets rallied strongly with the surge of confidence despite some weak economic data.
Consumer Sentiment fell as did the Chicago PMI. Commodities took advantage of the rise in confidence and associated currencies rallied strongly.
The AUD surged to 1.0240 and the KIWI tested just under .8000. This week we will focus back on economic data with the EU Summit behind us. A particular focus will be the various employment reports out during the week in the US.
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