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Eurozone M3 Tops Expectations in August
Written by article default Monday, 27 September 2010 11:42
Fundamental Headlines
• U.S. Stocks Get Pre-Election Boost – Wall Street Journal
• ‘Mr. Euro’ Was Forced to Act – Wall Street Journal
• Japan Looks at $55Billion Stimulus Package - Financial Times
•U.K. House Prices Decline the Most in 18 Months, Hometrack Says - Bloomberg
• Chinese Property Bust Is Morphing Into a Slow Leak: Andy Xie – Bloomberg
EURUSD: Eurozone M 3 money supply in August topped expectations as figures rose 1.1 percent from a year ago amid economists’ forecasts of 0.3 percent. Taking a look at the breakdown of the report, the M1 money supply slowed to 7.7 percent from 8.1 percent in July, while the M2 component climbed 2.0 percent in August. Today’s advance marks the highest reading since September 2009 as the recovery in the bloc gains momentum. It is also worth noting that the 3 month average also advanced in August. Indeed, the euro will likely advance against the U.S. dollar in the near term, but will likely come back under pressure in the first quarter of 2011 as governments implement tough austerity measures in order to battle their ballooning budget deficits. This will In turn weigh on growth in the 16 member euro area. In the currency markets, the EURUSD looks to have pared yesterday’s advance as the pair trades in overbought territory and reverses from the 50.0 percent Fibonacci retracement on the December 2009 to June 2010 downswing.
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