Market News

USD/CAD holds below earlier highs, printed after the release of a weak Canadian CPI data. CPI fell 0.7% in June and rose 3.1% on year-to-year base. Rate retreated from C$0.9530 to current C$0.9492.

The S&P 500 remains near the neutral line, even though the tech sector has pushed its way up to a 1.0% gain. Meanwhile, the Nasdaq is sitting at its session high, sporting an enviable gain.

GBP/USD continues to hold within the narrow range a bit lower daily highs. Rate currently holds around $1.6311 in thin market. Resistance remains at $1.6340.

The Wall Street appeared under pressure after the news about US debt ceiling. The NASDAQ received significant support from strong quarterly reports from Microsoft (MSFT) and Skyworks Solutions (SWKS).

Senate defeats House "Cut, Cap and Balance" budget plan. Senators voted 51-46. Sen Reid said the debt agreement is "not close" and no more Senate votes until Monday PM.

The dollar index rises after today’s huge drop. The dollar is supported by news that Senate rejected a House-passed plan that would raise the U.S. debt ceiling. 

The euro declined against dollar after European Union officials said that the contain of Greece’s debt crisis won’t be enough to solve all problems in eurozone.

Fitch Ratings said the part of the aid plan related to private-sector participation will constitute a “restricted default.” The markets await for S&P and Moody's view.

The yen fell against dollar as US Senate defeats House "Cut, Cap and Balance" budget plan.

The loonie weakened versus U.S. dollar from almost a three-year high after a government report showed the nation’s inflation rate slowed in June more than forecast and, thus, on concerns that the Bank of Canada will resume increasing borrowing costs.

Gold prices hold at $1607.00/oz  - on the high side of the day's range of $1584.13 to $1607.01. After posting a new life-high of $1609.51
Tuesday, the precious metal fell to a low of $1581 a day later as market players trimmed positions ahead of the EU Summit. But still managed to close around $1600. Gold consolidated Thursday. According to  James Moore, precious metals analyst at TheBullionDesk, "initial support is expected around $1585/$1575".

Financials took pause in sliding (-0.6%). However, industrials have continued to slide from their opening levels (-1.1%).
The industrial sector's slide has been led by Caterpillar (CAT 104.47, -7.13), which has slumped in the wake of its latest quarterly report.

The cross extends losses to Y112.35 as euro-dollar triggers stops in thin markets. Bids still remain at Y112.20/10 ahead of Y111.40/20

U.S. stocks were poised for a lower open Friday, with futures losing momentum after Caterpillar released disappointing earnings.
U.S. stocks surged on Thursday, following news that European leaders reached an agreement to contain Greece's debt crisis. Fitch will place the Greek sovereign rating into 'Restricted Default' and assign 'Default' ratings to the affected Greek government bonds on the date that the offer period for the proposed debt exchange closes.
Companies: Before the bell, Caterpillar (CAT, Fortune 500) reported a profit of $107 million, a 30% increase from the second quarter of 2010. However, shares fell 7% in premarkets since the heavy equipment manufacturer fell short of Wall Street expectations.
Caterpillar earned $1.72 per share, slightly missing the $1.75 forecast from Thomson Reuters analyst consensus.
McDonald's (MCD, Fortune 500) beat Wall Street expectations with a surge in earnings of $1.35 per share, compared to $1.13 in year-ago quarter. Analysts had expected earnings of $1.28 per share, according to a consensus from Thomson Reuters. Shares rose 2% in premarket trading.
General Electric (GE, Fortune 500) reported operating earnings of $3.7 billion or 34 cents per share -- a jump of 17% from the year-ago quarter. Shares were up 1.2% in premarkets.
Former Dow member Honeywell (HON, Fortune 500) beat analyst estimates with second-quarter earnings of $1.02 per share. The company reported revenue of $9.1 billion, excluding $234 million from a newly discontinued operation. Shares fell about 1% in premarket trading.
Verizon (VZ, Fortune 500) reported earnings per share of 57 cents, topping analyst estimates by 2 cents.
World markets:

EUR/USD
Offers: $1.4440/50, $1.4480, $1.4500
Bids: $1.4385/80, $1.4360/50, $1.4320, $1.4300

The yen fell as stocks rallied worldwide on optimism European officials will contain the region’s debt crisis, damping demand for Japan’s currency as a refuge.

Greek two-year notes rallied, pushing the yield down 776 basis points to 26.05 percent, while the yield on benchmark German bunds, perceived as a refuge because of the nation’s AAA credit rating, rose two basis points to 2.89 percent. The MSCI Asia Pacific Index of regional shares rose 1.3 percent and the Stoxx Europe 600 Index added 0.8 percent.
The agreement was “better than expected,” said Geoff Kendrick, head of European currency strategy at Nomura International Plc in London. “It looks like you’ll get a bit of a relief rally and euro-Swiss goes higher.”
The euro was weaker against the dollar as German business confidence declined more than economists forecast to the lowest level in nine months in July.
The Ifo institute’s business climate index, based on a survey of 7,000 executives, declined to 112.9 from 114.5 in June. Economists forecast a drop to 113.7.
Fitch will place the Greek sovereign rating into 'Restricted Default' and assign 'Default' ratings to the affected Greek government bonds on the date that the offer period for the proposed debt exchange closes.
The dollar also rose against the yen following reports the White House is cutting a deal with House Republicans to boost the U.S. debt ceiling and reduce deficits by about $3 trillion over 10 years without immediate revenue increases.

Investors applauded a new rescue package for Greece and sweeping measures to tackle the euro zone debt crisis.

EUR/USD $1.4300, $1.4500
USD/JPY Y78.30, Y78.50, Y79.00, Y79.15, Y79.50
EUR/JPY Y115.00
GBP/USD $1.6200, $1.6140
USD/CHF Chf0.8300
AUD/USD $1.0775

The cross bounce of European session lows to Y113.15. Support seen at Y112.75/70 a break here opens Y112.20/10 (Tenkan line - Y112.17). On the topside Y113.52/66 Low 16 Jun/Kijun line & 50% of July pullback ahead of offers at Y113.80/85.

The yen fell as stocks rallied worldwide on optimism European officials will contain the region’s debt crisis, damping demand for Japan’s currency as a refuge.

Nikkei   10,132 +121.72 +1.22%   
Hang Seng  22,445 +457.51 +2.08%   
S&P/ASX   4,603 +46.83 +1.03%   
Shanghai Composite  2,771 +4.90 +0.18%

The dollar dropped against a basket of rival currencies on U.S. debt ceiling talks. In addition, the S&P reiterated the risk of a downgrade of U.S. debt within three months.
The euro hit the 2-week high versus the dollar on bets the European Financial Stability Facility may guarantee Greek bonds.
The Australia’s dollar rebounded and shows a steady growth.
The Canadian dollar rose for a third day versus its U.S. rival as today the Bank of Canada prompted investors to move forward the date of expected interest rate increases.
The yen gained after beating data from Japan Ministry of Finance, showing ¥70.737 billion ($897 million) trade surplus in June.

• June federal tax revenue +9.6% y/y, 1H 2011 +10.9% y/y
• 2011 federal net new borrowing likely to amount to around E30 bn
• Economic momentum likely slowed markedly in 2Q
• Export momentum likely to slow somewhat

Resistance 3: Y79.30 (Jul 15 and 20 high) 

Resistance 3: Chf0.8275 (Jul 12 low, Jul 19 high)

Resistance 3: $ 1.6440 (Jun 14 high)

Resistance 3: $ 1.4580 (high of July)

08:00 Germany IFO business climate index (July) 113.6 114.5