Breakfast Blog

Top of the risk management morning! The Americans certainly made up for lost time when they re-entered the market yesterday after their market holiday on monday! The S&P 500 rallied through resistance at 1525 to close at 1530 and a new YTD high! This market just wants to go higher and higher and the all time highs of 1576 are firmly in its near term outlook. Goldman Sachs even stated that their was no basis for yesterdays rally citing "no bullish data". So we must adopt the mentality that no news is good news! The only two macro events that may cause a correction are the upcoming fiscal cliff debates and the Italian Elections, but the market seems to be ignoring both them at present.
The Euro is very well bid this morning in all of its major pairs, breaking above 0.87 in EUR/GBP over night and taking out the 1.34 handle in Asian trade and posting a high at 1.344. The EUR/USD made a base for itself to go higher over the last few sessions as it couldn't go below 1.33. Generally if the price action can not go any lower it will change direction and retrace in the direction it came from. This can be seem clearly in this pair. Something to watch out for in this pair is the FOMC minutes at 19 00 tonight. Look for any hawkish comments about curtailing QE before the year end. This is highly unlikely however but these minutes have proved to throw the market an unexpected curve ball on occcasions. There is some other tier 2 data from the States at 13 30 but in general the economic calendar is sparse of any major data releases this week.
Some strong offers are seen at 1.3475-90 in the EUR/USD and bids down at 1.335-70.
The FTSE has approached any area of strong resistance today in the 6375-6400 region, there had been no resistance from 6100 and it was inevitably going to get sucked up here. It also seems to be enjoying the weaker Sterling currency and the prospects of more QE when Mark Carney the new Governor of the Bank of England arrives in June. It is overbought like all the equity markets but will need a catalyst to correct.
Another quick note about Google breaking the $800 mark yesterday for the first time. What a remarkable company and this has helped the S&P 500 drive higher aswell. I hope that Google don't do an Apple on it, but I suspect not given the unique culture and fundamentals of this market leader.
Good Luck in the Markets. Lowkey