Sentiment in Europe has been dashed after House Speaker Boehner’s Plan B failed to garner enough support from Republicans, forcing Boehner to cancel the vote on the tax bill. This announcement was made overnight and in the immediate reaction, the E-mini S&P lost 45 points. This risk-off move was noticeable from the open with European equity futures all opening markedly lower.
USD strength has been observed across the board as money moves towards safe-havens with the USD-index up 0.14% at 1120GMT. A touted option expiry at 1.3200, for today’s 1000am NY cut has exerted magnetism on EUR/USD with the pair currently trading at 1.3204 (-41 pips).
Macroeconomic data has been light this morning with the final UK GDP reading for Q3 printing at 0.9% vs. Exp. 1.0%. No reaction was seen across the various asset classes to the data release as focus remains firmly on the fiscal cliff situation in the US with Boehner saying it is now up to President Obama and Senator Reid to avert the cliff themselves.
Looking ahead, there is a slew of US data at 1330GMT/0730CST with Personal Income, Personal Spending and Durable Goods Orders all due to be released. Elsewhere any further announcements on the fiscal cliff situation will be keenly observed.
Print 11:43, 21 Dec 2012 - Market Analysis - Source: RANsquawk
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