Risk appetite was given a strong boost overnight by the strong US employment data. The Dow closed 92.02 pts higher at new record high of 17068.26. The S&P 500 also jumped 10.82 pts to close at new record high of 1985.44. Positive sentiments carried on in Asian session with broad based rally in equities. Meanwhile, treasury yields also jump with 30 years and 10 years yield taking out recent resistance. The Dollar was bot broadly with dollar index breaking 55 days EMA, neutralizing June's bearish move. The US markets will be on holiday today and we'd likely see some consolidative trading before the week closes.
The euro, on the other hand, is mixed. The July ECB meeting mainly focused on the technical details of the easing measures it announced in the previous month. President Draghi indicated the conditions attached to the TLTRO were rather lenient. Draghi also suggested that the aim of lowering the deposit rate into negative territory was to keep the corridor at 25 bps and to avoid any negative repercussions on interbank market volume that could follow any further narrowing. On the preparatory work related to outright purchases of ABS, he noted that a precondition for the ECB to launch such program is a reduction in regulatory capital requirements for financial institutions’ ABS holdings. Moreover, the ECB announced that it would reduce the frequency of its meetings to once every 6 weeks from January 2015 onward and it would publish regular accounts of the policy meetings. More in ECB Clarified On TLTRO, Loose Conditions Should Raise Sentiment.