Euro Stocks To Continue Selloff As Investors Seek USD Safe Haven

The PM of Spain Maraino Rajoy has been firmly requested to resign from his position as rumors of his corruption and the corruption of his senior official abound. Spain which is the 4th greatest economy in Europe has suffered untenable levels of unemployment. The figures went up to 132,100 in Jan. The worsening political situation In Spain has seen borrowing costs heighten on the 10-year Bonds from 5.21% end of last week to 5.34% on Mon. The Spanish PMI in the service sector gained to 47 in Jan from 44.3 in Dec. Expected readings were 44.1.

In the US factory orders numbers disappointed, an expected increase of 2.2% was not met, figures released at 1.8%. Factory order data and the escalating debt crisis affected the Asian Stocks as they dropped from their 18-month high overnight. China saw some positive data as the PMI increased from 51.7 up to 54.0. This saw traders move their positions into havens like the YEN and the USD.

Stocks

Eurozone stocks opened higher today after the positive Spanish service sector data was released. The EURO STOXX 50 gained 0.37% this morning while the French CAC 40 rose by 0.43% and the German DAX 30 increased by 0.16%. Australia’s S&P dropped 0.4% after the Reserve Bank in Australia kept interest rates at 3%.

Commodities

US Grains futures and soybean prices were higher this morning in European market trading as worries continue of condition of Argentinian crops. Copper futures fluctuated moderately this morning as investors stayed cautious over the political issues on both Spain and Italy. Oil prices and other energies faltered in Asian Trading over fears over global growth. Gold futures held fairly steady Tuesday morning trading. Gold dropped 0.12%, silver was 0.15% lower as investors moved over to the USD.

FX

The Euro against the USD met a one-week low close of yesterday following Italian and Spanish concerns. Then rebounded to hit highs against the USD this morning after the positive PMI data from Spain. The EURUSD reached 1.3552. The pair can find support at 1.3457 and resistance at 1.3593. According to Chief Economist at Markit who publish the PMI data the Eurozone shows “clear signs of healing, with the downturn easing sharply in January and the region moving closer to stabilization in the first quarter.” There is also a widening between German and France PMI data as Germany posted the greatest monthly increase since Aug 2009 while the French figures fell to nearly a 4 year low.