European Open: EUR/USD and parity in focus for today’s German ZEW report

Asian Indices:

Australia's ASX 200 index rose by 13.8 points (0.21%) and currently trades at 6,616.00
Japan's Nikkei 225 index has risen by -502.75 points (1.28%) and currently trades at -188.00
Hong Kong's Hang Seng index has fallen by -255.11 points (-1.21%) and currently trades at 20,869.09
China's A50 Index has fallen by -209.61 points (-1.45%) and currently trades at 14,260.76

UK and Europe:

UK's FTSE 100 futures are currently down -27 points (-0.38%), the cash market is currently estimated to open at 7,169.59
Euro STOXX 50 futures are currently down -25 points (-0.72%), the cash market is currently estimated to open at 3,446.69
Germany's DAX futures are currently down -91 points (-0.71%), the cash market is currently estimated to open at 12,741.44

US Futures:

DJI futures are currently down -156 points (-0.5%)
S&P 500 futures are currently down -77.75 points (-0.65%)
Nasdaq 100 futures are currently down -21.5 points (-0.56%)

US Treasury Secretary Janet Yellen is set to discuss further sanctions against Russia with Japan’s Finance Minster later today. They’re also set to discuss “currencies” and a price cap for Russian oil. The US dollar index continued its ascent overnight and reached its highest level since September 2002. And that has forced EUR/USD down to just +5 pips above parity – a key level for today’s session, highlighted by rising implied volatility and demand for put options (downside protection).

EUR/USD 15-minute chart

Perhaps today’s ZEW report could be the straw which breaks parity’s back. The sentiment report for Germany is scheduled for 10:00 BST and is unlikely to show a material lift in sentiment. It reached a post-pandemic low of -41 in April, has since risen to -28 since but there’s no pressing reason to suggest it cannot move lower again given the wave of recession headlines of late.

EUR/USD fell to 1.0004 early in the session and now trades around 1.0012. If it can hold above parity then a break above 1.0032 assumes a countertrend move is underway. Whilst a clear break below 1.000 runs the risk of triggering stops and fresh sell orders (and potentially moving the market lower).

USD/JPY 1-hour chart:

This report is intended for general circulation only. It should not be construed as a recommendation, or an offer (or solicitation of an offer) to buy or sell any financial products. The information provided does not take into account your specific investment objectives, financial situation or particular needs. Before you act on any recommendation that may be contained in this report, independent advice ought to be sought from a financial adviser regarding the suitability of the investment product, taking into account your specific investment objectives, financial situation or particular needs.

StoneX Financial Pte. Ltd., may distribute reports produced by its respective foreign entities or affiliates within the StoneX group of companies or third parties pursuant to an arrangement under Regulation 32C of the Financial Advisers Regulations. Where the report is distributed to a person in Singapore who is not an accredited investor, expert investor or an institutional investor (as defined in the Securities Futures Act), StoneX Financial Pte. Ltd. accepts legal responsibility to such persons for the contents of the report only to the extent required by law. Singapore recipients should contact StoneX Financial Pte. Ltd. at 6826 9988 for matters arising from, or in connection with the report.

In the case of all other recipients of this report, to the extent permitted by applicable laws and regulations neither StoneX Financial Pte. Ltd. nor its associated companies will be responsible or liable for any loss or damage incurred arising out of, or in connection with, any use of the information contained in this report and all such liability is hereby expressly disclaimed. No representation or warranty is made, express or implied, that the content of this report is complete or accurate.

StoneX Financial Pte. Ltd. is not under any obligation to update this report.

Trading CFDs and FX on margin carries a high level of risk that may not be suitable for some investors. Consider your investment objectives, level of experience, financial resources, risk appetite and other relevant circumstances carefully. The possibility exists that you could lose some or all of your investments, including your initial deposits. If in doubt, please seek independent expert advice. Visit www.cityindex.com/en-sg/terms-and-policies for the complete Risk Disclosure Statement.

ALL TRADING INVOLVES RISKS. LOSSES CAN EXCEED DEPOSITS.

City Index is a trading name of StoneX Financial Pte. Ltd. (“SFP”) for the offering of dealing services in Contracts for Differences (“CFD”). SFP holds a Capital Markets Services Licence issued by the Monetary Authority of Singapore for Dealing in Exchange-Traded Derivatives Contracts, Over-the-Counter Derivatives Contracts, and Spot Foreign Exchange Contracts for the Purposes of Leveraged Foreign Exchange Trading. SFP is also both Derivatives Trading and Clearing member of the Singapore Exchange (“SGX”). SFP is a wholly-owned subsidiary of StoneX Group Inc.

The information provided herein is intended for general circulation. It does not take into account the specific investment objectives, financial situation or particular needs of any particular person. You should take into account your specific investment objectives, financial situation or particular needs before making a commitment to invest, including seeking advice from an independent financial adviser regarding the suitability of the investment, under a separate engagement, as you deem fit. No representation or warranty is given as to the accuracy or completeness of this information. Consequently, any person acting on it does so entirely at their own risk.

The information does not represent an offer of, or solicitation for, a transaction in any investment product. Any views and opinions expressed may be changed without an update. To understand the risks and costs involved, please visit the section captioned “Important Information” and the “Risk Disclosure Statement”.

The information herein is not directed to, or intended for distribution to or use by, any person or entity who is a citizen or resident of or located in any locality, state, country or other jurisdiction where such distribution, publication, availability or use would be contrary to law or regulation.

StoneX Financial Pte. Ltd. 1 Raffles Place, #18-61, One Raffles Place Tower 2, Singapore 048616. Tel: 6309 1000. Co. Reg. No.: 201130598R.

This advertisement has not been reviewed by the Monetary Authority of Singapore.