EU Morning Report - Focus on German court ruling

The euro (EUR) appreciated against most of its major counterparts, as speculator worldwide expect that Germany's top court decision on the viability of the European Stability Mechanism (ESM) and the fiscal pact will be positive. The court ruling is due today at 08:00 GMT and market participants are bracing for the price action that will follow. European Central Bank (ECB) Executive Board member Asmussen said that ECB President Draghi and the Greek Prime Minister Samaras did not talk about restructuring the nation’s debt in their meeting. Spanish Prime Minister Rajoy and his Finnish counterpart Katainen reiterated that the euro is here to stay and Finland is dedicated in this cause.

§ The euro (EUR) rose to 1.2870 against the US dollar (USD), a 4-month high.

§ The Australian dollar (AUD) was among the biggest gainers versus the US dollar (USD), rising from 1.0332 to 1.0427. News that Moody’s warned the US of a potential debt downgrade reinforced the Aussie’s appreciation against the greenback.

§ We keep monitoring OIL - now trading above 97 US dollars a barrel, which is strapped in a 4-dollar range, from 94.10 to 98.30, anticipating a break-out or a retracement. Market participants are positioning themselves accordingly, keeping in mind that OIL was strengthening for weeks before entering this tight band.

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