European indices came out weaker across the board during close of market session yesterday with the only exception of the Italian MIB which saw marginal gains of 0.14%. The UK FTSE100 led the way, posting losses of 0.99% followed by the German DAX declining by 0.77%. European leaders are dividing on the way to move forward at a time when countries are planning on rolling back the austerity measures and seeking more time. The EU leaders meeting concluded without any major agreements. The challenge is on managing the European Stability mechanism’s seniority issue which didn’t reach to a mutual agreement. A resolution will now be postponed until the next EU summit due to be held on June 28th and 29th later in the month.

Spain concluded its bank stress tests which showed that Spanish banks need additional funding in the range of $70 – $80 billion if the markets continue to slide. The tests however failed to take into consideration the soverign debt which is proving to be a major point sticking out on the banks balance sheets which could potentially scare away investors who are expecting a lot more.

The Euro showed losses against most of the currencies as reports of Moody’s intention to downgrade several financial institutions was leaked to the markets. Against the US dollar, the Euro fell to 1.2549.

The momentum from poor US data is clearly being reflected in the Asian markets as indices fell through the overnight sessions. Australia’s ASX led the losses with declines of 1.11% with the Hang Seng following closely with declines of 1.04% and a marginal drop in the Nikkei of 0.53%.

China’s flash PMI data points to a protracted downturn as European imports reduced dramatically.

Moody’s came out with more downgrades from the financial institutions in the US, downgrading over 15 banks that included Morgan Stanley that was downgraded by two notches and JP Morgan which was downgraded by 3 notches.

Weaker than expected housing data and the rise of initial jobless claims added to the woes in the US markets. Manufacturing data showed lackluster figures which came well below market expectations further fuelling the point of the slowdown in the US economy.

The US markets came out low with the NASDAQ dropping 2.44% and 2.23% from the S&P500. Dow Jones fell 1.96%. The dollar index which has previously moved to the level of 82 is trading near 82.259 as the VIS volatility index rose 16.47% to 20.08 which is clearly one of the biggest move during a trading session and in a year.

The US dollar (USD) came out stronger against most of its counterparts reflecting a risk appetite retreat from the markets. Against the Japanese yen, the USD rose to 80.04.

Prices of commodity continue to slide entering into a bearish market. WTI crude oil fell below the $80, trading at $78.63 to a barrel. Gold also showed losses following the Fed announcement and is currently trading at $1564.20. Silver prices moved down to 26.9850 dollars an ounce.

There are no major economic news scheduled for today as markets expect to focus on broader macroeconomic issues.

Outlook	Pivot	Preference1	Sentiment2
EURUSD	1.2610	SHORT @ 1.2610	57% of deals buy EUR
USDJPY	80.00	LONG @ 80.00	28% of deals buy USD
GBPUSD	1.5690	SHORT @ 1.5690	5% of deals buy GBP
AUDUSD	1.0100	SHORT @ 1.0100	51% of deals buy AUD
GOLD	1583	SHORT @ 1583	77% of deals buy GOLD
OIL	80.15	SHORT @ 80.15	86% of deals buy OIL