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The Euro continued to trace transition oscillations, against a background of risk appetite thwarted yesterday by the surprise decision of the Meloni government to apply a tax on banking superprofits. Italy has decided to levy a 40% tax on banks’ “billion-euro surplus profits” to offset the cost to households and businesses of soaring interest rates, the vice-president announced on Monday evening. Prime Minister Matteo Salvini. The tax on the excess profits of banks, which must be settled by June 2024, will concern the accounting years of 2022 and 2023, AFP learned from a government source. Transalpine banking institutions are suffering hard this Tuesday in Milan: Bper Banca loose 8%, Finecobank returns 7.5%, Intesa Sanpaolo -7.4%, Monte dei Paschi di Siena (Mps) -7.3%.
Rome slices, Milan plunges… The FTSE MIB, the Italian Stock Exchange’s flagship equity index, lost 2.12% in the process.
For the time being, currency traders are on hold, scalded by the downgrading of the US sovereign rating by the Fitch agency. They try to measure the landing angle of the main economies relating to the spot (Germany, Italy, France, United States), based, among other things, on the latest Chinese indicators. While the quality of Beijing’s foreign trade has clearly deteriorated, the signals from prices, particularly at production, are much more reassuring.
On this side of the Atlantic, it is Germany that is of most concern. As a reminder, it was the German component of the Sentix index, published earlier in the week, which cast a chill. “Germany is adding fuel to the fire: the leading economy in the euro zone becomes the weakest link in the euro zone, weighs heavily on the monetary union as a whole. The component of the index for for the Germany falls for the fourth consecutive time to -30.7 points,” reads a commentary note accompanying the Sentix survey. The disappointment was also severe on German industrial production figures in June (-1.5% in volume compared to May).
To follow the stocks of crude in the United States at 4:00 p.m. before the highlight of tomorrow: the consumer price indices, one of the flagship measures of inflation across the Atlantic.
At midday on the foreign exchange market, the Euro was trading against $1.0980 approximately.
KEY GRAPHIC ELEMENTS
The near total retracement of July’s gains does not militate at this stage for a continuation of the advance of the currency pair, without formally ruling it out. This retracement, by its magnitude, weakens the bullish message then delivered over a good part of July. The outcome of the ongoing test of the 50-day moving average (in orange) will be decisive. Immediate neutral opinion. Traders will therefore avoid taking an immediate position on the currency pair, waiting for a directional entry.
MEDIUM TERM FORECAST
In view of the key graphic factors that we have mentioned, our opinion is neutral in the medium term on the Euro Dollar (EURUSD).
We will keep this neutral opinion as long as the Euro Dollar (EURUSD) parity prices are positioned between the support at 1.0854 USD and the resistance at 1.1100 USD.
The News Bulletin 247 board
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