The Euro trade stable at 1.36 level

Good Morning,

- The Euro trade stable at 1.36 level, despite the worries over the Portuguese Banks and the possible effect in Euro area banking system…

- Most Asian share markets slipped on Friday and safe haven assets stayed in demand as investors waited to see how European stocks responded to the latest outbreak of banking jitters in the region. Japan's Nikkei -0.34%, Hong Kong's Hang Seng 0.01% (07:24 GMT), Korea's Kospi -0.70%, Australia's ASX 200 0.37% and China's Shanghai 0.42%.

- Investors concern deepening over missed debt payments by a company linked to the Iberian nation’s second-largest lender. Portugal’s central bank said Banco Espirito Santo SA is protected after its parent missed the payments. U.S. Treasuries and gold rallied.

- Portugal’s central bank says the solvency of embattled bank Banco Espirito Santo is “solid” and that steps have been taken to avoid contagion from Grupo Espirito Santo, which is its largest shareholder and missed a debt payment yesterday.

- European stocks had been buffeted yesterday as trading in Banco Espirito Santo was halted after a 19 percent drop. The bank's largest shareholder suspended trading in its own shares and bonds due to "material difficulties" at its own largest shareholder. Late on Thursday, the bank said losses on loans to the troubled business empire of its founding family would not put it at risk of running short of capital.

- The Chicago Board Options Exchange Volatility Index (VIX) rose 8.5 percent today to 12.64. The gauge known as the VIX finished last week at a seven-year low before rallying 16 percent during the first two days of the week, the biggest surge since April.

- German debt played much the same role in Europe, where yields on 10-year bunds were at a 14-month trough of 1.20 percent. Yields on Portuguese, Spanish and Italian bonds had all risen sharply on Thursday.

- JP Morgan on EUR/USD: EUR/USD is awaiting a range breakout between 1.3539 & 1.3671 for directions. "No conclusion yet whether the downtrend has already been resumed or whether we are still due for a stronger countertrend rally which would classically stretch out to the upper junction at 1.3877 (minor 76.4 %)," JPM argues. "In order to receive stronger evidence for one of the two scenarios we are looking for a range breakout between 1.3671 (minor 76.4 %) and 1.3557/39 (minor 76.4 %/hourly trend)," JPM adds. "Above 1.3671 we’d look for an extension to 1.3877 whereas below 1.3539, we’d see key-support at 1.3493/77/68 (weekly trend-last low/monthly trend) in focus," JPM projects.

- ECB’s Nowotny: The European Central Bank’s newest stimulus package has had an impact on markets and there is no urgency to take additional steps.

- Fed's George says rate hike possible this year. "As I look at some of the policy prescriptions that the Federal Reserve relies on, looking at formulas that help guide you on when it's time to change, many of those are already pointing to lifting off of zero as early as even this year or next year,"

- Japanese Economics Minister Akira Amari warned that it would be premature for the Bank of Japan to consider an exit strategy from its massive stimulus programme, voicing hope instead for further monetary easing if achievement of its inflation goal falls behind schedule.

- Tensions in the Middle East continued to simmer with Israeli officials seeming to hint at a possible assault on Gaza by ground forces.

Have a nice Weekend!