The euro trades steady

Good Morning,

- The euro trade steady, after rebounding from a fresh eight-month low against the greenback yesterday.

- S&P close at new record high for 2nd day. Japan's Nikkei 1.13%, Hong Kong's Hang Seng 0.20% (07:00 GMT), Korea's Kospi 0.36%, Australia's ASX 200 -0.05% and China's Shanghai 1.02%.

- The euro find some support and rebounded on Thursday from an eight-month trough of $1.3438 after stronger-than-expected German and French business activity reports slightly tempered bearish views towards the eurozone economy.

- Sterling traded below 1.70 level, after pulling back overnight from a one-month low of $1.6965, as British retail sales come weaker-than-expected for June data showed on Thursday. The market focus is now on Britain's second-quarter GDP announced later today. The British economy is forecast to have grown 0.8 percent from the previous quarter and anything higher could further support sterling's bounce.

- Commerzbank on EUR/USD: The pair has seen a minor break into new lows for the year and more importantly closed below the 1.3476 previous low before bouncing back slightly today, notes Commerzbank. "A negative bias will remain entrenched below the 1.3580 downtrend. We target initially the 1.3426 200 week ma en route to the 1.3295 November 2013 low," CB projects. "Only above 1.3580 would delay our immediate negative outlook for a deeper retracement to 1.3665/1.3700, while capped here a negative bias remain intact,"CB adds. In line with this view, CB runs an active limit order to sell EUR/USD bounces into 1.3490, with a stop around 1.3585.

- Italian PM Renzi said yesterday Italy unlikely to meet 0.8% GDP target.

- The International Monetary Fund on Thursday chopped its 2014 forecast for global economic growth to take into account weakness early in the year in the United States and China, the world's two biggest economies. The IMF warned that only some of the factors leading to the reduction were temporary, and said richer nations in particular faced the risk of economic stagnation unless they do more to boost growth through deeper reforms, such as investing in infrastructure or changing tax laws. IMF said the global economy should expand 3.4 percent this year, 0.3 percentage points below what it predicted in April.

- IMF predicts Britain's GDP growth rate will surge to 3.2% by year end.

- US New Home Sales declined 8.1 percent to a 406,000 annualized pace, the fewest since March and less than any economist surveyed by Bloomberg, data showed yesterday.

- Jobless Claims in U.S unexpectedly dropped last week to the lowest level in more than eight years.

- The guardian : While the rest of the world recovers from the great recession of 2008-2009, Europe is stagnating. Eurozone growth is expected to be 1.7% next year. What can be done about it? One solution is a weaker euro. Earlier this month, the chief executive of Airbus called for drastic action to reduce the value of the euro against the dollar by about 10%, from a "crazy" $1.35 to between $1.20 and $1.25. The European Central Bank cut its deposit rates from 0 to -0.1%, effectively charging banks to keep money there, but these measures had little effect on foreign exchange markets. The ECB's inaction is not, however, wholly responsible for the appreciation of the euro's exchange rate. The pattern of current account imbalances across the eurozone also plays a large role. Germany's current-account surplus, the largest in the eurozone.

- Japanese consumer price data was in line with forecasts and the yen's reaction was muted as it did not stir expectations of further monetary easing by the Bank of Japan. Core consumer prices rose 3.3 percent in June from a year earlier, before the effect of April's sales tax hike was stripped out, matching forecasts.

- Watch today: EU lending, German Ifo sentiment, UK GDP.

Have a nice Weekend!