Daily Market Review 18 of October
The European and U.S. equity markets closed higher Wednesday as stronger than expected U.S. housing data combined with positive Spanish bailout speculation spur the risk appetite.

At the close of the U.S. session, the Dow Jones Industrial Average gained 0.04%, the S&P 500 index climbed 0.41%, while the Nasdaq Composite index rise marginally by 0.10%.

At the close of the European equity markets France’s CAC 40 climbed by 0.19%, Germany's DAX edged up 0.10%, while Britain's FTSE 100 rose 0.50%.

The positive sentiment in the markets yesterday was mainly attributed to the better than expected housing data; In an official government report, the number of housing starts in the U.S. rose to the highest level in four years in September, while building permits issued surged to the highest level since July 2008.

Today morning, Asian stocks rose sharply after China reported its gross domestic product grew 7.4% in the third quarter, in line with expectations.

Chinese growth figures sent stocks firming, boosting hopes the large Asian economy may be turning a corner toward more robust growth rates.

Chinas Industrial production and its Retail sales also rose unexpectedly last month, official data showed on Thursday.

In a report, National Bureau of Statistics of China said that Chinese Retail Sales rose to an annual rate of 14.2%, from 13.2% in the preceding month.

Today’s Economic Calendar:

The highlight of the day was definitely the Chinese data reported during the night but investors eye will also look for signs out of today’s European union two days summit in Brussels to discuss Greece's steps towards restoring fiscal health as well as ways to firewall and extinguish the debt crisis, especially in Spain.

08:00    DE    EUR    Merkel speaks in the Bundestag                   
08:30    UK    GBP    Retail Sales (YoY) (Sep)   
08:30    UK    GBP    Retail Sales ex-Fuel (YoY) (Sep)   
n/a     EMU    EUR    European Council meeting                   
14:00    US    USD    Leading Indicator (MoM) (Sep)   
14:00    US    USD    Philadelphia Fed Manufacturing Survey (Oct)       


Among the major companies that are going to report their quarterly earnings a head of the bell in the US today; Phillip Morris, Verizon and Morgan Stanley.

At the close of the US session today the search giant Google and the software giant Microsoft will unveil theirs quarterly earnings as well.

EUR/USD Hopes that Spain will request a bailout sparked a risk appetite in the market that took the euro and other high yield asset higher in recent sessions. Today, ahead of the European two days summit, investors decided to take some breath, sell the bloc currency and move sideways until further developments, if at all, will comes out of the summit tomorrow.

We don’t expect any major enouncements out of the summit and we remain bullish on the EURO at list for the time being.

Resistance; 1.3171, 1.3280, 1.3380
Support; 1.300, 1.2993, 1.2892, 1.2820

Overall sentiment: Bullish