A positive earnings release from banking giant JP Morgan set the tone for European equities and currencies on Thursday, with profits arriving at $2.7bn for the second quarter, surpassing even the most optimistic analyst forecasts.
This saw banking stocks help the major European indices climb north in unison, and pushed the pound and euro up slightly over the day.

News that CIT, an American commercial lender was given the cold shoulder by the US government despite prolonged talks, albeit forcing it into what will likely be the fourth largest bankruptcy ever, meant that the American equities weren’t in quite the same buoyant mood as their European counterparts. The dollar suffered as a result, and was sold off as investors searched elsewhere for risky assets.

And New Zealand is not the place to search for it, according to credit ratings agency Fitch, which delivered the NZD a kick in the teeth after downgrading its outlook on the economy to ‘negative’ from ‘stable’. While initially the kiwi was sold off, it managed to recover well throughout the day, clawing back most of its initial losses, as investors saw an opportune time to buy into the currency that is predicted to continue to perform strongly over the near and medium term.

Data out today is once again reasonably light, with US housing starts and EU trade balance and construction figures the only economic data of any importance. We once again look to earnings reports to dictate sentiment for the meanwhile, with important earnings reports from banks Citigroup and Bank of America highly anticipated, as is the impending GE result forecast for 50% lower than last quarter.

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