Market Movers of the Day
Asia-Pacific
Australia’s Westpac leading index down -1.1%
Japanese BSI Large Manufacturing at 15.5 better than expected
Japanese Tertiary industry index up 0.6% MoM surprising for the better
Europe
Swiss ZEW Survey expectations at 58
Swiss adjusted retail sales down up 1% YoY slightly lower than expected
UK claimant count rate at 5% in line with expectations
UK Average earnings including bonuses up 2.5% versus 2% expected
UK ILO unemployment rate at 7.9% slightly better than 8% expected
UK Jobless claims change at 24.4k
EU CPI up 1.3% YoY higher than market expectations
Americas
In the US MBA Mortgage applications down -8.6%
US CPI down -1.5% YoY slightly less than expected
US Current account deficit at -$98.8B
US Total Long Term Net TIC flows at $15.3B substantially lower than expected
US Industrial production up 0.8% MoM surprising for the better
US Capacity utilization at 69.6% better than market expectations
EIA Crude oil stocks down -4.7M Barrels showing healthy demand
US NAHK Housing market index at 19
Canadian Manufacturing shipments up 5.5% MoM
The Overall Sentiment
A day loaded with highly important economic data in the US and Europe ended with markets gaining as data was received well by markets and spurred more bets on the recovery story. In Asia pacific Japanese industrial data surprised for the better although the Nikkei ended the day lower as the strong Yen weighted on the index. In the London session positive sentiment was robust with better than expected UK unemployment figures and EU CPI data. Stocks in the region ended on the money with the FTSE 100 rising 1.63% and in Frankfurt the DAX advancing 1.27%.Moving to the New York session positive sentiment continued with the positive comments from Fed chairman Ben Bernanke a day before fueling stocks’ advance north. Market in the US and Canada where also largely effected by the positive economic data coming from the US which pointed an improvement in industrial production which many consider as a leading indicator for business cycles. At the day’s end US majors indexes closed on the green side with the S&P gaining 1.53% and the Dow rising 1.12%.In the FX arena Dollar weakness continued to reign as investors appetite for risk pushed the greenback to cheaper levels with the Euro reaching a one year record of 1.47$.In the commodities arena Gold continued to shine reaching to 18 months high of 1020$ an ounce mainly due to dollar weakness and low interest rate expectations. Although the metal later settled lower the yellow metal is increasingly showing signs of basing itself above the 1000$ mark and teasing the possibility of reaching the 1033$ the all time record. In the energy play Oil edged higher with a fall in EIA crude stocks improving the outlook for the black gold. Overall markets traded on a rather strong positive note with investors expecting inventories buildup in Q3 to positively affect the bottom line.
The Day Ahead
At the early trading hours markets eyes will be on the BoJ rate decision in Japan where rate are expected to be left unchanged at 0.1% as the deflationary pressures in Japan continues to be afloat .Investors eyes will be mainly focused on the statement coming from the BoJ rather than the decision itself with markets eager to hear what will be the next step by the BoJ the improve price stability and what are the prospect for the Japanese economy as a whole. Later in the Day markets’ focus will move to Data coming from Europe with the EU trade balance, UK retail sales and in Switzerland the SNB rate decision coming at mid day GMT. The SNB is expected to keep rates on hold at 0.25% as to relief pressure on Swiss banks. In Canada CPI and the leading indicators are due with markets expecting rather weak data as the Canadian economy is strongly linked to the US. In the US initial Jobless claims are expected to stand around the mid of 500K and the Philadelphia Fed manufacturing index expected to show additional improvement in pursuance to the industrial data a day before.
Technical Analysis
EUR/JPY
After the pair has topped out around the 138 level the pair slide to lower levels and entered a month of bearish adjustment. However the double dip of the 131 support which ended with an unsuccessful break might signal the bearish cycle is wearing out. The pair has move from bearish to flat and is now trading in the 131-134.5 price band. Noticing the fast and slow exponential moving average it is evident a solid break of the 134.5 has the ability to end the bearish trend and move the pair back into the major bullish trend with the 138 as the first target in sight. Only a break of the 131 downward would suggest the bearish adjustment has more appetite to fill with the 128 as the next stop.
Market Analysis provided by eToro
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