Market Movers of the Day
Asia-Pacific
*Japanese Jobless Rate for August better than expected at 5.5%
*Japanese Overall Household Spending for August at 2.6% on an annualized basis
Europe
*German Retail Sales surprised for the worst at -1.5% in August
*Swiss SVME Purchasing Managers’ Index rose to 54.3 in September
*German PMI Manufacturing for September in line with market estimations at 49.6
*Euro-zone PMI Manufacturing for September better than forecasted at 49.3
*UK PMI Manufacturing for September worse than expected at 49.5
*Euro-zone Unemployment Rate climbed to 9.6% in August
Americas
*US Initial Jobless Claims unexpectedly rose to 551K
*US ISM Manufacturing Index surprised for the worst falling to 52.6 in September
*US Personal Income rose to 0.2% in August
*US Personal Consumption Expenditures slightly better than expected at 1.3% in August
The Overall Sentiment
The sentiment was negative in the first day of the fourth quarter with stock markets dropping sharply all over the globe. In the US the S&P fell 2.6% and the Dow lost 2.1%, the most since July, as disappointing economic data added worries about the recovery of the economy pushing the Dollar and the Yen higher in a typical risk aversion play ahead of Non-farm Payrolls. US Treasuries rose to their highest levels in four months. Slightly positive US data about personal income and consumption was overshadowed by negative figures in manufacturing and employment. The ISM Manufacturing Index posted its first decline in eight months showing that the sector expanded at a slower pace than the previous month and Jobless Claims unexpectedly rose from last week with investors expecting a decrease. Fed’s Chairman Bernanke stated the he sees no immediate risk on the dollar losing its status as the world’s main reserve currency. The economic figures coming from the Euro-zone were mixed with EU Unemployment Rate rising and PMI manufacturing gaining modestly. The Pound was little changed against the Dollar remaining under 1.60 and advanced against the Euro. Commodity-linked currencies lost ground versus the greenback as Oil traded below $70 in a volatile session and Gold corrected gains from a day before to trade back under $1000. In addition to the sell-off in US stock markets, positive data from Japan boosted the Yen against its major counterparties as the Japanese Jobless Rate surprisingly decreased in August and Household Spending rose to 2.6%.
The Day Ahead
Market eyes are set on the US Non-Farm Payrolls due at 12:30 GMT. NFPs are known for causing high volatility on its release. Market expectations point to a 175K drop showing improved numbers from a 216K decrease the previous month. A better-than-expected figure could ignite risk-appetite sending the Dollar lower against higher-yielding currencies, where a negative surprise could spur risk-aversion strengthening the Dollar. In any case, past experiences show that the initial move can be rapid one way or the other but not necessarily in the market’s real direction once the dust settles. US Unemployment Rate is also due at 12:30 GMT and expected to rise to 9.8%. Euro-zone PPI will indicate the direction of consumer inflation in the region and as German PPI rose, market forecasts point to climbing figures for the EU as well.
Technical Analysis
SILVER DAILY
After rallying strongly Silver has slowly corrected from its peak just above 17.50 moving in a downwards channel for the past two weeks. It presents the opportunity to open a Short position as it is currently trading slightly below the channel’s upper boundary. A break of the channel to the upside will signal that the metal has gathered strength to aim for new heights once again.
Market Analysis provided by eToro
Disclaimer: Trading in the Foreign Exchange market might carry potential rewards, but also potential risks. You must be aware of the risks and are willing to accept them in order to trade in the foreign exchange market. Don’t trade with money you can’t afford to lose.
