Market Movers of the Day
Asia-Pacific
Australian Home Loans falling -0.6%
Australian Investment Lending rise 7.6%
Japanese leading Economic leading Index in line with expectations at 83.3
Japanese adjusted current account at ¥1233.5B
Japanese trade balance at ¥303.7B
Europe
Swiss unemployment as expected at 4.1%
EU GDP falling -0.2% QoQ versus a -0.1% consensus
UK BRC shop price index flat MoM
German factory orders rising 1.4% MoM surprising for the better
Americas
EIA Crude Oil Stocks change at -1M barrels
US Consumer credit disappointing with a -$12B fall
The Overall Sentiment
Sentiment was rather mixed with most major indexes closing flat in response to relative disappointing economic data and profit taking which weighed on markets. In Europe EU GDP fell -0.2% QoQ slightly more than the -0.1% expected, German factory orders surprised modestly for the better rising 1.4% MoM versus 1.2% and in Switzerland unemployment was in line with surveys standing at 4.1%.Moving to the US consumer credit fell more than expected falling -$12B in August, suggesting US consumption and credit is still at subdued levels. The FX sentiment was largely counter dollar despite a mixed picture in equities, the Euro moved back above the 1.47$, sterling advanced close to the 1.6$ area and the Yen retested 88 support. In the commodities arena metals again took the lead with strong gains for Gold and silver as concerns over dollar weakness continued to mount. Gold reached an historic record for the third day in a row settling around 1050$ and silver edged close to 18$ an ounce. Oil on the other hand retraced to the 70$ zone with investors largely ignoring the fall in Crude oil stocks released by EIA as EIA figures also pointed gasoline supplies climbed and refineries production rose suggesting petroleum market might be over supplied.
The Day Ahead
At the opening of the Asia session the better than expected Australian unemployment figure pointing a surprise decline of 0.1% to 5.7% from a month before, against an expected expansion by markets, could provide bullish support for the Aussie versus the Dollar and the Yen and push Australian equities to the green. In the US initial Jobless claims will gather some attention However the main “course” of the Day will be the rate decision by the ECB, the BoE and the speeches by the two major central bankers Jean Claude Trichet and Fed chairman Ben Bernanke. Although key rates are expected to be left unchanged market eyes will focus on exit strategies by the three major banks with the Australian surprise rate hike at the beginning of the week raising the question of when will the central bankers begin tightening monetary policy and move rates to a normalized level. Any suggestion of an exit strategy or a rate hike by either of the three has the potential to swing markets strongly with the Dollar play at the centre.
Technical Analysis
AUD/USD
The pair has reached the 14 month record trading slightly above the 0.90 area. Although the major bullish trend is rather strong the swift move towards the 0.90 hovering the higher end of the Bollinger bands, and the fact the stochastic indicator readings is above 90 might suggest the pair is in for some profit taking ahead of reaching the 0.92 area. The 0.87-0.88 price level is in line with the bullish trend line and could provide a good buying opportunity for the Aussie bulls in case of a dip. A break of the 0.87 level downwards will point the 0.85 as the next support.
Market Analysis provided by eToro
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