Market Movers of the Day
Asia-Pacific
Australian Westpac consumer confidence at 1.7%
Japanese Key interest rate left unchanged at 0.1%
New Zealand CPI at 1.3% QoQ versus 0.8% expected
RBA governor speech
Europe
UK Claimant count rate at 5%
UK average earnings excluding bonuses in line with expectations at 1.9%
UK unemployment at 7.9% better than expected
EU industrial production fall –15.4% YoY
Americas
US MBA mortgage applications fall -1.8%
US Import price index at 0.1% MoM
US Retail Sales fall -1.5% less than expected
FOMC Minuets
US Monthly Budget Statement
US API Crude oil inventories fall -172K
The Overall Sentiment
Sentiment was strongly negative mainly driven by optimism fueled by the better than expected US Retail sales but mainly due to better than expected corporate earnings reports which continue to stream in and surprise largely for the better. The Dow was at the centre edging above the 10,000 milestone thus marking a 10 Years flat trend for the index gaining virtually zero for the decade. The Dow ended the day with a 1.47% gain trading at 10,015, The S&P was up 1.75% and in Europe the FTSE advanced 1.98% in response to the positive sentiment and the UK unemployment figure which is steady at 7.9%.In Frankfurt the DAX was higher by 2.45% and the Paris the CAC40 rose 2.14%.In the FX arena the broad Dollar selloff continued amid strong risk appetite with the Euro rising to 1.495$ just shy of the 1.5 mark and the CAD at the 1.2 zone with rising bets it is heading for parity versus the Greenback. The FOMC minuets released later in the day revealed some Fed members were in favor of additional or an expansion of the Mortgage related Quantitative Easing pointing more Dollar printing from the Fed is not yet out of the horizon and a rate hike is even more unlikely. Markets in reaction to the news pushed the Dollar lower as inventors start to asses Dollar depreciation as deeper than anticipated. In the commodities arena Gold continued to hover slightly under the record high trading at the 1060$ zone, Silver continued to confidently move to settle above the 18$ and oil pushed close to 76$ with the 80$ at its aim.
The Day Ahead
The statement before the opening of the trade in Asia-pacific coming from RBA governor Glenn Stevens outlining the Reserve Bank of Australia “should not be timid in raising rates”, is leaving almost no space to doubt rates in Australia will continue to rise, and is expected to affect sentiment for the Aussie Dollar with bets the currency is heading for parity against the Greenback. In addition markets will be fuelled by the positive sentiment a day before and with eyes on the expected earnings releases in the US with market movers such as Citi, Goldman Sachs and Google expected to report.CPI figures from the US and EU are also due with reading expected to be close to zero flat. At Mid day US initial Jobless claims will gather attention as always, with investors expecting a 525K figure trying to price when US unemployment will bottom. The concluding data for the day will be US manufacturing data with NY Empire state manufacturing index and Philadelphia Fed manufacturing survey with investors expecting a slight retreat in manufacturing sentiment. All in all earning releases are expected to lead market trend with markets fluctuating in tandem to surprises for the better or the worst.
Technical Analysis
EUR/JPY
Although the pair has gathered some bullish momentum from around the 129 area and is currently trading around the 134 zone. By examining carefully the fast moving average versus the slow moving average it is evident the pair is in a flat trend with potential downside. The 136-137 resistance should be closely watched as only a break of that area would question the flat trend. However a continuous failure to break the 136-137 resistance will potentially put the 127-129 support to the test.
Market Analysis provided by eToro
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