Market Movers of the Day
Asia-Pacific
Australian PPI at 0.1% versus 0.3% expected
Europe
German Gfk consumer confidence disappointed with a reading of 4 against 4.5 expected
The Overall Sentiment
Forex
Although the stream of economic data was rather thin the Dollar regained strength rather aggressively against most of its peers, as a reaction to circling rumors the tax relief program for home buyers in the US might be terminated soon. The rumors coming in the midst of the earnings season caused worries over the heath of the economy to refloat once more. The rising bets on lower growth pushed the Dollar higher against the high yielders in a typical risk aversion play. The Dollar moved to a one week high against the Euro trading around 1.4850 $, edged around 1.2 against the Swiss Franc and bottoming around 0.9125 versus the Aussie. The Kiwi also gathered much attention amid comments from the Prime Minister of New Zealand that the strong Kiwi is helping to offset inflationary pressures. The statement coming ahead of the expected rate decision in New Zealand dented bullish momentum for the Currency pushing it to as low as 0.744$.
Equities
Sentiment was strongly bearish in reaction to worries over the termination of the tax relief program to US home buyers. The circling rumors alongside downgrades for some of the US largest banks pulled shares of the Banking sector and homebuilders south into red territory, causing benchmark indexes to sink lower. Among the out standers were Bank of America and American Express with BofA falling more than 5% as investors speculated the bank will be forced to raise more capital. On the contrary American Express outstood on the positive side as the credit card company posted better than expected earnings with shares edging slightly higher. Benchmark indexes ended in the red across the board with S&P closing -1.17% lower, the FTSE lower by approximately -1% and the DAX by -1.71%.
Commodities
Sentiment was rather bearish in tandem to stronger Greenback and lower yield on Treasuries. Oil fell more than 3.5$ before settling bellow the 80$ mark at 78$, Gold moved bellow the 1050$ support and settled around 1040$ an ounce and silver fell below 17$ before rebounding slightly to 17.2$ an ounce.
The Day Ahead
The Day will be loaded with consumer data across the Globe. Starting with UBS Consumption indicator in Switzerland and then moving to the CBI Distributive Trades survey which will indicate on the consumption trend in the UK .In the US highly regarded Consumer data is due with the Consumer confidence at 14:00 GMT followed by the ABC/Washington post consumer confidence later in the day. The concluding consumer data for the Day will be the Retail Trade data in Japan due at the end of the trade with investors eager to see more positive news on the Japanese consumer. All in all investors will look for signs of a consumer recovery with any positive surprise pushing the low yielders mainly the USD and the Yen lower as risk appetite could rise. The speech by Treasury secretary Timothy Geithner will be at the background and could weigh on the potential anti-Dollar sentiment, in case an exit strategy will be mentioned.
Technical Analysis
NZD/USD
After falling sharply to the 0.744 area the pair has stabilized and could potentially regain strength. The 0.744 is in line with the bullish trend line making it a good benchmark to start another bullish cycle. The 0.7550 area should be closely watched as it poses a strong resistance and only a break of that level would confirm the resumption of the bullish trend. A substantial break of the 0.744 level downwards could invalidate this scenario and push the pair to a deeper retreat.
Market Analysis provided by eToro
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