Market Movers of the Day
Asia-Pacific
*Australian Unemployment Rate at 5.5% in line with market expectations
*Australian Employment Change better than expected at 24.5K
Europe
*ECB Monthly Report
*EU Industrial Production in September better than estimated at -12.9%
*Swiss ZEW Economic Expectations down to 56.4 from 65.0 the previous month
*ECB Trichet’s speech
Americas
*Canadian New Housing Price Index better than forecasted at 0.5%
*US Initial Jobless Claims better than expected at 502K
*US Continuing Jobless Claims better than expected at 5631K
*US EIA Crude Oil Stocks report showed stockpiles unexpectedly gained 1.8M
*US Treasury’s Geithner speech
The Overall Sentiment
Equities
US stock markets closed on the negative side dragged down by losses from energy companies as Crude Oil took a hit after the EIA weekly report showed an unexpected growth in oil stockpiles. The S&P 500 sank 1% after reaching a 13-month high yesterday and the Dow Jones slid 0.9%. In Europe the sentiment was mixed with dissimilar fortune for the main indices. In the UK equities climbed for a second day pushing the FTSE 100 up 0.2% while in Germany shares declined for a second day pulling the DAX down 0.1%. Japanese Nikkei 225 lost 0.6% led by energy and mining companies after the drop in oil and metal prices.
Forex
The Dollar strengthened against most majors amid declarations from US Treasury Secretary Timothy Geithner at the Asia-Pacific Economic Cooperation Summit about the importance of a strong Dollar in maintaining global stability. In spite of rather positive data coming from the ECB Monthly Report and the Euro-zone Industrial Production, EUR/USD steeply dropped ending the day around the 1.4850 area. With no further UK data releases for the rest of the week the Pound traded sideways against the greenback around the 1.6550 level ultimately gaining modestly to close slightly below 1.66. Winds of change may be starting to blow for the Canadian dollar which despite Canada’s positive housing figures was the biggest loser of the day against its US counterpart. USD/CAD rallied strongly closing around the 1.0550 level. The Aussie dollar hit a 15-month high as the Australian Employment Change came stronger than expected but suffered a sharp retreat as commodities declined to close around 0.9250. The Yen lost ground against the greenback but remained in range against most majors as many investors await statements from the APEC Summit in the course of US president Obama’s first visit to Asia.
Commodities
Crude Oil fell below $77 after the weekly EIA report showed stockpiles unexpectedly gained 1.8 million barrels. Gold traded above $1122 hitting a new record before dropping strongly as the Dollar strengthened to close slightly above $1105. Silver fell as well but remained within the $17.10-$17.75 range developed in the last sessions.
The Day Ahead
The day will start with Japanese Industrial Production and Consumer Confidence figures where in both cases analysts predict a negative outcome. Moving to Europe, third-quarter GDP figures will be released for Germany and the Euro-zone. Markets anticipate encouraging figures which could revive the bulls igniting a EUR/USD rally. In the US session, Canada’s International Merchandise Trade and the US Trade Balance are due for release at 13:30 GMT making it a very sensitive hour for USD/CAD. The day will close with the University of Michigan Consumer Sentiment Index which will be closely followed as the holiday shopping season is approaching.
Technical Analysis
AUD/USD DAILY
After another strong rally and a fresh 15-month high AUD/USD had its first declining session. Although its bullish intentions remain in place it seems it’s time for the Aussie dollar to blow up some steam before it continues to climb. It presents the opportunity to open a Short position to take advantage of a correction towards the overall ascending trend line.
Daily Forex Market Analysis provided by eToro
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