Europe
Germany’s retail sales come out worse than expected at 0.5%
Germany’s unemployment change shows a -7.00k figure
Europe’s manufacturing PMI showed a better than expected figure at 52.40
Europe’s unemployment rate remained steady at 9.8%
Americas
ISM Manufacturing dropped to 53.60
Pending home sales increase by a surprising 3.70%
Daily Market Review 2nd December
It was another positive day for stocks and commodities yesterday as the major indices climbed higher for the second day of this trading week. Volume surprised investors as the S&P500 index, among other major indices, were driven higher on increasing demand.
Even though recent news regarding Dubai world continued to weigh on sentiment, it was brushed aside as headlines showed that their debt is much lower than previously expected. According to Bloomberg news the current debt will stand on $26 billion, compared to previous rumors of $60 billion.
Economic data also had an effect on the session as deteriorating sectors suddenly showed signs of life. Although the major mover of the day, )ISM Manufacturing Index(, showed a weaker result, coming out at 53.60, compared to a 54.80 figure, pending home sales and construction spending beat economist’s expectations. The housing sector showed that NAR’s Pending Home Sales increased by 3.70%, compared to an expected -0.5%. Even though the number was lower than the previous result, it helped to boost the intraday session.
On the Amex, all of the 9 major sectors presented a positive session, with materials and utilities leading the way higher. Unlike Monday’s session, the financial sector was the lager of the day closing with a mild gain of 0.07%. The broader market closed with a gain of 1.21%, while the Dow Jones finished with a 1.37% profit.
Special – Gold Reaches a New High
The talk of the day was Gold, increasing higher to breach the 1200 mark. After a mild correction last week, this precious commodity reversed sharply on Friday and finished the week with a red hammer candlestick. Even though a negative hammer is less reliable than a positive one, Monday’s confirmation candle gave investors reassurance that was heading higher.
While some analysts are now claiming that Gold could reach the 1400 mark by the end of the year, one must note that the risk on Gold trades is very high. From a technical point of view, all of the indicators are now pointing to over-bought conditions, with the RSI standing at 83.06 points.
Forex
On the Forex market, the Yen crosses presented high volatility yesterday after the BOJ injected an additional 1 trillion yen ($11.5 billion) into short term money markets. The sudden news came 1 day after officials announced a new loan program aimed at stimulating Japan’s economy, and after they mentioned that they intend to maintain low rate levels to help the financial situation.
Even though the news had an immediate effect on the Forex market, helping to boost Yen Counterparts, most of the pairs got stuck around critical levels. The USD/JPY jumped higher, but lost its steam as it touched resistance. The GBP/JPY got stuck around prior resistance of 144.63, last seen in October.
The EUR/JPY and the AUD/JPY also jumped higher, but continued to trade in their secondary down trend, below trend line resistance.
AUD/JPY
Ahead
Looking forward, the next couple of trading days will be characterized by high volatility. Apart from the ADP Nonfarm Employment Change, which is expected to show today a negative -148.00k, compared to last month’s gloomy figure of -203.00k, the ECB will present a wave of data tomorrow, followed by the awaited employment figures from the U.S on Friday.
Although the Non-farm figures are expected to show an improving market, the unemployment rate is currently expected to stay at its double digit figure of 10.2%.
Daily Forex 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.
