Market Movers of the Day
Asia-Pacific
Australian Trade deficit surprises for the better falling to -1849M
Speech by RBA governor
Europe
BoE rate decision unchanged at 0.5%
ECB rate decision unchanged at 1%
UK NIESR GDP estimate at -0.4%
Swiss CPI at -0.8% suppressing for the worst
UK Manufacturing production gaining 1.7% MoM
UK industrial production down -10.3 YoY less than expected
EU Retail Sales falling –3.6% YoY
Americas
US initial Jobless claims at 512K better than expected
US Nonfarm productivity strongly positive at 9.5% for Q3
US unit labor costs at -5.2% for Q3
The Overall Sentiment
Forex
Rate Decisions coming from the ECB and UK were at the centre with investors focus on rhetoric as key rates were broadly expected to be left unchanged. Both central banks left their rates unchanged with the ECB key rate at 1% and the UK key rate at 0.5%.Both banks seem more upbeat on the economy with the BoE increasing it’s bond purchase by only £25B the smallest amount since the Quantitative easing program was announces.ECB chairman Trichet also hinted emergency liquidity measures will start being unwounded. The statements from both central Bankers were largely perceived as upbeat for the economies especially in the UK which now some suggest will revise its’ GDP upwards. In Asia-pacific the speech of Governor Glen Stevens also drew attention in a day loaded with Central bank statements with the Governor providing a rather positive outlook for the economy and raising the RBA growth forecast of for 2010.Overall the Dollar ended the day weaker but only modestly the Euro closed rather flat at 1.487$, the Sterling moved to the 1.66$ zone and Aussie moved back above 91 Cents.
Equities
Stocks rallied rather aggressively in the US where both the Dow and the NASDAQ surged beyond 2% with the Dow higher by 2.08% and the NASDAQ higher by 2.42%.Gaines in the Dow and S&P were fueled by positive US economic data starting with the Initial Jobless claims figure which stud at 512K and surprised slightly for the better but most importantly the Non-farm productivity at a 9.5% gain for Q3 showing healthy upward momentum for the US Economy. Cisco earnings release was also quite a market mover as the better than expected results pushed the NASDAQ to strong gains. At the day’s end European equities gained but only slightly while US equities advanced higher with the Dow Industrial closing above the 10,000.
Commodities
In the Commodities play trade was rather flat, Gold returned to the 1090$ zone after testing support at 1085$ and oil hovered around the 80$. Although the day was rather flat the fact commodities held rather well against selling pressure and remained at their high levels pointed upbeat sentiment is still around especially for the yellow metal which is now targeting the 1100$ milestone.
The Day Ahead
The sentiment will be stirred by economic data as the day will by loaded with highly weighted economic indicators starting with unemployment figures in Switzerland, Canada and the US where market eyes will focus on wither unemployment will reach 10%. The Unemployment figure will get special attention as many consider the unemployment to be the lead for future Fed monetary policy change. Another highly regarded economic indicators due are the US is the Nonfarm payrolls and Average hourly earnings which will also reflect strongly on the US Job market. All three are considered to be one of the most highly weighted economic indicators in the US and are known for having strong impact on market sentiment. Additional important economic indicators to watch will be the PPI figures in UK which will reflect on inflation prospect and in Germany factory orders will show industry sentiment in Germany Europe’s largest economy. However both economic indicators are expected to take the back seat in terms of market attention with the US indicators at the spotlight.
Technical Analysis
GBP/USD
Bullish Scenario– A close above of the 1.67 would push the pair to a bullish zone rallying strongly to test the 1.71 resistance.
Target- 1.71
Bearish scenario– After failing to break the 1.67 resistance a close below 1.625 would ignite a strong bearish cycle.
Target A– 1.575
Target B-1.53
Market Analysis provided by eToro
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