Market Movers of the Day
Asia-Pacific
RBA meeting minuets
Europe
Swiss adjusted retail sales falling -1.6% YoY
UK Core CPI at 1.8% YoY
UK Retail Sales index falls -0.8% YoY slightly less than consensus
EU trade balance for September strong at €6.8B
Americas
US PPI lower by -1.9% weaker than expected
US Net TIC flows rising to $133.5B
US Industrial production disappointing with a gain of 0.1% MoM
US Capacity utilization at 70.7% rather flat MoM
The Overall Sentiment
Forex
After a rather long period of being under selling pressure the Greenback rebounded across the board largely due to remarks made by the Fed chairman a day before. In what investors consider to be a rather rare occasion the Fed chairman Bernanke commented on the Dollar exchange rate stressing the Fed is alert to the implications of the Dollar’s exchange rate. The Greenback pushed higher a head of the statement only to give back the gains a few minutes later in a rather volatile trade. However a day later as investors were able to spare one more moment of thought to the Chairman’s remarks, counter dollar bets moved to the red across the board with high yielding/commodity currencies retreating the most against. The Euro fell below the 1.49$ level, the Aussie sank below the 93 cents and the Dollar Swiss trade tasted the 1.02 area. The sterling and Yen traded rather flat as the elevated risk aversion supported the Yen and a slightly higher inflation figures in the UK snapped bets debasing(QE) of the sterling will continue by the BoE. The Sterling closed around 1.68$ and the JPY hovered around the 89¥ to the Dollar.
Equities
Wall Street ended the day rather flat as weak industrial production and PPI figures pointed economic weakness in the US. Although the weak data and the Strong Dollar weighed on the US stock market benchmark indexes eventually ended the day in the money. The Dow gained 0.29% and the S&P was up by a modest 1 point. One stock that drew attention was the Oil giant Exxon mobile, Berkshire Heathway the holding company controlled by the investment Guru Warren Buffet disclosed it holds a small number of Exxon Mobile shares, the stock gained close to 1% and closed above 75$.
Commodities
Although the Dollar had a relatively strong Day Commodities held rather well. Gold after reaching a record above 1140$ an ounce retraced a bit but held above 1130$ and silver retreated from 18.5$ but held above the 18$ key level. Oil failed to surge above the 80$ but held above the 79$.
The Day Ahead
In the London session market eyes will be focused on the Bank of England minuets as investors try to extract more on the BoE quantitative easing policy and hence to price the sterling amid weak economic environment on the one hand and sticky inflation on the other.UK industrial data will also gather at least some attention as policy markers seek for the UK industry to recover due to a weaker currency. Later in the day inflation figures from Canada and the US are due with both economies expected to show subdued inflationary pressures especially in the US where the weak Producer price index pointed deflationary pressures are at act rather than inflationary. The concluding data for the day will be the US housing start and building permits with looming worries weak US consumer and high unemployment could hamper the already fragile real estate market, consensus still predicts a rather flat gain MoM but any surprise for the downside could push investors to embrace safe haven bets once again.
Technical Analysis
USD/CHF Daily
Bullish Scenario– A close above 1.035 would signal the pair has broken the flat trend which dominated the pair in recent days and would provide the pair a strong upward momentum.
Target A-1.05
Target B-1.07
Bearish scenario– A break of the 1$ mark would pushed the pair to revisit the all time high around 0.96
Target A– 0.97
Daily Forex Market Analysis provided by eToro
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