Market Movers of the Day
Asia-Pacific
*Japanese Industrial Production at 0.5%, in line with market expectations
Europe
*UK Rightmove House Price Index worse than expected at –2.2%
*Swiss PPI at 0.0% as expected
*EU Employment Change for 3Q worse than forecasted -2.1% annualized
*EU Industrial Production worse than expected at -11.1% annualized
Americas
*Canadian Capacity Utilization fell to 67.5% in the third quarter
The Overall Sentiment
Equities
Stock markets rose around the globe as Abu Dhabi, the richest country of the UAE, declared it will support Dubai World consortium with $10 billion, a week after it announced a renegotiation of its debt. In the US, EXXON Mobile stated it will acquire XTO Energy for $31 billion but its shares dropped by 4.3%, thus limiting the advance of the S&P to a modest 0.7%. In Europe, the main indices also climbed as the news of Abu Dhabi’s intervention relieved concerns about Dubai World defaulting on its debt. The British FTSE 100 added 1% driven by financial institutions and the German DAX rose 0.8%.
Forex
The Dollar weakened in a day with no economic data releases coming from the US. EUR/USD advanced from 1.46 to the 1.4650 level in a relatively quiet manner, following the huge sell-off that closed last week. The Pound experienced great volatility in early trading hours bouncing between 1.62 and 1.63 against the Greenback to finally settle slightly above 1.63. All Commodity linked currencies climbed versus its US counterpart. AUD/USD consolidated around 0.9165 ahead of the RBA’s Monthly Minutes. The Yen declined against most majors as Abu Dhabi’s support of Dubai World’s debt alleviated worries of a default reducing the demand for safe-haven currencies.
Commodities
The weak Dollar helped push Gold up for the day, from last week’s lows around $1110 to a closing above $1126. Silver advanced as well, ending slightly below $17.35. Crude Oil recuperated modestly above $69 with a brief intraday visit over $70, drifting a little lower to close around $69.60.
The Day Ahead
The day will start early in Australia with the Dwelling Starts, which is seen as a key indicator of the Australian housing market’s health. The RBA Minutes will be closely followed by traders to try to assess the chances of further rate hikes after three consecutive months of rising interest rates. In Europe, the Swiss Industrial Production and the British CPI are due for release. The ZEW Survey will shed light on the current economic sentiment of investors in Germany and the Euro-zone. During the US session Canada will release its Leading Indicators and the US PPI is expected to rise indicating commodity inflation. Towards midnight GMT the attention will go back to the Asia-Pacific region for the Australian Westpac Leading Index and the Japanese Tertiary Industry Index.
Technical Analysis
EUR/GBP DAILY
After a pronounced bullish trend that originated in early August EUR/GBP peaked just above 0.94 and changed direction developing a bearish tendency. The last sessions, although volatile, are in line with the recent downwards movement, presenting the opportunity to open a Short position to take advantage of the current trend towards the next reliable support at 0.8835.
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.
