Despite the mixed closing of the US major stocks indexes, Shanghai composite could make remarkable progress in the beginning of today session, after news about PBOC injection of 50b Yuan for 14 day reverse repo and 50b Yuan for 28 day reverse repo setting USDCNY today down to 6.5510 from 6.5783 yesterday.
Jan US ISM came yesterday unchanged in the contraction territory below 50 at 48.2 as it has been in December versus 48 expected.
US PCE which is the Fed's favorite gauge of inflation rose by 0.6% year on year in December, after increasing by 0.5% in November with no monthly change of US consumer spending figure which accounts for 70% of US GDP versus 0.1% expected, after soaring by 0.5% in November, while the personal income rose by 0.3% in December as the same as November versus 0.2% expected.
The Fed's vice president Stanley Fischer said after the session that the next Fed's step is still unclear amid the global uncertainty adding that it is too difficult to gauge the impact on the U.S. economy from recent turmoil in financial markets and uncertainty over China.
His comments supported the Gold further and lowered the future rates of S&P 500, as they assured the Fed's worries and also uncertainty which can delay the next Fed's tightening step.
The FOMC has already indicated last week the current need for waiting and see for assessing the global economic slowdown and the financial development implications for the labor market, the inflation, and for the balance of risks to the outlook.
The RBA's decision which usually comes on the first Tuesday of each month has been followed by statement from RBA's Chief Governor Glenn Stevens saying that the global economy is continuing to grow but at slightly slower pace than earlier expected causing pressure on commodities and energy prices making it appropriate for monetary policy to continue to be accommodative.
His comments left the door opened for more easing steps to be taken and did not also give higher appreciation of the inflation which rose by 1.7% yearly in the fourth quarter of last year saying that was partly caused by declining prices for oil and some utilities, but underlying measures of inflation are also low at about 2%, with growth in labor costs continuing to be quite subdued as well, and inflation restrained elsewhere in the world, consumer price inflation is likely to remain low over the next year or two.
Jan US ISM came yesterday unchanged in the contraction territory below 50 at 48.2 as it has been in December versus 48 expected.
US PCE which is the Fed's favorite gauge of inflation rose by 0.6% year on year in December, after increasing by 0.5% in November with no monthly change of US consumer spending figure which accounts for 70% of US GDP versus 0.1% expected, after soaring by 0.5% in November, while the personal income rose by 0.3% in December as the same as November versus 0.2% expected.
The Fed's vice president Stanley Fischer said after the session that the next Fed's step is still unclear amid the global uncertainty adding that it is too difficult to gauge the impact on the U.S. economy from recent turmoil in financial markets and uncertainty over China.
His comments supported the Gold further and lowered the future rates of S&P 500, as they assured the Fed's worries and also uncertainty which can delay the next Fed's tightening step.
The FOMC has already indicated last week the current need for waiting and see for assessing the global economic slowdown and the financial development implications for the labor market, the inflation, and for the balance of risks to the outlook.
The RBA's decision which usually comes on the first Tuesday of each month has been followed by statement from RBA's Chief Governor Glenn Stevens saying that the global economy is continuing to grow but at slightly slower pace than earlier expected causing pressure on commodities and energy prices making it appropriate for monetary policy to continue to be accommodative.
His comments left the door opened for more easing steps to be taken and did not also give higher appreciation of the inflation which rose by 1.7% yearly in the fourth quarter of last year saying that was partly caused by declining prices for oil and some utilities, but underlying measures of inflation are also low at about 2%, with growth in labor costs continuing to be quite subdued as well, and inflation restrained elsewhere in the world, consumer price inflation is likely to remain low over the next year or two.
Instrument in Focus: AUDUSD
AUDUSD could rise in the beginning of today Asian session supported by the improvement in the Chinese equities market to be traded near 0.7120 but it came under pressure to fall to 0.7070, after the RBA's decision to maintain the interest rate unchanged as it has been since last May. 5 at 2%.
AUDUSD daily Parabolic SAR (step 0.02, maximum 0.2) is now its ninth day of being below the trading rate reading today 0.6934.
AUDUSD daily RSI-14 is referring now to existence in its neutral area reading now 51.261 and also its daily Stochastic Oscillator (5, 3, 3) which is more sensitive to the volatility is having its main line now in the neutral region but close to the overbought area above 80 reading now 73.936 and also its signal line which is referring to 76.697, after failing to get over 0.7139
Important levels: Daily SMA50 @ 0.7141, Daily SMA100 @ 0.7145 and Daily SMA200 @ 0.7333
S&R:
S1: 0.7040
S2: 0.6916
S3: 0.6825
R1: 0.7139
R2: 0.7212
R3: 0.7359
AUDUSD Daily Chart:
Commodities: Gold
The gold kept its creeping up to reach $1130.23 supported by lower interest rate outlook in US to be in important meeting now with it daily SMA200.
The gold could gather momentum, after getting over its daily SMA100 following surpassing $1112.75 which capped it on last Nov. 4.
$1071.22 could help the gold previously to bounce up again above its daily SMA50 forming a floor at $1057.98 which drove the gold to start being above its daily Parabolic SAR (step 0.02, maximum 0.2) for 22 consecutive days reading today $1106.56.
XAUUSD daily RSI-14 is referring now to existence in its neutral area reading 63.515, while its daily Stochastic Oscillator (5, 3, 3) which is more sensitive to the volatility is having now its main line in the neutral region but close to the overbought area above 80 reading 78.521 and leading its signal line which is reading now 74.802.
Important levels: Daily SMA50 @ $1082.33, Daily SMA100 @ $1106.11 and Daily SMA200 @ $1130.91
S&R:
S1: $1108.26
S2: $1071.22
S3: $1057.98
R1: $1138.05
R2: $1149.84
R3: $1162.45
XAUUSD Daily chart:
Hot instrument: SP-MAR16
SP-MAR16 came under pressure following Fischer's comments to fall below 1920, after facing difficulty to get higher than 1940 yesterday.
SP-Mar16 daily RSI is reading now 47.638 in its neutral region, while its daily Stochastic Oscillator (5, 3, 3) which is more sensitive to the volatility is having now its main line into the overbought area above 80 reading 85.510, while its signal line is still unable to enter the overbought area to continue to be in the neutral region but close to the overbought area reading now 78.737.
SP-Mar16 daily Parabolic SAR (step 0.02, maximum 0.2) is referring today to 1844.24 in its eighth day of being below the trading rate, after rising extension last Friday reached 1902 on last Jan. 22.
Important levels: Daily SMA50 @ 1991.85, Daily SMA100 @ 2001.71 and Daily SMA200 @ 2035.55
S&R:
S1: 1864.50
S2: 1851.25
S3: 1836.25
R1: 1946.25
R2: 1964.50
R3: 2016.50
SP-MAR16 Daily chart:
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