Market Brief
The Dollar gained against the major currencies as weaker economic data from the US lowered risk appetite amid expectations from the central bank (ECB, BOE) rate decisions due today. The ISM Non-Manufacturing Composite showed a reading of 46.4 lower than expectations of 48 while the factory orders rose 0.4%, a rise for the third straight month. The non-manufacturing sector which comprises of almost 90% of the total economy declined showing concerns over unemployment and that the stimulus packages were more favorable for the manufacturing sector which had posted better results. Also released was the ADP employment figure which showed that the US cut 371,000 jobs against expectations of a cut of 350,000 pushing for concerns of a rising unemployment rate expected to be 9.6%.
The equity markets feLl over the employment data over concerns of a slower recovery from the recession. The Dow index closed at 9280 down 0.4% from the previous close while the S&P 500 closed at 1002 down 0.3%. The Euro was mixed ahead of the rate decision moving in the range of 1.4370 and 1.4440 despite better than expected PMI data showing a reading of 47 against previous figure of 44.6. The pound too declined to 1.6930 after reaching highs of 1.7043 over concerns of the BOE adding additional bond purchase plans but later moved up above 1.7030 as some analysts predicting that the BOE will halt bond purchase plans after better than expected housing, services and manufacturing data showed signs that the economy is improving.
Today the important news to note would be the much awaited rate decision by the ECB and the BOE which are expected to keep rates unchanged at 1% and 0.5% respectively although the conference following the decision would hold the key as the central bank governors would make statements on the economic outlook and any further stimulus packages if any. From the US, the initial jobless claims would be the most important as higher job loss reading could lead to dollar strengthening as investors resort to risk aversion.
| Global Indexes | Current Level | % Change |
| Nikkei 225 Index | 10,388.09 | + 1.32 |
| Hang Seng Index | 20,593.79 | + 0.48 |
| Shanghai Index | 3,397.94 | - 0.89 |
| FTSE futures | 4,622.00 | - 0.30 |
| DAX futures | 5,392.50 | + 0.62 |
| SMI Futures | 5,943.00 | + 0.55 |
| DJIA futures | 9,246.00 | + 0.01 |
| World Markets | Current Level | % Change |
| Gold | 963.88 | + 0.04 |
| Silver | 14.73 | + 0.20 |
| VIX | 24.90 | + 0.04 |
| Crude wti | 71.60 | - 0.51 |
| USD Index | 77.57 | + 0.07 |
| Todays Calender | Estimates | Previous | Country / GMT |
| NBC interest rate announcement, % Aug | 1.50 | 1.50 | CZK / --- |
| Halifax house price index, % m/m (3m y/y) Jul | 0.6, -12.3 | -0.5, -14. | GBP / 08.00 |
| Germany: New manufacturing orders, % m/m (y/y) Jun | 0.8^,-26.5 | 4.4, -28.8 | EUR / 10.00 |
| BoE Bank Rate decision, % Aug | 0.50 | 0.50 | GBP / 11.00 |
| ECB rate announcement, % Aug | 1.00 | 1.00 | EUR / 11.45 |
| ECB press conference | -- | -- | EUR / 12.30 |
| Initial jobless claims, thous (4wk mvg avg) 01-Aug | 595 (566) | 584 (559) | USD / 12.30 |
Currency Tech
AUDUSD
R 2: 0.8695
R 1: 0.8520
CURRENT: 0.8438
S 1: 0.8340
S 2: 0.8239
EURJPY
R 2: 139.22
R 1: 138.30
CURRENT: 137.12
S 1: 134.29
S 2: 132.80
USDCAD
R 2: 1.1013
R 1: 1.0935
CURRENT: 1.0709
S 1: 1.0633
S 2: 1.0545
USDMXN
R 2: 13.306
R 1: 13.225
CURRENT: 13.04
S 1: 12.987
S 2: 12.85
- S: Strong, M: Minor, T: Trendline, K: Keylevel, P: Pivot
