Market Brief
The Greenback extended its Friday’s rally, with little data from the market, and stocks fell after posting new highs. The Dow Jones fell by 0.34% or 32 points to 9,337 with a similar decline in the S&P Index which fell 0.33% to 1,007, crude oil closed down by $0.33 at $70.60, and gold broke below $950 closing $945. The Dollar strength was limited and traded mostly within tight range, unless for the pound which dropped most among major currencies due to continued concerns about the £50B Quantitative Easing expansion, which suggests that worst may not be over yet and still there’s fears of deflation risks, where inflation report on Wednesday could give us a clearer image. The GBP/USD dropped more than 600 pips since its peak last Wednesday at 1.7040 to bottom at 1.6430.
The Euro was little changed against the dollar dropping by 30 pips to close at 1.4144. The Eurozone Sentix Investor Confidence Index came better than expected, rising from -31.3 to -17.0 in July, the highest level in one year. The Yen was able to rebound after the huge loss on Friday, supported by a drop in the stock market and better than expected Japanese machinery orders.
There was no economic releases from the US yesterday but Robert Hall, Chair of the National Bureau of Economic Research’s Business Cycle Dating Committee said in a statement “We are serious about being sure that the apparent upturn is not just a part of a longer decline” adding that the committee will wait for activity to surpass its previous peak, which may take 18 months or more to determine.
The Bank of Japan kept interest rates unchanged at the low record of 0.10%, and refrained from unveiling any new measures as policy makers focused on the risk that recent economic improvement will fail to translate into a sustainable recovery. The bank said that economic conditions stopped worsening, but deflation risks are still present and that is why the overall outlook for the economy is unstable.
China released a string of data for July. Markets greatest focus was on new loans, which came in at CNY355.9bn vs. CNY500.0bn exp. While disappointing to growth hungary traders, it was not weak enough to increase concerns that slowing lending will hinder Chinese growth.
Traders focus now is turning to Wednesday FOMC meeting, but as for today Germany will release the final consumer price index data. From UK the visible trade balance will be released, and from the US we have, Non-Farm Productivity for Q2, unit labor cost, and Wholesale Inventories.
| Global Indexes | Current Level | % Change |
| Nikkei 225 Index | 10.585.46 | 0.58 |
| Hang Seng Index | 20.986.84 | 0.27 |
| Shanghai Index | 3,264.73 | 0.46 |
| FTSE 100 Index | 4,743.44 | 0.45 |
| DAX Index | 5,441.89 | 0.43 |
| SMI Index | 6,014.91 | 0.12 |
| DJIA futures | 9,333.00 | 0.13 |
| World Markets | Current Level | % Change |
| Gold | 948.68 | 0.25 |
| Silver | 14.48 | 0.69 |
| VIX | 24.99 | 0.92 |
| Crude wti | 71.08 | 0.68 |
| USD Index | 79.03 | -0.29 |
| Todays Calender | Estimates | Previous | Country / GMT |
| Trade balance, £ bnJun | -6.6 | -6.3 | GBP / 08.30 |
| Productivity, % q/q ar (y/y)Q2 p | 4.7 (1.9) | 1.6 (1.9) | USD / 12.30 |
| Unit labour costs, % q/q ar (y/y)Q2 p | -2.0 (2.4) | 3.0 (2.2) | USD / 12.30 |
| Wholesale inventories, % m/m (y/y)Jun | -0.9 (-8.7 | -0.8 (-7.6 | USD / 14.00 |
| Corporate goods price index, % y/yJul | -8.7 | -6.6 | JPY / 23.50 |
Currency Tech
AUDUSD
R 2: 0.8695
R 1: 0.8520
CURRENT: 0.8375
S 1: 0.8238
S 2: 0.8125
USDCAD
R 2: 1.1012
R 1: 1.0935
CURRENT: 1.0908
S 1: 1.0633
S 2: 1.0549
EURJPY
R 2: 139.25
R 1: 138.75
CURRENT: 137.23
S 1: 135.99
S 2: 134.30
USDMXN
R 2: 13.305
R 1: 13.070
CURRENT: 12.92
S 1: 12.823
S 2: 12.620
- S: Strong, M: Minor, T: Trendline, K: Keylevel, P: Pivot
