Market Brief
The US Dollar continued its weakness against the majors as US stocks ended their 4 day losing streak as Chain store sales exceeded forecast and Chinese equities rallied the most in six months. Chain stores such as Costco rallied 8.6%, Gap rallied 7.6% while Alcoa and Caterpillar helped move the Dow Jones index higher as the Shanghai Composite Index rallied 4.8%.
Despite higher Jobless Claims from the US as well as minor increase in the Non-Manufacturing Composite data, the stocks moved up in the US bouyed by the Chinese stock market and higher retail sales. Initial Jobless Claims data showed that 570,000 claims were made for the current week while the total claims added to 6.243 million which briefly moved the US Dollar higher across the board.
European Central Bank (ECB) kept its rates unchanged at 1% and President Trichet added that the rates are appropriate and would be maintained throughout 2009 also adding that the recovery would be slow and that there are no immediate signs of withdrawal from the stimulus measures. He also added that the Euro Zone GDP will grow 0.2% in 2010 against previous expectation of a contraction of 0.3% while the inflation would average at 0.4% in 2009 and 1.2% in 2010 while still remaining below the target inflation rate of 2%. The Euro fell against the US Dollar to 1.4237 after Trichet’s remarks while the Pound fell to 1.6305 erasing the gains earlier in the morning session.
Gold rallied to a high of $997.70 while Silver rallied to a 13 month high to $16.15 as a weaker Dollar spurred the rally in the metals. Gold will continue to be supported by a weaker US Dollar and may soon cross the $1000 level as investors shift towards the metals backed by the weakening in the US Dollar as the Gold crossed the technical resistance level of $980 earlier in the trading session.
The US Non-Farm Payrolls data would be the most important data for the day as lesser jobs are expected to be lost for the month of August giving signs of added recovery while the unemployment rate is expected to climb to 9.5%. The Dollar has been weakening ahead of the Payrolls data and the US Dollar would have to be closely monitored ahead of the data at 1230 GMT which could help determine the state of the economy while also giving importance to the rising metal prices.
| Global Indexes | Current Level | % Change |
| Nikkei 225 Index | 10,187.11 | -0.27 |
| Hang Seng Index | 20,372.36 | 3.09 |
| Shanghai Index | 3,003.19 | 0.58 |
| FTSE 100 Index | 4,835.45 | 0.81 |
| DAX Index | 5,341.55 | 0.75 |
| SMI Index | 6,093.12 | 0.32 |
| CAC 40 Index | 3,571.45 | 0.5 |
| World Markets | Current Level | % Change |
| Gold | 989.5 | -0.82 |
| Silver | 15.96 | -2.03 |
| Crude wti | 68.41 | 0.66 |
| Todays Calender | Estimates | Previous | Country / GMT |
| Net Change Employment | -20K | -44.5K | CAD /11.00 |
| Unemployment Rate | 8.80% | 8.60% | CAD / 11.00 |
| Average Hr Earnings | 2.20% | 2.50% | USD / 12.30 |
| Change in Non-Farm Payrolls | -230K | -247K | USD / 12.30 |
| Unemployment Rate | 9.50% | 9.40% | USD / 12.30 |
| Ivey Purchasing Managers Index | 54 | 51.8 | CAD / 14.00 |
| G20 Meeting in London | - | - | ---- / 15.00 |
Currency Tech
AUDUSD
R 2: 0.8520
R 1: 0.8479
CURRENT: 0.8417
S 1: 0.8240
S 2: 0.8156
USDCAD
R 2: 1.1125
R 1: 1.1100
CURRENT: 1.0998
S 1: 1.0870
S 2: 1.0790
EURJPY
R 2: 135.00
R 1: 134.20
CURRENT: 132.40
S 1: 130.99
S 2: 130.47
USDMXN
R 2: 13.845
R 1: 13.790
CURRENT: 13.547
S 1: 13.330
S 2: 13.200
- S: Strong, M: Minor, T: Trendline, K: Keylevel, P: Pivot
