S&P 500 (Sep 10) INTRADAY
Review Equities finished in positive territory though off their best levels as participants noted that the encouraging Initial Jobless Claims data may have been skewed after nine states did not file their numbers as a result of the Labour Day holiday. In the latter half of the session, there were reports that Deutsche Bank (ADR -3.18%) was considering a EUR 9bln share sale which also slightly weighed on sentiment. In addition, there were some strong gains for Adobe (12.11%) after Apple (0.06%) relaxed restrictions placed on App developers. Overall, it was a quiet end to the session and the E-mini S&P closed up 0.5% at 1102.75
Strategy Looking ahead we are expecting another quiet session with the economic calendar only offering US wholesale Inventories this afternoon. Chinese trade balance overnight narrowed to $20bn but figures showed strong import and export growth. We expect a consolidation of the recent uptrend with markets preferring to wait for further important economic data next week before making its next major move. We remain cautiously bullish in the medium term.
Alternative Scenario Negative news flow could lead to a break-out of the previous support at 1,092.00 opening the way for a more aggressive move back to the week’s low at 1,086.25
EUR/USD INTRADAY
Review Another good European bond auction yesterday morning further alleviated Eurozone debt con-cerns with the Irish auction being well received. This boosted the Euro off its lows for the week—Better than expected US Jobless claims extended the rally to test Wednesday’s high at 1.2764. The latter half of the US session saw a reversal however which was accelerated by the Deutsche Bank Share sale rumours meaning the Euro gave back all of its gains. Overnight we have seen a new low for the week at 1.2644 before a good European open as caused further dollar weakness. Essentially the EUR/USD is stuck in a range, consolidat-ing the Eurozone Debt fear sell off at the beginning of the week.
Strategy Looking ahead we are expecting another quiet session with the economic calendar only offering US wholesale Inventories. Chinese trade balance overnight narrowed to $20bn but figures showed strong import and export growth. We expect the recent range to hold with a slight bias to the upside with markets preferring to wait for further im-portant economic data next week before making its next major move.
Alternative Scenario Negative euro-zone news flow could lead to a break-out of the previous support at 1.2644 opening the way for a more aggressive move towards 1.2480.
Crude Oil (Oct 10) INTRADAY
Review Oil climbed to near a three-week high yesterday as economic indicators from the U.S. and Asia restored confidence that the recovery will stimulate fuel demand. Oil was set for a weekly increase of 1.5 percent as U.S. jobless claims fell, Japan boosted its estimate of economic growth, and China increased imports of crude. Prices gained after a leak prompted Enbridge En-ergy Partners LP shut a pipeline that can carry more than one-third of oil to the U.S. Midwest. Crude rose even as the International Energy Agency left its estimate for oil demand for this and next year little changed. Crude demand worldwide will average 87.9 million barrels a day in 2011, the IEA said today in its monthly Oil Market Report, unchanged from last month’s forecast.
Strategy Looking ahead we are expecting another quiet session with the eco-nomic calendar only offering US wholesale Inventories this afternoon. Chinese trade balance overnight narrowed to $20bn but figures showed strong import and export growth. We expect a consolidation of the recent uptrend with markets pre-ferring to wait for further important economic data next week before making its next major move. We remain cautiously bullish in the medium term.
Alternative Scenario Negative fundamental news flow could lead to a break-out of the previous support at $74.34 opening the way for a more aggressive move to Tuesday’s low at $72.65.
