Market Review May 4 2012
Economic Events for May 4, 2012 for the European and US Markets
08:15 CHF Retail Sales
Retail Sales measure the change in the total value of inflation-adjusted sales at the retail level. It is the foremost indicator of consumer spending, which accounts for the majority of overall economic activity.
10:00 EUR Retail Sales
Retail Sales measure the change in the total value of inflation-adjusted sales at the retail level. It is the foremost indicator of consumer spending, which accounts for the majority of overall economic activity.
13:30 USD Nonfarm Payrolls
Nonfarm Payrolls measures the change in the number of people employed during the previous month, excluding the farming industry. Job creation is the foremost indicator of consumer spending, which accounts for the majority of economic activity.
13:30 USD Unemployment Rate
The Unemployment Rate measures the percentage of the total work force that is unemployed and actively seeking employment during the previous month.
15:00 CAD Ivey PMI
The Ivey Purchasing Managers’ Index (PMI) measures the activity level of purchasing managers in Canada. A reading above 50 indicates expansion; a reading below 50 indicates contraction. The index is a joint project of the Purchasing Management Association of Canada and the Richard Ivey School of Business. Traders watch these surveys closely as purchasing managers usually have early access to data about their company’s performance, which can be a leading indicator of overall economic performance.
Euro Dollar
EURUSD (1.3152) The EUR/USD is currently trading at 1.315 level. Euro is set for a biggest weekly decline in a month, on account
of the elections in France and Greece which will be held this weekend. The leadership changes will lead to the increasing concerns about the euro zone’s austerity efforts. Also, euro was lower against US dollar on account of the encouraging jobs data from the US. It could see minor pull back on the back of ECB president’s stance on keeping interest rates at 1 percent. Immediate support is seen at 1.3090 (recent low), while the resistance comes at 1.329level. Slight appreciation is possible till 1.34. Overall bearish target 1.30 levels and below. 1-3 Months horizon, bearish range 1.25-1.33
The Sterling Pound
GBPUSD (1.6185) GBP is trading on a positive note at 1.618 levels. The sterling rose to its 22 month high against euro, as concerns about economic weakness in the euro zone pushed investors towards the relative safety of the UK currency. Also, Britain’s service sector remained in expansionary territory suggesting that the UK economy is in better state than the Euro zone.
The UK PMI surveys this week were encouraging and at least were above 50. The support can be seen near 1.6080 levels (20 day EMA), while immediate resistance is at 1.6303 levels.
Asian –Pacific Currency
USDJPY (80.18) Japan is on holidays the rest of the week, removing some liquidity from the Asian session. USDJPY has shifted back above 80, in part due to comments from S&P that political uncertainty is weighing on its credit rating. Kimeng Tan, senior director for sovereign ratings, suggested that “if the political environment deteriorates …, then we may have to take away support from the policy front, in which case the rating might come down”. Japan is rated AA by both S&P and Fitch with a negative outlooks and Aa3 by Moody’s. A rating downgrade would be support a higher USDJPY.
Gold
Gold (1636.50) Gold is trading at $1636 levels. Support is at 1622 level, whereas strong resistance can be seen near 1672 level. Overall look at a range of 1-3 months at 1550-1650 levels. Overall Target 1550 levels
Crude Oil
Crude Oil (102.69) U.S. crude futures fell for a second session, falling more than 2 percent on the data indicating slowing economic growth and on increased OPEC production. Also, higher crude production from Saudi Arabia and data showing rise in the U.S. crude inventories in six straight weeks have led the prices to come down. Strong near term support is at 101.75 levels and immediate resistance at 105.60 (recent high).
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