Equities – US data didn’t help
Initial claims fell to 451k last week, the lowest in 2 months and certainly a sign of relief – another one after a recent upbeat payrolls report. On top of that a trade deficit narrowed substantially, mostly on the drop in imports, suggesting the previous, scary release (wide deficit and high imports) was just a one-off phenomenon. These figures (especially claims) need confirmation but they point in a right direction.
The bundle helped major US indices make one-month highs but soon after the Wall Street opening bears took over. That may suggest a lack of fuel at the bulls’ camp in the short term.
USDJPY – now its gov’s try
After a failed attempt from the BoJ last week (to weaken the yen) now it was the government to have a try. The Japanese PM announced fresh stimulus measures worth nearly 11 bln USD or 0,2% of the Japanese GDP. The yen weakened but only marginally and only for a while. The thing is that the Japanese merely copy the US moves (noticed Obama’s package this week?) and do it in a more cautious way.
The USDJPY is still moving in a downward channel (both in short and a longer term) with the nearest target possibly at 83,20. The pair didn’t react to the upward revision of the Japanese GDP for the 2nd quarter (0,4% q/q from 0,1% q/q initially released) but the data may further postpone a reversal on the pair.
GOLD – falling star on a daily
A rising wave of ads on funds investing in a given asset may often be a sign (especially for contrarians) that the trend is just about to end. Picking a moment of a trend reversal on gold is not an easy task but there are signs of at least a correction. The price failed to make new historical highs (at 1265 USD per ounce) and drew a falling star formation at the resistance, initially confirmed by a black candle with a large body yesterday. That could well make a double top leading the price at least to the support zone of 1156-1170 USD.
Events to watch – Canadian payrolls and Chinese mystery
Friday was bound to softly introduce the weekend with the Canadian payrolls (7.00 ET, 13.00 CET, +30k expected) as the only major figure. Not anymore. The Chinese rescheduled the release of the key monthly figures (CPI, PPI, output, sales, fixed investments) from Monday to… Saturday! The rumors are the data may cause another monetary tightening during the weekend so bear that in mind at the opening on Monday.
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Przemysław Kwiecień, Chief Economist |
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