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A Look At The Upcoming Week: December 31, 2012

By  |  Market Overview  |  Dec 30, 2012 09:12AM GMT  |   Add a Comment
 
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Last week’s trading session was a very bearish one on Wall Street for leading U.S. stocks. The Dow Jones binary option index declined 1.2% on Friday, a 158.20 point drop, bringing it to 12,938.11. The S&P 500 and the Nasdaq fell significantly as well last week. As a result of ongoing budget talks between President Barack Obama and U.S. Congressional leaders, traders have decided to sell of their stocks. The fiscal cliff still looms ahead as binary option investors wait for a deal.

Although the crude oil commodity dipped on Friday, it was able to climb throughout the previous trading week, closing the week at a higher level of $90.69. The increased demand for energies and the bearish greenback helped oil jump after its recent tumble.

As the world’s major central banks conducted further stimulus, the demand for safe haven currencies decreased during last week’s trading session. This had the greatest effect on the USD and the Japanese yen. The euro and the pound were the most bullish currencies. Traders were feeling optimistic despite the stock market slump last week, and therefore bought into the euro.

Perhaps the leading U.S. stocks will rebound this week. Call options in the Dow Jones binary option index may be the way to go at the start of the trading week.

This week’s main events – Monday, December 31 – Friday, January 4:

Monday December 31:
00:30 GMT AUD Private Sector Credit m/m – Change in the total value of new credit issued to consumers and businesses. Borrowing and spending are positively correlated - consumers and businesses tend to seek credit when they are confident in their future financial position and feel comfortable spending money.

Tuesday January 1:
All Day All Bank Holiday for Most Major Markets

Wednesday January 2:
All Day EUR German Preliminary CPI m/m – Consumer prices account for a majority of overall inflation. Inflation is important to currency valuation because rising prices lead the central bank to raise interest rates out of respect for their inflation containment mandate.

15:00 GMT USD ISM Manufacturing PMI – Survey of about 400 purchasing managers which asks respondents to rate the relative level of business conditions including employment, production, new orders, prices, supplier deliveries, and inventories. It's a leading indicator of economic health - businesses react quickly to market conditions, and their purchasing managers hold perhaps the most current and relevant insight into the company's view of the economy.

Thursday January 3:
13:15 GMT USD ADP Non-Farm Employment Change – Estimated change in the number of employed people during the previous month, excluding the farming industry and government. ADP provides payroll services to US corporations, and they analyze data from around 400,000 customers to derive employment growth estimations.

13:30 GMT USD Unemployment Claims – The number of individuals who filed for unemployment insurance for the first time during the past week. Consumer spending is highly correlated with labor-market conditions.

19:00 GMT USD FOMC Meeting Minutes – It's a detailed record of the FOMC's most recent meeting, providing in-depth insights into the economic and financial conditions that influenced their vote on where to set interest rates.

Friday January 4:
13:30 GMT CAD Employment Change – Change in the number of employed people during the previous month . Job creation is an important leading indicator of consumer spending, which accounts for a majority of overall economic activity.

15:300 GMT USD Pending Home Sales m/m – Change in the number of homes under contract to be sold but still awaiting the closing transaction, excluding new construction. The sale of a home triggers a wide-reaching ripple effect. This will be a leading release during Friday's session.

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