Daily Market Review - 10th August 2012

· German CPI (MoM) (GER, 07:00 GMT)

· PPI Input (MoM) (GB, 09:30 GMT)

· Unemployment Rate (CAN, 08:30 GMT)

· Import Price Index (MoM) (U.S, 13:30 GMT)

· Federal Budget Balance (U.S, 19:00 GMT)

U.S Labor Department figures showed yesterday in Washington that the Jobless claims unexpectedly dropped by 6,000 to 361,000 in the week ended Aug 4. On the other hand, The U.S. trade deficit narrowed more than forecast in June. The gap shrank 11 percent to $42.9 billion, from $48 billion in May, Commerce Department figures showed today in Washington.

Bloomberg News reported that, Japan’s economy probably grew last quarter at half the pace of the previous three months, a slowdown analyst predict is deepening as Europe’s debt crisis and the yen’s gains erode exports. Gross domestic product expanded an annualized 2.3 percent in the three months through June, compared with 4.7 percent in the first quarter, according to the median estimate of 24 economists surveyed by Bloomberg News. The Cabinet Office will release the report on Aug. 13.

The intensification of fiscal consolidation in some euro area nations and higher uncertainty over debt crisis are set to weigh on overall growth prospects, results of the Survey of Professional Forecasters released with the European Central Bank monthly bulletin showed Thursday. The Eurozone economy is forecast to shrink 0.3 percent this year, compared to the prior estimate of 0.2 percent fall. The 2013 growth outlook was lowered to 0.6 percent from 1 percent.

EUR/USD: The EUR/USD was trading lower at 1.22918 at the time of writing on better-than-expected U.S data yesterday and the release of poor trade balance data in China early today. The EUR is suffering because of the nonstop worries about the economic outlook for the euro zone and set for weekly drop in before data forecast to show the region’s economy shrank as its debt crisis remained unresolved. The Gross domestic product in the euro area probably contracted 0.2 percent in the three months through June after being unchanged in the first quarter, according to the median forecast of economists in a Bloomberg News survey. The European Union’s statistics office will report the figure on Aug. 14. Today, the events likely to bring volatility on the EUR/USD in the European session ahead are; German CPI and HCPI at 07:00 GMT, followed 45 minutes later by French industrial, manufacturing production, and Gov budget balance, and Italian CPI at 09:00 GMT. While later in the day, the U.S will release the Import Price Index at 13:30 GMT, ECRI Weekly Annualized (WoW) at 15:30 GMT and Federal Budget Balance at 19:00 GMT. The resistance level is at 1.23883 and the support level is at 1.22278.
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AUD/USD: The AUD/USD was trading lower at 1.05134 at the time of writing after big disappointment with Chinese trade balance data and positive data from the U.S. The pair touched a peak of 1.06136 intra trade yesterday, after the Reserve Bank of Australia raised its 2012 growth forecast on stronger-than-expected consumer demand, while saying the sustained currency strength could prove more of a drag on the economy than in the past. Moreover, Australia’s unemployment rate has remained in a range of 5 percent to 5.3 percent for the past 15 months. Today, the events likely to bring some fluctuations on the AUD/USD are; the Import Price Index, ECRI Weekly Annualized (WoW) MT and Federal Budget Balance data in the U.S. Latest developments in the Eurozone, china and U.S will affect sentiments. The resistance level is at 1.06136 and the support level is at 1.04738.
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Oil (WTI): Oil was trading lower at 93.005 at the time of writing as China’s export growth contracted, adding to signs the global economy is weakening. Yesterday, stronger-than-forecast U.S. economic data boosted the outlook for economic growth in the world’s largest crude-oil consumer. Investors should closely monitor the economic data in the Eurozone, China and U.S to get visibility on the trend of the commodity. Ongoing talks that the central banks will use monetary easing tools to stimulate their economies will continue to affect sentiments on the market and persistent worries over instability in the Middle East and fears over disruptions to supplies ahead of upcoming maintenance in the North Sea will continue to support oil prices. The resistance level is at 94.688 and the support level is at 91.707.

DAX: The DAX was trading at 6927.50 at the time of writing after China reported export growth slowed more than economists’ estimates. Sentiments faded after the ECB said in its monthly bulletin that the economic outlook for the euro zone faced a number of downside risks, with financial market tensions and their potential impact on growth posing the key threats. The German CPI and HCPI at 07:00 GMT, followed 45 minutes later by French industrial, manufacturing production, and Gov budget balance, and Italian CPI at 09:00 GMT will be the events likely to affect the market for DAX on the European session. While later, the U.S will release the Import Price Index at 13:30 GMT, ECRI Weekly Annualized (WoW) at 15:30 GMT and Federal Budget Balance at 19:00 GMT. Market sentiments and speculations will also have an impact on the index.