Daily Market Review - 22nd August 2012

· Core Retail Sales (MoM) (CAN, 13:30 GMT)

· Existing Home Sales (U.S, 15:00 GMT)

· Crude Oil Inventories + Gasoline Inventories (U.S, 10:30 GMT)

· BoC Gov Carney Speaks (CAN, 16:00 GMT)

· FOMC Meeting Minutes (U.S, 19:00 GMT)

Sales of existing homes probably climbed in July from an eight-month low, adding to signs U.S. housing may pick up in the second half, economists said before a report today. Purchases rose 3.2 percent to a 4.51 million annual rate, following a decline in the prior month, according to the median forecast of 73 economists surveyed by Bloomberg. Buoyed by cheaper properties and record-low mortgage costs, demand for real estate is bolstering the industry that helped trigger the recession. Minutes of the Federal Reserve’s latest meeting, also due today, will be a reminder that policy makers are monitoring data such as housing to determine whether the world’s largest economy needs more stimulus, according to Bloomberg News.

Japan reported a wider-than-expected trade deficit in July as Europe’s sovereign-debt crisis and a slowdown in China dragged down exports and higher oil prices boosted imports. The shortfall was 517.4 billion yen ($6.5 billion), after a revised 60.3 billion yen surplus in June, the Finance Ministry said in Tokyo today.

German Chancellor Angela Merkel’s party said concessions are possible for Greece so long as Prime Minister Antonis Samaras shows a willingness to meet the main targets set out in his country’s bailout program. Samaras travels to Berlin and Paris on Aug. 24 and 25 after French President Francois Hollande and Merkel meet in the German capital on Aug. 23. Luxembourg Prime Minister Jean-Claude Juncker, who heads the group of euro-area finance ministers, visits Greece tomorrow and will discuss a request by Samaras for a two-year extension to the indebted nation’s fiscal adjustment program.

EUR/USD: The EUR/USD was rose to a peak of 1.24807 against the dollar yesterday, after a senior lawmaker with Chancellor Angela Merkel’s party said; concessions are possible for Greece so long as Prime Minister Antonis Samaras shows a willingness to meet the main targets set out in his country’s bailout program, fuelling optimism on the Greek crisis. Today, the pair was trading at 1.24644 at the time of writing on slight market corrections, as no major EUR macro data will be released on the European session. The main risk events for the pair will come later on the American session, where the U.S will release the existing home sales data at 15:00 GMT and FOMC Meeting Minutes at 19:00 GMT. Data may show sales of existing homes in the U.S. increased to an annual rate of 4.51 million in July from 4.37 million in June, according to a Bloomberg survey of economists. Orders for durable goods accelerated last month, a separate Bloomberg survey forecast before the data on Aug. 24. These reports may help reduce the likelihood that Chairman Ben S. Bernanke and the Federal Reserve will start a third round of debt purchases under quantitative easing. Latest developments and headlines on the meeting of the Eurozone leaders will continue to affect market sentiments. Investors should be very prudent. The resistance level is at 1.25264 and the support level is at 1.24084.
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AUD/USD: The AUD/USD was trading lower at 1.04462 at the time of writing before reports that may show global manufacturing is struggling to recover. Moreover, the Federal Reserve will release minutes of its latest policy meeting later today. Event likely to affect the trend of the pair is the U.S existing home sales data at 15:00 GMT. According to a Bloomberg survey of economists, existing home sales increased to an annual rate of 4.51 million in July from 4.37 million in June. Positive data from U.S may reduce hopes that Chairman Ben S. Bernanke and the Federal Reserve will use quantitative easing measures to boost the U.S economy, which will be bullish for the USD. Investors will closely monitor the outcomes of the European leaders meetings this week to better assess the movements of the AUD/USD. The resistance level is at 1.04893 and the support level is at 1.04082.
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Oil (WTI): Oil was trading slightly lower at 96.700 at the time of writing on market corrections and profit taking, ahead of existing home sales data, Crude Oil Inventories, Gasoline Inventories and FOMC Meeting Minutes in the U.S. Market sentiments on oil remains supported after a senior lawmaker with Merkel’s government, said yesterday that concessions are possible for Greece if it shows a willingness to meet the main targets in its bailout. In addition, a report from the Department of Energy today may show supplies slid by 250,000 barrels, according to a Bloomberg News survey. Ongoing tensions in the Middle East supported prices also, as a standoff between the Israel and its western allies and Iran have stoked fears that conflict could erupt and disrupt supply. Tropical Storm Isaac, the ninth named storm of the Atlantic hurricane season, was forecast to strengthen into a hurricane tomorrow as it headed toward the Leeward Islands in the Caribbean Sea, according to the U.S. National Hurricane Center. All these news are confirmed the price of oil might increase to hover around the $100 a barrel. The resistance level is at 97.907 and the support level is at 95.260.