Daily Market Review - 24th August 2012

Today’s highlights;

Business Investment (QoQ) + GDP (QoQ) (GB, 09:30 GMT)

Core Durable Goods Orders (MoM) (U.S, 13:30 GMT)

Consumer confidence in the U.S. fell last week to the lowest level since January as Americans’ held more pessimistic views on their finances. The Bloomberg Consumer Comfort Index decreased to minus 47.4 in the period ended Aug. 19, the sixth consecutive drop, from a minus 44.4 the prior period. The series of declines is the longest since 2008, when the U.S. was in recession. On the other hand, Applications for U.S. unemployment benefits climbed last week to a one-month high, showing scant progress in the labor market that’s left Americans more pessimistic about the economy. Jobless claims rose by 4,000 for a second week to reach 372,000 in the period ended Aug. 18, Labor Department figures showed yesterday in Washington.

German Chancellor Angela Merkel said she and French President Francois Hollande will coordinate on their approach to Greece to keep pressure on the country at the heart of Europe’s debt crisis to overhaul its economy. Merkel said in a prepared statement late yesterday, that it’s important to her that we all stand by our obligations and wait for the troika report and see what the result is, referring to a report due next month on Greece’s progress in meeting its bailout terms

EUR/USD: The EUR/USD was trading slightly lower at 1.25546 at the time of writing on profit taking and market corrections. The pair soared to a peak of 1.25917 yesterday, after U.S released mixed economic data, increasing speculations that Federal Reserve is moving closer to implementing more economic stimulus measures. In the European session ahead, there are no EUR related data on the agenda. Investors will focus on Greek-EZ leaders meetings going on with Greek PM Samaras visiting German PM Merkel. While in the American session, the U.S will release Core Durable Goods Orders (MoM) at 13:30 GMT. The U.S. durable goods probably rose in July by the most this year, reflecting a jump in aircraft demand that overshadowed slowdowns among other manufacturers, economists said before a report today. The projected 2.5 percent increase in bookings for goods meant to last at least three years would be the biggest since December and follows a 1.3 percent June increase, according to the median forecast of 75 economists surveyed by Bloomberg. Sentiments and speculations will continue to drive the market. The resistance level is at 1.26000 and the support level is at 1.25151.

GBP/USD: The GBP/USD was trading lower at 1.58579 at the time of writing on market corrections and profit taking ahead of key risk events for the GBP, the Business Investment (QoQ) and GDP (QoQ) at 09:30 GMT in U.K. The Business Investment (QoQ) data is expected to come at 2.8% compare to 1.9% registered previously and the GDP (QoQ) data is expected to come at -0.5% compare to -0.7% recorded last quarter. A higher than expected reading should be taken as bullish for the GBP, while a lower than expected reading should be taken as bearish for the GBP. Later in the day, the U.S. will release the Core Durable Goods Orders (MoM), which probably rose in July, according to economists. Besides these economic data, investors will closely monitor the headlines and the outcomes of the Greek-EZ leaders meetings. The Greek PM Samaras is visiting German PM Merkel today. Speculations that Federal Reserve will implement more stimulus measure, following mixed economic data in the U.S will continue to weigh on the pair. The resistance level is at 1.59106 and the support level is at 1.58212.

Oil (WTI): Oil was trading lower at 95.755 at the time of writing as reports signaled a weakening economy in the U.S., the world’s biggest crude user. The German Chancellor Angela Merkel said she and French President Francois Hollande will maintain the pressure on Greece to overhaul its economy at meetings with Prime Minister Antonis Samaras in Berlin today and tomorrow, fueling worries on the progress on resolving the region’s debt crisis. The tanker-tracker said yesterday in its weekly e-mailed report that the Organization of Petroleum Exporting Countries will reduce crude shipments this month, according to Oil Movements. OPEC, responsible for about 40 percent of world supplies, will export 23.9 million barrels a day in the four weeks to Sept. 8, compared with 23.94 million a month earlier. Moreover, Tropical Storm Isaac strengthened in the Caribbean Sea on a path projected to bring rain and heavy winds to the Gulf of Mexico next week and threaten energy facilities. The above news may bring some support on the market. Today, the risk event for the commodity will be the Core Durable Goods Orders (MoM), which probably rose in July, according to economists. Investors should closely monitor all news to get visibility on the commodity. The resistance level is at 97.529 and the support level is at 94.132.

Good Luck in trading…