Daily Market Review — 01/10/2015
Statistics on Chinese Manufacturing Will Influence the Dynamics of the Markets
The pair has been continuing its growth for the third trading session in a row. Yesterday, the dynamics was influenced by the positive statistics on the Australian economy. According to the data, Private Sector Credit and Manufacturing Indexes exceeded the forecasts. Today the markets got another package of economic statistics in China. The Manufacturing PMI came out at 49.8 versus an average forecast at the level of 49.6. The Markit/Caixin Manufacturing PMI also pleased investors and reached in the final estimate the level of 47.2 against average forecast of 47. These figures indicate that all measures taken by the Chinese government to stabilize the national economy provided real-life results. Recall, Australia is the Chinese largest trading partner and the state of the Chinese economy directly influences the economy of Australia. That is why the AUD/USD shows strong growth. Today, the dynamics of the pair can be affected by data on the ISM Manufacturing, which will be released at 14:00 (GMT).
Resistance: 0.7094, 0.7142, 0.7203
Support: 0.6997, 0.6945, 0.6907
Yesterday the pair traded with a positive trend, supported by the recovery in global stock markets and the depreciation of the Japanese currency. Yesterday was presented data on Industrial Production in Japan that came out worse than analysts’ average forecast. The same applies to Retail Sales. Another report, on Construction Orders, showed that these orders fell by most for the past few years. Meanwhile, the ADP Employment Report showed that the number of employees in the US economy rose last month by 200K. In addition, yesterday was released the Bank of Japan’s Tankan on Manufacturing and Non-Manufacturing Indexes, which fell short of forecasts. Today, the dynamics of the pair will be affected by the publication of the report on Initial Jobless Claims in US at 12:30 (GMT). Moreover, the ISM manufacturing report will be released at 14:00 (GMT).
Resistance: 120.34, 120.64, 120.99
Support: 119.54, 119.24, 119.05
Major US stock markets yesterday switched to the positive dynamics, supported by the statistics on the ADP Employment Report. The indicator came out at 200K vs. the forecast at 197K. The Chicago Purchasing Managers’ Index showed that that business activity in the Chicago area declined slightly, although the employment rate, which is included in the index, has remained on the growth territory. This morning, China released a reported on the business activity in the manufacturing sector. Indexes came out better than expected, pointing to a recovery of the Chinese economy. This fact has added optimism to the US stock markets, which was under pressure because of problems in the Chinese economy.
Resistance: 4220.49, 4247.78, 4282.82
Support: 4183.68, 4147.69, 4121.69
At yesterday’s session quotes of the precious metal experienced severe pressure. The reason for this was positive statistics on the US economy, especially on the labor market. According to the ADP Employment Report, number of employees rose by 200K against the forecast of 197K. Such statistics may cause the FED to revise the timing of the first rate hike. Therefore investors will be focused on Friday’s NFP report. In case it outperforms forecasts, the likelihood of a rate hike at the FED meeting in October will increase. Recall that when interest rates increase, gold becomes less attractive to investors because it brings no interest income.
Resistance: 1121.08, 1127.57, 1134.50
Support: 1110.33, 1102.95, 1098.69