Daily Market Review — 03/08/2015
Markets Await Releases of the Manufacturing PMI in Eurozone and the PCE price index in US
In the last session the pair showed mixed trends, which is attributed to the publication of mixed statistics for the euro area, and clearly negative US statistics. In the euro area retail sales declined in Germany last month and the consumer price index showed no change for the same period. It illustrates that the European economy has some problems. As for the US, the Employment Cost Index fell to its lowest level since 1982. Recall it is a leading indicator of growth in wages, which directly affect the inflationary pressures in the country. Today, market participants should pay attention to a number of important data from the euro zone, namely the Manufacturing PMI in France, Germany and the euro zone, which are scheduled for 07:50 (GMT), 07:55 (GMT) and 08:00 (GMT) respectively. The US stat will be released as usual at 12:30 (GMT).
Resistance: 1.0989. 1.1113, 1.1196
Support: 1.0964, 1.0922, 1.0868
Last Friday, the dynamics of the pair was affected by US statistics and the positions adjustment before the weekend. There was no economic data published in the UK on Friday. The US Employment Cost Index, published in the 12:30 (GMT), showed that it’s slowing down, which can lead to a slower growth in wages in the future. This index is closely watched by the US Federal Reserve. After the publication of the stat the dollar lost about 115 points against the British pound. Then, the pair managed to win back half of the lost positions. Today, the dynamics of the pair can affect data on Manufacturing PMI in the UK, which is scheduled for 08:30 (GMT). Also, markets expect US reports of the PCE price index and Personal Income, which will be published at 12:30 (GMT).
Resistance: 1.5636, 1.5670, 1.5772
Support: 1.5548, 1.5527, 1.5465
US stocks started trading on Friday without any clear dynamics. But they experienced high volatility in the second half of the day, which was caused by the publication of economic data from the United States. On the one hand, the Employment Cost Index fell, and on the other the Chicago Purchasing Managers’ Index turned out to be better than forecast. These data will likely to force the Fed to think over the timing of the first rate hike, which may negatively affect the stock market not only the US, but worldwide.
Resistance: 17718.90, 17833.32, 17870.23
Support: 17589.58, 17552.79, 17319.28
Light Sweet Crude Oil Futures
Oil futures were trading with a negative character on Friday. Moreover, at the opening of the new trading week today, they renewed long-term lows at $46.41 per barrel. This is caused by a large oversupply in the world oil market, as well as the publication by the oil service company Baker Hughes the data on active drilling rigs in the US. It stated that the number of rigs increased by 5 units last week. This fact made investors worry about the imbalance in the oil market.
Resistance: 48.57, 49.01, 49.61
Support: 46.41, 46.00, 45.50