Daily Market Review — 03/11/2015
Announcement of the RBA Decision on the Discount Rate and Labor Market Statistics in New Zealand are the Main Events of the Day
The pair shows some steady growth since the beginning of this trading week amid expectations for the Reserve Bank of Australia’s to maintain the interest rate. In addition, yesterday’s dynamics were influenced by published data on building permits in Australia, which outperformed the analysts’ forecast. In contrast, the data on the index of business activity in the manufacturing sector in Japan fell short of the expected value. This morning the Australian central bank announced their decision on interest rates. As expected, the Australian regulator left rates unchanged at 2.0%. In an accompanying statement, the head of the bank, Glenn Stevens noted that the economy is growing at a moderate pace, and the exchange rate is affected by the fall of commodity prices, which has a stimulating effect on the economy. Most likely the pair will continue to trade today in an uptrend.
Resistance: 86.98, 87.33, 87.87
Support: 86.25, 85.97, 85.41
Yesterday’s trading day began with a downward momentum, caused by the mixed statistics on the Chinese economy, New Zealand’s largest trading partner. Some pressure also came from the index of business activity in the manufacturing sector and the ISM Manufacturing index, which turned out to be better than expected. The pair has tried to start reversing the trend this morning given that the Central Bank of Australia left rates unchanged. Since the Australian dollar, just like New Zealand’s, is a commodity influenced currency, such a reaction was predictable. Today’s dynamics of the NZD/USD will likely be influenced by data on Factory Orders in the US, scheduled for 15:00 (GMT), as well as statistics on New Zealand’s labor market at 21:45 (GMT).
Resistance: 0.6778, 0.6810, 0.6863
Support: 0.6722, 0.6697, 0.6646
US stock indexes increased significantly yesterday, showing growth by more than 1%. This was triggered by positive statistics on the US economy, as well as an over-performing health sector. According to yesterday’s statistics, the manufacturing index, both from the Institute for Supply Management, and the general one rose more than forecasted, though fell short of their previous values. This indicates a strong recovery in US production. It is worth noting that all three major stock indexes are almost at their highs, therefore there is a high chance for a correction to occur. Today’s dynamics of stock markets will likely be affected by the release of data on Factory Orders in the US, scheduled for 15:00 (GMT).
Resistance: 2099.37, 2106.78, 2117.40
Support: 2084.83, 2072.94, 2063.72
Light Sweet Crude Oil Futures
The price of “black gold” was under pressure in yesterday’s trading as a reaction to not very positive statistics coming from the Chinese economy, the world’s second largest consumer of raw materials and thus a major player on the demand side. The Russian Federation also announced that it has increased oil production in October to 10.98 million barrels per day, an additional pressure on an already oversupplied market. Meanwhile, OPEC announced a reduction of oil supply yesterday. This had less of an impact as OPEC countries regularly exceeded their own quotas this year. Across the pond, data from Baker Hughes showed that the number of active rigs in the US fell by 17 units last week, but since this capacity can be quickly brought back in case the price rises, the effect is marginal. Finally, today we’ll see data from the Crude Oil Inventories in the US from the API. Scheduled for 21:45 (GMT), this event will have a much larger impact.
Resistance: 46.70, 47.50, 48.33
Support: 45.52, 44.89, 44.17