Durable goods disappoint, QE2 on the way? 

  • The U.S. Dollar traded weaker yesterday as US data missed expectations once again. Stock markets fell but support was found and a sharp rally was seen in the US close. July New Home Sales dropped -12.4% to 0.276m vs. 0.33m forecast and durable goods orders disappointed again with a much lower than expected print. Investors are now expecting QE2 from the Fed given the series of unfortunate events. Bernanke will be on the spotlight on Friday in his upcoming speech for any clues on future policy direction. The DJIA closed+19 points at 10060 and the S&P closed +3 points higher at 1054. Looking ahead, Weekly Jobless Claims are forecast at 490k vs. 500k previously.

    The Euro was supported via solid German IFO Business climate at 106.7 vs. 106.2 previously and dips were bought to keep EUR/USD supported on the day. The Euro was jittery yesterday before and during a Portuguese bond auction as the sentiment was for a bad auction, however the sale went without incident and the Euro gathered its strength and traded to 1.2728 from 1.2607 lows. Looking ahead, September Consumer Confidence is forecast at 4 vs. 3.9 previously.                                                        

Currency to watch out for: EURUSD & USDJPY

  • § The EURUSD pivot point is at 1.2775 with a preference to enter into Short positions at 1.2765
  • § The USDJPY pivot point is at 85.10 with a preference to enter Short positions at 85.05               

Today's calendar and market movers:

  • § Germany Consumer Confidence for September expected at 4
  • § Switzerland Non Farm Payrolls Q2, previous reading was 3.96 mio
  • § United Kingdom CBI distributive trades for August is forecasted at 20
  • § United States initial Jobless claims for the week expected at 490K

 Equity Markets: 

  • US equities closed positive yesterday with the S&P500 at 0.33% and the DJIA at 0.2%. The European bourses were negative with the FTSE down -0.90% the DAX and the CAC closing at -0.61% and -1.17% respectively. The NIKKEI and the HSI at the time of writing is 0.69% and 0.07% respectively.