Risk aversion remains in play!
- The Dollar had a good day striving in the risk off environment. USD/JPY short covering and more Euro zone concerns helped push the Dollar to day highs. July Retail Sales was slightly weaker at 0.4% vs. 0.5% forecast and US CPI increased 0.3% which removed fear of deflationary pressures and further QE by the Fed. We also had Michigan Consumer Sentiment which beat expectations and came in at 69.6. The DJIA was down -16 points closing at 10317 and the S&P down -4 points closing at 1079. Looking ahead, NY FED Manufacturing is forecast at 8 vs. 5 previously. USDJPY price action on the day was between 85.56 - 86.36.
The Euro was unable to sustain gains after some surprisingly strong German Q2 GDP at 2.2% vs. 1.3% forecast. The market then eased as US stocks came under pressure and Q2 EU GDP showed the rest of the union doing worse than Germany. EUR/USD traded with a low of 1.2753 and a high of 1.2906 before closing at 1.2755. Looking ahead, July Inflation is forecast at -0.4% vs. 0.0%. EURUSD price action on the day was between 1.2731 - 1.2797
Currency to watch out for: EURUSD & USDJPY
- § The EURUSD pivot point is at 1.2830 with a preference to enter into Short positions at 1.2820
- § The USDJPY pivot point is at 86.20 with a preference to enter Long positions at 86.15
Today's calendar and market movers:
- § Euro Zone Inflation for the month of July expected at -0.4%
- § United States NY Fed Manufacturing for August expected at 8
- § Australia RBA minutes will be released
- US equities closed negative yesterday with the S&P500 at -0.4% and the DJIA at -0.16%. The European bourses were mixed with the FTSE up 0.18% the DAX and the CAC closing at -0.4% and -0.28% respectively. The NIKKEI and the HSI at the time of writing is -0.60% and 0.22% respectively.