Strong Industrial production boosts dollar, stocks gain!

  •  The Dollar was choppy and range bound all day yesterday, initially easing throughout the day as market fear subsided and stocks rallied in Europe and the US. Later on in the day however we had some upbeat economic data with July Industrial Production +1.0% vs. +0.5% forecast m/m and  July Housing Starts was also released with a +1.7% gain. This caused relative USD strength as yields gained and QE2 speculation subsided. The DJIA gained on the day +103 points closing at 10405 and the S&P +13 points closing at 1092 also as M&A talk within the agricultural sector boosted risk sentiment. Looking ahead today we have weekly Crude Oil Inventories with a forecast of -1.1mln vs. -3mln previously. USDJPY price action yesterday was between 1.2915 - 1.2803.

    The Euro yesterday was able to rally on a combination of positive risk sentiment and strong bond auctions from Spain and Ireland to test resistance above 1.2900. August German ZEW Economic Sentiment Survey slipped to 14 vs. 21.1 previously. EUR/JPY hit month lows in Asia but was able to rally throughout the day to end above Y110. EUR/USD traded with a low of 1.2803 and a high of 1.2917 before closing at 1.2870.

 Currency to watch out for: EURUSD & USDJPY

  • § The EURUSD pivot point is at 1.2820 with a preference to enter into Long positions at 1.2830
  • § The USDJPY pivot point is at 85.30 with a preference to enter Long positions at 85.35


Today's calendar and market movers:

  • § United Kingdom MPC Minutes released
  • § United States Crude Oil Inventories for the week is forecasted at -1.1
  • § New Zealand Producer Price Index for Q2 expected at 0.7%

 Equity Markets:

  •  US equities closed positive yesterday with the S&P500 at 1.22% and the DJIA at 1.01%. The European bourses were positive with the FTSE up 1.41% the DAX and the CAC closing at 1.57% and 1.82% respectively. The NIKKEI and the HSI at the time of writing is 0.84% and -0.19% respectively.