Markets were exceptionally choppy in the NY session as approaching quarter-end continues to make for overall thin conditions. US equities could not hold on to modest gains and closed down about -0.3% on the day. It was surprising that they did not fall further following an extremely downbeat US consumer confidence report. The headline index fell to a much lower than expected 53.1 in September after a 54.5 read the prior month. Consensus was for an increase to 57.0 so the surprise was palpable.
The guts of the report suggest the employment picture continues to look ugly. The labor differential (which measures jobs plentiful minus jobs scarce) plunged to -43.6 from -40.0 and is now a mere point above the cycle low. This throws some cold water on the employment recovery idea and points to a below consensus NFP loss this Friday. We are currently penciling in a -205K forecast â€ market looking for -180K at the moment.
The US dollar traded mostly sideways and managed to eke out a negligible increase. Major daily trendline by 77.30 was tested today but the index failed to close above there. We will keep a close eye on this metric as a major break above could revive the US dollar bulls near-term. The 50- and 100-day smas lurk above at 77.94 and 79.11, respectively.
The range-bound nature of the buck was very evident in EUR/USD as well. The pair traded to either side of the 1.4527/1.4584 session range before closing out near the top of that span. Important support lurks at 1.4511 now. This is where the Kijun line sits and a daily close below there would be technically bearish for the pair. The top of the Ichimoku cloud then rests all the way down at the 1.4219 mark.
Gold managed to rally despite the overall sideways nature of other asset classes. The precious metal looked vulnerable early on after plunging to a 985 session low. There was talk of demand from the Middle East community into the lows and this looks to have helped prop the precious metal back up. Short-term we would expect XAU/USD to see decent offers ahead of the 1000 area.
Upcoming Economic Data Releases (Asia Session) prior expected
9/29/2009 2300 GMT US Fed's Plosser to Speak at Lafayette College Economic Summit
9/29/2009 2301 GMT UK GfK Consumer Confidence Survey SEP -25 -24
9/29/2009 2315 GMT JN Nomura/JMMA Manufacturing PMI SEP 53.6 - -
9/29/2009 2350 GMT JN Industrial Production (MoM) AUG P 2.10% 1.80%
9/30/2009 000 GMT AU Conference Board Leading Index JUL 0.90% - -
9/30/2009 130 GMT AU Retail Sales s.a. (MoM) AUG -1.00% 0.50%
9/30/2009 130 GMT AU Private Sector Credit MoM% AUG 0.20% 0.20%
9/30/2009 130 GMT AU Building Approvals (MoM) AUG 7.70% 2.50%
9/30/2009 130 GMT JN Labor Cash Earnings YoY AUG -4.80% -4.00%
9/30/2009 200 GMT NZ NBNZ Business Confidence SEP 34.2 - -
9/30/2009 400 GMT JN Vehicle Production (YoY) AUG -31.90% - -
9/30/2009 500 GMT JN Housing Starts (YoY) AUG -32.10% -31.70%
9/30/2009 500 GMT JN Construction Orders (YoY) AUG -42.80% - -