Daily Market Review - 27th March 2013
YouTradeFX | Mar 27, 2013 06:04AM ET
- GfK German Consumer Climate (Ger, 08:00 GMT)
- French GDP (QoQ) (Fra, 08:45 GMT)
- KOF Leading Indicators (CH, 09:00 GMT)
- GDP (QoQ) + Business Investment (QoQ) + Current Account (GB, 10:30 GMT)
- Italian 10-Year BTP Auction (Ita, 11:10 GMT)
- Core CPI (MoM) (Can, 13:30 GMT)
- Pending Home Sales (MoM) (U.S, 15:00 GMT)
Orders for U.S. durable goods climbed more than forecast in February the Commerce Department said yesterday in Washington as companies looked past budget squabbles and focused on expanding capacity to meet growing demand. Other reports showed sales of new homes in February capped the best two months since 2008 and residential real- estate prices rose in January by the most since June 2006. While, confidence among U.S. consumers fell more than forecast in March as Washington’s budget battle soured Americans’ views of the economic outlook.
Cyprus is on the verge of an unprecedented financial experiment: imposing controls on money transfers in an economy that doesn’t have its own currency. Countries from Argentina to Iceland have used similar measures in the past to defend against devaluation. Being part of the euro zone may make it harder for the Mediterranean island to enforce restrictions, as any money that leaves the banking system can be taken out of Cyprus without losing value.
EUR/USD: The EUR/USD was trading slightly lower at 1.28497 at the time of writing as concerns that debt- crisis contagion will spread threatened to sap confidence in the 17-nation currency bloc. Market sentiments remain fragile ahead of data forecast to show continued weakness in euro-area consumer sentiment. Events likely to affect the market are the GfK German Consumer Climate (Forecast: unchanged at 5.9), the French GDP (QoQ) (Forecast: unchanged at -0.3%) and Italian 10-Year BTP Auction. Later in the day, the U.S will release its MBA Mortgage Applications (WoW) and Pending Home Sales (MoM) (Forecast: -0.2% - Previous: 4.5%). Headlines and the latest developments in Cyprus will continue to affect sentiments and the markets. Investors should remain very cautious. The resistance level is at 1.28932 and the support level is at 1.28028.
USD/CAD: The Canadian dollar rose for a fifth day against its U.S. counterpart as oil, the country’s largest export, touched its highest point in a month, prompting investors to reverse near-record bets the currency will fall. According to an article published by Bloomberg News, Canada’s dollar rose as the discount Canadian oil producers face to the U.S. benchmark narrowed to the least in almost five months. The currency has gained since a report showed last week that bets by futures traders that the Canadian currency would fall versus the U.S. dollar outnumbered bets it would rise by the most in seven years. The pair was trading slightly up at 1.01667 at the time of writing ahead of the Core CPI (MoM) data in Canada, which is expected to improve to 0.3% compare to 0.1% registered last month. Other events likely to affect the pair are the MBA Mortgage Applications (WoW) and Pending Home Sales (MoM) (Forecast: -0.2% - Previous: 4.5%) in the U.S. Headlines and the latest developments in Cyprus will continue to affect sentiments for risky assets. Investors should stay cautious and adopt a wait and see strategy on the pair. The resistance level is at 1.01825 and the support level is at 1.01271.
Gold: Gold was trading lower at 1595.555 at the time of writing as signs that the U.S. economy is recovering, reduced demand for the metal as a store of wealth. Orders for U.S. durable goods climbed more than forecast in February and home prices increased the most since June 2006, reports showed yesterday, signaling that the recovery in the world’s biggest economy is gaining traction. Other news is that the Dallas Fed President Richard Fisher said yesterday that he’d like the U.S. to reduce its mortgage-backed security purchases program amid signs that the economy will probably grow at about 3 percent by the end of the year. At present, the Fed buys $85 billion of securities a month to spur the recovery. Events likely affect the trend of the commodity are the GfK German Consumer Climate (Forecast: unchanged at 5.9), the French GDP (QoQ) (Forecast: unchanged at -0.3%) and Italian 10-Year BTP Auction. Later in the day, the U.S will release its MBA Mortgage Applications (WoW) and Pending Home Sales (MoM) (Forecast: -0.2% - Previous: 4.5%). Investors should closely watch all the data and the latest development in Cyprus for visibility. Market participants should also watch the trend of the USD for some visibility as the USD and gold often trade inversely to one another. The resistance level is at 1606.447 and the support level is at 1589.251.
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