Wednesday, December 4

Asad Rizvi

Current release of US economic indicator do suggest that US economy is gradually picking up after the slowdown that was seen in recent months. Today too, there are batch of some important economic data's that are due to be released, which should tell us more about the performance of US economy. 

ADP employment change will give a sense about private sector job condition, as earlier months numbers will be revised that should not be ignored.Trade balance number should do well due to fall in oil prices. Since Non ISM that gives sense of business environment does not influence GDP and may not have major impact on economy, but result of over 50 is considered good and do watch the employment component of the data that may give a feller about Friday's Payroll. However, New Home Sales that will include two-month data because of Government Shutdown should give feeler about Housing activity, as there  is a perception that Home Sales may have fallen due to higher mortgage rates. Late release of FED Beige book will provide latest economic condition, as this this survey is collectively done by 12-Federal Reserve Districts.

Meanwhile, expected correction in Japanese Yen has occurred, as market went extremely short in JPY, it was supported by almost 2.4 pct fall in Nikkei that have been enjoying run up due to availability of ample of liquidity, which is part of monetary policy to stimulate economy. Tough I disagree that healthy stock market has anything to do with growth and economy.

While, there is lot of talk about the extraordinary performance of UK economy that has helped Pound Sterling to surge, but in my view there is no unusual growth, instead higher GBP could give dent to its exports and recent decision by BOE to halt funding to housing sector to arrest Bubble/Inflation may turn out to be bad news for the economy, as slowdown in UK housing sector could hamper growth and ultimately hit employment. Therefore, in my view, bad UK economic data will become good excuse to offload its Pound Sterling holding. But unless on the downside 1.6220-40 surrenders, GBP has the potential to test new highs that cannot be ruled out.

However, Europe will lead the release of economic data's. PMI, GDP and Retail Sales data will be released and they are all key indicators, which is expected to show improvement. Any disappointment will change market mood in expectation that ECB could turn Dovish, as it will announce monetary policy tomorrow.  

GMT 3:27 - GOLD @ $ 1222 = Gold is currently locked in $ 1210 - $ 1230 range and needs to break for either way move.Break of two levels will encourage for either test of $ 1193 or $ 1242. However, in Asia gold should remain capped around $ 1228, but may not have enough legs to clear $ 1213-15 zones.

GMT 3:36 - EURO @ 1.3590 = The key level today is 1.3560-70, which if holds could see a push towards 1.3630-40 zones or else fall could extend towards 1.3530-40.

GMT 3:42 - GBP @ 1.6391 = Cable may initially hold above 1.6360-70 levels for test of 1.6425-35. Break of 1.6480 will threaten for more gains. However, needs to fall below 1.6320-40 for more losses.

GMT 3:46 - JPY @ 102.56 = As long as 102.80-90 holds risk for test of 101.80-90 is possible. Japanese currency may find support around 102.65 levels.

GMT 3:49 - AUD @ 0.9065 = Needs to push beyond 0.9095 for 0.9115, which looks tough for now as break of 0.9035 will pave way for 0.9010.

DISCLAMER : The commentary/information presented is not intended for trading purpose. The idea is to exchange views with the members/readers. Therefore, I accept no responsibility or liability for any losses incurred due to position taking.