Thursday, Feb 6

Asad Rizvi

As market awaits tomorrow's jobs data, the ADP figure hinted that private sector created fewer jobs than market expectation, but overall it was not a bad number. Later release of ISM non-manufacturing data suggesting better picture of the economy. Its is still quite a mixed bag of numbers that we are getting from USA, but it should not be matter of concern, as poor weather has distorted the recent release of economic data from USA. Today's release of US Trade Balance and Initial Jobless Claims will provide more clue.

Today's monetary policy announcement from Europe and UK is the biggest event of the day, as fear of Europe sinking into deflation is getting all the attention that threatens for more rate cut and or liquidity injection or if ECB may consider applying any other easing monetary tool. Following interest rate announcement Mario Draghi will catch attention.

BOE's decision of interest rate is another important event of the day, but nothing is expected to change. Recently we have seen sharp reduction in UK unemployment rate, which is now close to target, but BOE may not take decision in haste to jack up rates too early that may spoil economic recovery, as there are signs of UK economy getting exhausted. However, the key to first change would be withdraw of its Pound 375 billion asset purchase program. 

I think the overall focus for future guidance to all the monetary policy announcement will be towards the language. So watch out for any Central Bank's talk on forward guidance that may provide some clue about their future plans.

GMT 8:20 - GOLD @ $ 1256 = We may have seen the top of the week and now gold should hold around $ 1258-62 levels or could maximum stretch up to $ 1265, which looks tough. Break of $ 1248 will help to push gold towards $ 1242-45 zones.

GMT 3:31 - EURO @ 1.3527 = Today the challenge for Euro would be to move beyond 1.3540-50 zones for 1.3575-85, which looks tough and failure would risk for a drop. But needs to break 1.3460-70 support level for 1.3420.

GMT 3:40 - GBP @ 1.6310 = Pound still needs to move beyond 1.6340-50 zones for more gains, but suspect that it has lost its upside momentum and may re-test 1.6240-50 zones. But Pound needs to break 1.6205 for more losses. 

GMT 3:45 - JPY @ 101.54 = We could a see a move towards 101.80-90 and need to break of 102.20 or else another test of 101.10-20 zones will be seen. 

GMT 3:48 - AUD @ 0.8963 = Aussie is likely to trade in a 0.8910-0.8990 band.

           

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.