Wall Street ended a great month on a soft note, as exchanges had edged lower yesterday
Today’s Reports and Announcements of Significance to the Market
Today’s Major Economic Events:Below you will find the top tier economic events for today. These events have the ability to move the markets. If you want to learn more about understanding these reports and the economics calendar, contact iOption live chat and asked to be enrolled for our webinar about trading the economics calendar.
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Date |
Time |
Currency |
Event |
|
Feb. 01 |
00:30 |
AUD |
PPI (QoQ) |
|
|
01:00 |
CNY |
Chinese Manufacturing PMI |
|
|
01:45 |
CNY |
Chinese HSBC Manufacturing PMI |
|
|
08:30 |
CHF |
SVME PMI |
|
|
08:45 |
EUR |
Italian Manufacturing PMI |
|
|
08:50 |
EUR |
French Manufacturing PMI |
|
|
08:55 |
EUR |
German Manufacturing PMI |
|
|
09:00 |
EUR |
Manufacturing PMI |
|
|
09:30 |
GBP |
Manufacturing PMI |
|
|
10:00 |
EUR |
CPI (YoY) |
|
|
13:30 |
USD |
Average Hourly Earnings (MoM) |
|
|
13:30 |
USD |
Nonfarm Payrolls |
|
|
13:30 |
USD |
Average Weekly Hours |
|
|
13:30 |
USD |
Private Nonfarm Payrolls |
|
|
14:55 |
USD |
Michigan Consumer Sentiment |
|
|
15:00 |
USD |
ISM Manufacturing Index |
Global Markets
US MARKETS
Wall Street ended a great month on a soft note, as exchanges had edged lower yesterday as job market reports added to the concerns about the U.S. economy. The Dow fell 0.3% while the S&P dropped 0.2%. The NASDAQ closed with little changes. In January the Dow Jones had gained 5.9%, which is being recorded as the best performance for that month dating back to 1994, when blue chips rose 6%. In January the S&P 500 also saw gains of 5% for the month as the NASDAQ added 4%.
Amongst all of the economic data, the government is reporting a leap in initial jobless claims coming after two weeks of declines. On another note, outplacement firm Challenger said the number of planned job cuts surged 24% to 40,430 in January. For December personal income rose 2.6%, while spending had slip forward 0.2%, according to reports from the Commerce Department; but the increase in income was pushed mainly by those Americans who were trying to avoid having to pay higher taxes for the new year and it’s not expected that the rate will continue.
EUROPEAN MARKETS
As corporate earnings weighed in on sentiment, European markets ended the day lower. Results from Diageo, the drinks group, and Shell, a major oil company, both missed hitting expectations, while Deutsche Bank posted a $3.5 bn quarterly loss on llegal and restructuring charges. Telecoms equipment maker Ericson had bucked the trend, by posting strong gains while exceeding expectations. The German benchmark index the DAX dropped by 0.5%, and CAC 40 of France decreased by 0.9%. In the U.K. the FTSE 100 fell by 0.7%
ASIAN MARKETS
The exchanges in Asia had started the day higher, after there were two different data releases that each showed mixed readings on the performance of the manufacturing sector in China for January. The investment bank HSBC said that the pace of activity for that industry has rose more than expected in that month, but on the other hand official data shows the momentum in that sector has slowed down, and despite recording an expansion for four straight months. HSBC (PMI – purchasing manager’s index) survey has reached a two-year high as of 52.3 in January. The outcome is a huge increase on December’s numbers that read 51.5 and slightly above what analysts had expected at 52.1. The Nikkei 225 index at the Tokyo Stock Exchange added 53.92 points to 11,192.58, quickly after the opening bell rang. The Hong Kong benchmark Hang Seng Index, added 33.81 points to 23,763.34 in Friday’s trading.
Global Currency
EURO DOLLAR
The euro is still holding on a high of nearly 14-months compared to the dollar on the basis from reports that more Americans are filing for unemployment benefits last week than expected. In wake of the Fed’s announcement that it will be making no changes to its already loose monetary policy, the greenback has continued to fall lower versus the euro.
The dollar’s loss was further intensified when the U.S. Commerce Department had reported that the GDP had contracted by 0.1% for the final quarter of the 2012 year, which was a worse result than anticipated, due to sharp spending cuts made by the U.S. government. Following the Fed’s policy meeting, which will keep easing measures in the same place, the central bank brushed off the reports, stating that it represented “a transitory” phenomena similar to adverse weather.
THE STERLING
After seeing two days of gains, the sterling was weakened and is off by 0.1%. The flow of news has been quite limited with most of the focus being on government defense spending plans which have been offset by an improvement in price of houses. The possibility of additional stimulus continues to weight on the values of the currency.
ASIAN CURRENCIES
The yen is flat compared to yesterday’s close but has outperformed on the crosses. However, the progressive trend in the USD/JPY remains intact, as yesterday’s trading reached a new multi-year high. Technicals are warning of a temporary top, as the MACD generates a sell signal and have failed to reach a new high in tandem with spot. Housing starts were weaker than anticipated at (880M), while BoJ deputy governor Yamaguchi gave some dovish comments, neither of which seemed to have impact on the markets. The greatest risk ahead for the USD/JPY will likely come from the G20 meeting which is being held on Feb. 14-15, where there could be a global voice against the rising pace of the USD/JPY.
Metals and Energy
GOLD
Gold closed the session sharply lower, giving back all of the gains that it earned on Thursday. There isn’t any major, single fundamental factor that could lead to the selling pressure. It is however likely that some end-of-the-month position squaring, profit taking from short-term traders, and pre-jobs-reports positioning can be held responsible for the losses that gold and silver had on Thursday. Gold was last seen trading down $17.80 at $1,663.90 per ounce. Gold and silver markets both have extended their early losses to trade much lower in late-morning dealings on Thursday, coming after the immediate aftermath of a report from the Chicago Purchasing Managers Index in January which showed much stronger-than-expected readings (55.6 versus 50.0 in December).
CRUDE OIL
During the Asian session crude oil gained, buoyed by the optimism about the European and US economies and the data that showed China’s manufacturing activity has continued to grow for January, said economists. The main contract in New York, light sweet crude for delivery in the month of March has increased by two cents to $97.51 per barrel and Brent North Sea crude for March’s delivery has increase 31 cents to $115.86.
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