Toot toot! The gravy train is departing the platform again. Fantastic economic figures from the UK and US as well as no change in rates here at home. The only blight to the future prosperity is Syria. Even that though couldn’t stop the bounce in the market as copper jumped 2.5%, gold 1.1% and oil 1% too. The stock market was up but by minor numbers. Soft commodities took a minor hit and currencies were a mixed bag.
Syria may cause a stir in the oil price which could cause inconvenience to growth but the figures from the US last night were really good. Up till now the US growth has been in housing and associated industries, but last night saw their manufacturing sector surprise to the upside. This is a good thing for global growth as the US broadens their economy can only benefit a broader market and range of people.
Even the Pom’s got involved and despite having crushingly expensive housing, their construction figures produced fabulous growth.
So, all aboard the train as it will accelerate now, stock markets will rebound from the August pullback and US dollar will be tough to handle but expect it to grow strongly with money pouring into the US and Ben stopping the spending on bonds combined will force the greenback higher.
DATA HIGHLIGHTS TODAY – AUS GDP. UK Services PMI. US Trade Balance. CAD Trade Balance. CAD – BOC Rate statement.
AUDUSD – The little battler is running back up as expected and will test 92¢ this week. 93 and 94 may get a touch with a change of government. If, for some unforgivable reason, the Aussie voters keep Crudd in government then we will struggle to get through 92 and could even fall back to 89.
EURUSD – The sellers are still dominating the Euro and I suspect this is more about dollar strength or the perceived risk of Merkel losing power in Germany. Fundamentally the Euro should be performing better, however in the next few months Greece, Italy, Spain and Portugal debt issues will rise again and maybe the market is positioning itself for that. The trend is your friend and the trend says for the moment, sell.
GBPUSD – Great construction data saw the cable spike up before settling down as a doji bar. Still, a HH/HL saw me into the market and I will be watching how it goes with the resistance at 1.5755.
NZDUSD – Yaaaaaawwwwwwwwwwwnnn mmmm hello Kiwi’s!? You awake? Your currency is not.
USDCAD – The Loonie too is boring to watch right now with no clear trend and this tells me the battle between the Loonie and Greenback as oil price fluctuates around Syrian news.
USDJPY – Ran up to test the resistance of 100 and didn’t have the legs to break through. A cycle back to the 50ema is likely as this pair is range bound and not really going anywhere yet.
GOLD – Nice jump of 30 bucks making a swing low with low test in the middle. Making this attractive for buying, but the resistance at 1425 is a concern.
David Long/ Proprietary Trading Manager