Market Commentary – 28/07/09
Key Themes
The main themes deciding market direction currently are: -
Signs of stabilisation in the US housing and labour markets and positive economic reports elsewhere add to the bullish mood.
Investor confidence still improving with renewed risk appetite causing further flows out of USD.
Ongoing concerns over the UK economy and the government handling of it. This is leading to market concerns that there may be a sterling crisis ahead.
In the News
European stocks climbed to an 8 month high after company earnings continued to beat analysts estimates. Asian shares also rose, indicating further investor confidence and risk appetite.
US Treasury Secretary Timothy Geithner has pledged to rein in the US deficit amid China’s concerns about preserving the value of their $800bn of Treasury holdings. Geithner has promised a “sustainable” deficit by 2013.
Data released today
Tuesday 28th July
UK – 11:00 CBI Realised Sales – Exp. -12
This is a survey of around 160 retail and wholesale companies rating the current level of current sales volume, and isseen as a leading indicator of consumer spending.
US – 15:00 CB Consumer Confidence – Exp. 49.1
Financial confidence is a leading indicator of consumer spending, which in turn accounts for a majority of overall economic activity.
Market Sentiment and Consensus
EURUSD
Today – Cautious buy whilst above 1.4218 to 1.4299. 30% of breaking below 1.4338 to 1.4171 and 1.4144.
This week – expected higher as long as it doesn’t trade below 1.4056
GBPUSD
Today – Cautious buy whilst above 1.6455 to 1.65265, and above this to 1.6588.
This week – expected higher as long as it doesn’t trade below 1.6263
EURGBP
Today – Cautious buy above 0.8610 to 0.8661 and 0.8694
This week – expected higher as long as it doesn’t trade below 0.8572
