Consolidated trading was the general rule of thumb on Tuesday. The USD did lose some ground to the EUR and GBP, therefore finishing the day essentially where it started off this week’s trading. The equity markets globally turned in another tentative performance and the commodities markets all traded in mixed ranges. Gold as of this morning’s writing is around 1541.00 USD and Crude Oil futures continue to remain under 100.00 USD for West Texas Intermediate. The JPY finds itself bouncing along the strongest parts of its range versus the Greenback. The AUD turned in what may have been the most interesting day as it lost some ground to the USD after the RBA kept its current monetary policy in place.
There was no major data from the U.S. yesterday, but Ben Bernanke did appear at the International Monetary conference in Atlanta and admitted that the U.S. economy has hit another soft patch. He did keep a confident tone and say that the U.S. would not need further stimulus, but his comments were not exactly flowing with a bright outlook for economic prospects. The States will release the Fed’s Beige Book report today, but this is not going to have a huge affect on broad market sentiment. President Obama held a joint conference with German Chancellor Merkel yesterday and he gave his verbal backing to Greece. What that means in real terms is unknown however. The U.S. has its own debt crisis via its Federal Budget and also has storm clouds brewing with obligations owed by the likes of California, New York, and Illinois.
The EUR has continued to keep up its momentum based on the confidence game that European officials have been able to successfully play the past week in the face of the continuing Greek debt concerns. Portugal, Spain, and Italy have all been in the news with their own obligatory problems, but investors somehow have managed to sweep uneasy sentiment under the rug and have continued to back the Single Currency. Germany did turn in better Factory Orders results on Tuesday. Today Trade Balance numbers will come from France and Germany. Also the broad overall GDP figures will be delivered for Europe and the Revised number is anticipated to show a gain of 0.8%. Tomorrow the ECB will get into the act as they hold their monetary policy meeting and press conference which will be led by President Trichet. The U.K. will also hold their BoE policy meeting tomorrow and make their pronouncement known. Neither the ECB or BoE are expecting to make earth shattering news tomorrow. Trichet’s press conference is certain to garner the limelight and be the focus for investors. But Trichet is a tested and true economic actor and his script is certain to remain linked to his past – meaning he will speak about inflation concerns, the importance of strong fiscal policy, and the need to keep the EUR stable, and last but not least his belief that at the end of the day all will be fine.
Commodity prices continue to signal that investors including speculators are still practicing caution. The prospects for the global economy are not exactly stellar at this duration, and therefore real questions about demand may be entering the equation and be putting some pressure on physical resources. Grains continue to turn in mixed results. OPEC is holding a meeting today and will be discussing supply and production numbers for Crude Oil.
The broad markets have seen plenty of tentative trading this week and ranges have largely been predominant. Traders should monitor equities, particularly results from Wall Street to gauge sentiment. Stocks have had a disappointing run the past month and a half and worries about economic outlooks are not helping. The Forex markets remain cautious as well and the questions surrounding the U.S. and Europe have certainly caused many participants to sit on the fence. Trading opportunities for the short term are likely to come from a test of the prevailing ranges.
Written by bforex.com
