06.12.2013- Unemployment will be in focus today
The trading session today will pass on anticipation of the publication of data on unemployment in the United States. At 13:30 GMT, will be released the reports on the number of non-farm employment change, and unemployment rate in the U.S. This indicator will have a significant influence on the decision of the FOMC, on the future of the U.S. quantitative easing program. Yesterday, the major U.S. indexes ended the day in the red zone. GDP growth index in the 3rd quarter was published before the opening of the trading session. The result exceeded market expectations and appeared at 3.6% vs. predicted 3.0%. Such growth in the largest economy in the world was not seen since the first quarter of 2012. We should recall that in the second quarter the economy grew with the rate of 2.5%. The course of trading was also affected by data on factory orders. According to the report, the volume of new orders in October fell 0.9% after rising 1.8% in September. Economists had expected a decline of 0.7%. Volume of inventories, excluding the volatile transportation category has not changed. The European markets yesterday also showed a decrease of the major indexes. The reason for the continuation of the longest in 5 months string of declines was the statement of the ECB President Mario Draghi. According to Draghi, situation on financial markets and weak domestic demand can harm the economy in the euro area. If the situation will develop worse than expected, the bank is ready to provide support to the economy in a larger size. One option to support the economy could be a negative deposit rate. Another option is the purchase of assets and long-term loans to activate lending to companies and households. The ECB also revised the inflation forecast from 1.5% to 1.4% this year and 1.3% to 1.1% in 2014. GDP growth forecast for 2014 was raised from 1.0% to 1.1%. After the speech, of Mr. Draghi, pair EUR/USD strengthened significantly. Now the price is consolidating at the 1.3660 mark. Further progress will depend on the data on the U.S. labor market. Trade balance in France may also affect the course of trading today. The next targets in case of growth would be at 1.3730 and 1.3820. Correction is possible inside the rising channel to the levels of 1.36 and 1.3565. The price movement of the British pound yesterday was influenced by the statement of the Bank of England according to which the interest rate remained at the level 0.5%, and the size of bond-buying program is also unchanged at 375 billion British pounds (614 billion U.S. dollars). The Bank's policy has not changed in order to support the country's economic growth. After that, the pound fell and now is consolidating near 1.6320. Decline is possible to 1.6270. Growth is limited by the resistance at 1.6440. Analysts of JPMorgan announced their forecast for the Australian dollar in 2014. According to their estimates the dollar in mid-2014 will be 0.92 and 0.90 at the end of the year. Exchange rates next year will depend from the soft monetary policy of the Reserve Bank of Australia, commodity prices and GDP growth and consumption in China. Now the price is consolidating above the psychological level of 0.90. In case of further decline, the goal will be the level of 0.89. In case of correction the price can increase to 0.9160. Price of USD/JPY came out from the rising channel and continues to move within the local correction channel. In case of further decrease the price may reach 101.20. Growth is limited by the resistance at 102.60. Concerns on reduction of quantitative easing in the U.S. and the fact that Iraq, Libya and Iran announced that they plan to increase oil exports in the next few months, continues to put pressure on oil quotations in the world. The rise in prices is supported by bad weather conditions in the North Sea, which could lead to disruptions in oil supplies. Price of Light sweet crude oil, is consolidating above $ 97 per barrel. Growth is limited by the level of 98.70. Support is at 95.20. Gold reserves in the SPDR Gold Trust have fallen by 2.70 tons - to 838.71 thousand tons. This is the lowest level since early 2009. In addition the improvement on the labor market and growth of the U.S. economy, increases the possibility of a reduction of injecting money into the markets. Further movement of the price will be determined after the meeting of the FOMC on December 17-18. The closest targets are the levels of 1200 and 1180. Growth is possible up to 1250.