Asia – Pacific
Japan’s Monetary Base came out lower than its last result at 4.5%
Europe
England’s Construction PMI was Weaker than expected at 46.2%
England’s Nationwide Consumer Confidence hit expectations at 72.00
Americas
America’s Total Vehicles Sales increased by 10.5M
The Overall Sentiment
Equities
After dropping at the start of the session, the major U.S stock indices managed to find support and climb back into positive territory. Investors experienced a volatile session yesterday as sentiment quickly flip-sided due to Buffets new transportation deal and upbeat results from Ford and GM. The major indices closed the session with an average gain of 0.3%
In one of his largest acquisitions ever, the market guru, Warren Buffet purchased the railway company Burlington Northern Santa Fe for $100 per share. Even though Buffet already had 22.6% of the company’s shares, he decided to go forward and purchase the remaining 77.4% for a whopping $44 billion.
The auto industry also showed positive signs yesterday as Ford sales increased by 2.6% thanks to its new fuel efficient cars. General Motors sales increased by 4.7%. Even though the auto industry helped to boost yesterday’s session, one must note that the recent figures were influenced by the cash for clunkers program.
From a technical point of view, the transportation index, known as a market leader, showed an enormous turnaround and climbed higher throughout the session. When taking a glance at the chart below one can see the enormous bullish candle accompanied by high volume. Even though yesterday’s session is classed as a positive sign for a broader market continuation, resistance lies at key levels, which could prevent the market from immediately climbing higher.
Forex
On the Forex market, Dollar bulls encountered a volatile session as the Dollar Index retraced all of its early morning gains. Even though most of the individual pairs traded around recent levels, the Dollar experienced selling pressure, due to a spike in Gold.
This inflation hedge commodity, increased dramatically during yesterday’s session as the Reserve Bank of India purchased over 200 tons of Gold. According to Bloomberg news this was one of the largest purchases in over 30 years. Even though India is known to be a large purchaser of Gold, primarily in the form of Jewelry, this time round analysts are speculating that the buying was due to investment diversification.
Gold soared higher yesterday to close the session just off the 1085 mark.
The Day Ahead
The heat should rise over the next couple of trading days as the Federal Reserve’s policy statement will be released today, followed by the governments ADP report. Furthermore New-Zealand will release its unemployment result, one that is expected to show an increase of job losses to 6.4%. Apart from today’s expected volatile session one should take into consideration tomorrow’s interest rate decisions and Friday’s NFP result, all expected to have an impact on the markets.
Market Analysis provided by eToro
Disclaimer: Trading in the Foreign Exchange market might carry potential rewards, but also potential risks. You must be aware of the risks and are willing to accept them in order to trade in the foreign exchange market. Don’t trade with money you can’t afford to lose.
