Economic data from the United States and the U.K. continued to mirror projections that the global economy is facing hurdles. The Core Durable Goods Orders numbers from the U.S. on Wednesday came in negative. While the GDP number from the U.K. matched expectations a result of 0.5% will not open the floodgates of optimism. Also the BBA Mortgage Approvals and the Prelim Business Investment data from the U.K. came in below the anticipated results. This being said, Wall Street was actually able to reverse and turned in a positive day. Also the EUR gained on the USD. Gold kept pace and of this morning is near 1530.00 USD. The GBP and AUD both turned in better results too. Risk taking was evident on Wednesday, but a one day turnaround does not mean that caution is off of the table.
The U.S. will release its Preliminary GDP results today and a forecasted gain of 2.2% is the call. Also weekly Unemployment Claims will be published today and the outcome is carrying a slightly better estimate than last week’s result. The question that investors will want answered today from the U.S. is whether or not the negative economic viewpoints that are starting to seep into the scope are mere worries or have an actual basis. Wall Street has turned in three weeks of bad trading and although yesterday saw gains on the major indexes it doesn’t necessarily mean that the remainder of the week will go well. Underperformers were the gainers in equities on Wednesday and there may be some attempts at bottom feeding taking place from investors. Economic data from the States has been weak the past two weeks taking into account the Manufacturing and Industrial numbers, today’s GDP results will serve as a anchor in the market and it remains to be seen where the ship will sail.
The EUR did manage to pick itself off of the ground on Wednesday. The question however is what will happen these next two trading days. There is no major economic data planned from the European Union today. Of interest for investors will be the continuing saga from Greece which includes debt, austerity, and political wrangling. Europe has many problems it must solve including the task of putting someone in charge of the IMF who takes a strong and helpful stance regarding the debt woes of Greece, Portugal, and Ireland. Although the IMF is certainly not a European body, Europe sees the Managing Director’s job as their ‘birthright’. CPI data will come from Germany tomorrow, but the scope of sentiment for all investors will continue to be the Greek situation and its developments. The EUR is churning in a delicate pool consisting of a ‘confidence game’ that officials are trying to keep calm.
The GBP traded well on Wednesday gaining against the USD. GDP numbers met expectations head on, but other critical data as written before fell short. The Sterling continues to move in a curious EUR centric mode and until it breaks free from this spell it is likely to see tentative trading which test its range. The U.K. will be quiet with data today, but tomorrow the Nationwide HPI is listed as being on the schedule.
Commodity prices did gain and it wasn’t only Gold that shined. Crude Oil also managed to show an ability to drive up. However commodity prices have shown that they are beginning to feel the weight of rather nervous economic sentiment. The GDP report from the States is likely to have an effect on many of the physical commodities today.
The AUD climbed on Wednesday as commodities were lifted. The question for the AUD is where sentiment will go these last two trading days of the week. Ranges are likely to be tested today. The JPY performed no major surprises and remains firmly in a consolidated format.
Written by bforex.com