Full volume will return to the Forex and Commodity markets today. Trading was thin on Monday because of the Independence Day holiday in the States. Ranges were limited for most of the day and as of this morning the USD is showing some gains against the EUR and GBP based on early Asian trading. Economic data was light yesterday, but the U.K. did release Construction PMI which met its estimate of 53.6 head on. Today will be relatively light with statistics also, the U.K. does publish its Services PMI report and the U.S. will bring forth Factory Orders. The Factory Orders numbers may prove of interest with its forecasted gain of 1.1% because last month’s outcome produced a minus -1.2% result.
However the gist of today’s trading will focus on the political fallout within Europe regarding the Greek debt situation. National governments such as Germany are seeing challenges about participating in the bailout package created for Greece. Also, rating agencies have warned that if Greece does try to ‘rollover’ some of its debt that it will likely face the prospect of having ‘selectively defaulted’.
Also it is no small sequence of events scheduled for Thursday and Friday. The ECB will hold their monetary policy meeting and are likely to raise their interest rate a quarter of a point as they have warned previously. This will be followed on Friday by the Non Farm Employment Change numbers from the States, which is slowly and surely beginning to enter a new round of national elections that will include the economy as a major factor for voters.
Wall Street begins trading today after a long weekend in which investors had enough time to contemplate their positions and think about their risk appetite. The major indexes in the States provided their first winning week in nearly two months and it will be of keen interest to see if investors are in the mood to sustain this positive momentum.
The EUR/USD pair will remain a crucial point of interest. The pair has seen volatility the past few weeks although its overall value taken with a long term perspective actually has remained stable. The questions surrounding the debt crisis in Europe and the manner in which the U.S. Federal Reserve is championing its monetary policy remain important pieces of the puzzle for investors.
Commodity markets including Gold and Crude Oil are under the microscope also. Gold did manage some gains on Monday after being taken strongly lower on Friday. However Gold does remain below 1500.00 USD an ounce. Crude Oil is clearly being monitored with longer term economic outlooks. The price of Oil is being affected by emerging cautious sentiment about the global picture, which now not only includes negative shadows for Europe and the States, but questions about China’s prospects for growth and its ability to curtail inflation too.
The AUD has been trading at the upper reaches of its value, but the fight that the commodities have suddenly been faced with should make the AUD a rather interesting candidate for volatility. Also the RBA kept its interest rate in place earlier this morning, which essentially sets the table for prevailing sentiment to be tested. The JPY did lose some ground to the USD earlier today and it will be watched by its veteran traders who are likely to test its long term range which has decidedly lingered on the stronger sides of its value.
Written by bforex.com