Daily Report – 02/05/2018

The Markets on hold ahead of FED rate guidance

 

Dow Jones 24072 / Dax 12746
Oil $67.34/bbl
Gold $1310/oz
UK: UK PMI Construction actual 52.5 vs. 50.5 expected.
EZ: Prelim Flash GDP actual 0.4% vs. 0.6% last quarter.
North America: ADP forecast 200k at 03:15pm.
FOMC Statement at 09:00 pm No Change expected in Interest Rate.

Growth in the Eurozone hit its slowest pace since 2016’s summer, confirming fears of a slowdown in the single currency area after a strong 2017 outcome. The economy of the single currency area grew by 0.4% in the first quarter of 2018, according to Eurostat. That was down from 0.7% for the final quarter of 2017. The Euro did not react considerably on the news as it is already exhausted after last week free fall. The Cable gained 100 pips in the wake of better than expected PMI Construction reading.

Now the market will wait the North American session for guidance as the ADP figure at 03:15 pm and the FOMC minutes at 09:00 pm will be decisive for the US Dollar direction in the coming days. If ADP rise above the 200k and the FED outlook is supporting its last meeting guidance the dollar will be supported and the USDJPY might cross above the 110.20 resistance.

On the International Radar:

  • Putin looks at fixing hurdles with west to revive Russia’s economy.
  • The EU vows not to give in to threats as Trump delays tariffs.
  • Brexit invades London’s local politics; Thursday’s council elections are being pitched to anxious Europeans as a last chance.
Today’s Snapshot
Gold Last $1310/oz.

Yesterday the Gold closed down around $12 at $1,306.10. Prices closed near the session low and at a 4 months and a half low. The gold bulls have lost their slight over the near-term technical outlook. A close below major psychological support at $1,300.00 would open the door to a larger leg down in prices in the near term. First support at $1297, second at $1284. First resistance at $1322, second at $1337.

Today’s US data will be extremely important for the short-term outlook.

Written by
Nehmat Harb
Financial Advisor

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