Daily Market Analysis – Commodities Come Roaring Back, Fed Chair Bolsters Market Confidence

Equities:
Japan’s Nikkei lead the way Friday, opening up in positive territory and closing with an 84pt gain. However, the Nikkei 225 still finished 9pts below 9,000. European markets bounced higher as the FTSE 100 advanced 0.89% to close out the week at 5,201. The Stoxx Europe 50 advanced 0.57% to 2,447. In spite of the gains European markets have closed lower for three straight weeks. In the U.S, traders bought on Fed Chairman Ben Bernanke’s assurance that the Central Bank has the tools necessary to keep the economy afloat. The Dow Jones Industrial Average rose from below 10,000 after gaining 165pts to round out the week at 10,150.

Weekly DJIA

Weekly DJIA

Commodities & Treasuries:
Commodities came roaring back to life as Oil posted a better than $1.80 gain to finish at $75.57 a barrel. It was Oil’s third win a row. The high flying Copper advanced nearly $6 to close back above $331. Gold was flat on the day picking up just over a one dollar an ounce to $1,238. U.S Treasury yields finally got a well deserved rest as the benchmark 10-yr shed almost 17bps to 2.64% and knocking price   into discount territory at 99-26+. However, yields are still trading at 17 month lows as investors moved some risk capital back out of the bond markets.

Currencies:
The U.S Dollar slipped on Friday as the DXY, the Dollar weighted basket of currencies fell back below 83 after giving up 0.35pts. Commodity currencies including the AUD, NZD, and CAD were amongst the biggest winners as commodity markets came storming back to life. The EUR gained for a third consecutive day and finally closed above 1.27. The GBP traded lower but stayed above its 200 day moving average after slipping 20 pips to close at 1.5513. The JPY finally closed back above 85 as the Greenback managed to climb almost 90 pips. Talk is starting to heat up in Japan regarding potential intervention via the Bank of Japan.

Economic Outlook:
Friday saw U.K GDP print in line with expectations at 1.7%, however, U.K Business Investment numbers fell sharply. In the U.S, the University of Michigan’s Confidence gauge came in slightly below forecast. Looking ahead to today, U.S Personal Spending  and Income will print, obviously poor data here will work to offset some of the Bernanke’s market impact. Additionally, the Dallas Fed Manufacturing Activity data will print. These number spooked the market last go round when they came in negative territory. There will be a number of Japanese Economic Data releases slated for today and traders may be looking to go short the JPY on any under performing prints with the assuming the JPY is nearing a bottom.

alex perlmuter

Follow our site for more information about Binary Options Trading

Share

Related posts:

  1. Binary Options Analysis – Quake hits Commodities Market
  2. Daily Market Analysis – Gold Soars
  3. Daily Market Analysis – CHF Rallies
  4. Daily Market Analysis – Currency Market Turn Volatile On Economic Data
  5. Daily Market Analysis – Oil Soars