Gold has climbed in early trading today and is around 1413.00 USD as of this writing, but expect volatility to continue for the precious metal. Crude Oil has also traded a bit upwards coming off of yesterday’s lows. Equity markets gained in Asia today, after a negative session on Wall Street yesterday. The Philly Fed Manufacturing Index missed its estimate on Thursday and the weekly Unemployment Claims came in slightly worse than expected.
Major economic data will be lacking today, but expect plenty of microphone time from officials of the IMF and G-20 as their meetings take place. Italy’s Parliament was not able to elect a President yesterday after two rounds of voting, another vote will be held today, but the outcome portends a troubling future for austerity measures that had been implemented by Prime Minister Mario Monti. The combination of IMF, G-20, and Italian news spilling over into the weekend is quite possible. PMI data will come from Germany and France next Tuesday and a 10-Y Bond Auction is scheduled for Italy tentatively on Wednesday the 24th. The ECB monetary policy meeting and press conference will be on May the 2nd, nearly two weeks away, but investors will look for signs from the ECB and IMF about a possible interest rate cut to come via any breadcrumbs that are thrown to the media this weekend.
The EUR continues to trade in a fairly consolidated mode as of this early afternoon (GMT) and is likely to nestle within known ranges the remainder of the day, possibly giving short-term traders an opportunity to test the waters based on formulated trends. The GBP and AUD have also traded slightly stronger versus the USD in trading today.
Quarterly earnings will continue from the States today and among some of the corporations reporting will be Honeywell, Kimberly Clark, and McDondalds. Yesterday’s earnings proved lackluster as a whole and combined with the disappointing Philly Fed Manufacturing Index fueled a decline across the three major indexes on Wall Street. Friday’s trading from the States will be watched carefully by global investors. Having been provided almost nothing but weekly gains since the beginning of this year, it is likely that having gotten used to winning sessions some short-term players may believe the markets will bounce back today (singing the old refrain ‘the sun will come out tomorrow’). And it should be noted that next Friday the Advance GDP numbers will come from the States and the outcome will be anticipated by investors and central bankers.
While the metals and energy sectors came off of their previous lows on Thursday in commodity trading the grains (softs) turned in mostly declines. The physical resource markets remain volatile (hostile?) and going into the weekend traders can expect more tests of values. However, with the possibility of a big weekend of news coming from European officials and their global counterparts regarding the risk of a weak European economy, investors will certainly practice some caution given their questions about the health of the global economy. Short-term traders should think twice about holding positions as Friday’s sessions end, with the possibility lurking that new developments could rumple enough feathers Saturday and Sunday to cause some treacherous Monday trading.