Not that the broad markets have been closed this week, but volumes are only now beginning to get serious again. With the Non-Farm Employment Change numbers coming from the States later today the markets will be back in full swing.
The EUR has traded in a fairly consolidated manner the past week. Holiday trading did take the Single Currency higher during the odd trading day between Christmas and the New Year, but the EUR slid back to support levels – where it stands right now.
The GBP has done better. Economic data from the U.K. has had mixed results recently – like many of its global counterparts – but Sterling is still finding favour with a large crowd. The GBP has plenty of attention as the U.K. economy is compared to the convoluted mess from the E.U., today Manufacturing Production numbers will come from Britain.
The Fed still is the focus for most traders and if the jobs numbers are better than expected today it could set off an interesting chain of events for the USD. If investors believe the Fed has enough ammunition to continue its taper the USD might get stronger while it could cause some nervousness among those on Wall Street and international bourses. The question is if the U.S. economy is as strong as its supporters suggests? There are still doubters among analysts – including Digital Markets Advisor – that believe American consumers are not convinced that better days are coming soon this because although the Official Unemployment Rate may look improved, the quality of the jobs are not excellent, in other words underemployment remains a problem. We believe the proof in the pudding will come the next few months and the next quarterly earnings that are published from the corporate front will be a big clue about the outlook for the States.
Other evidence that suggests not everything is golden are the prices of commodities which are not exactly strong as of late and are in fact near one year lows. Economic data from China is again showing real question marks within its Manufacturing and Industrial sectors and doubts remain regarding the ability and desire of the Chinese government to offer straight forward reports. China’s shadow banking sector is highly suspect too with a large amount of Chinese citizens having taken loans in order to buy into a real estate market that is bubble like.
Gold as of this morning has traded slightly stronger, but is approaching resistance levels that have become well-known. The price of Gold is near 1234.00 as of this writing. Bears are still in control of the precious metal and without any major inflation on the short-term horizon, look for Gold to remain near its lows.