The start of this week will be dominated by PMI data from China and Europe. Both economic giants have been under suspicion from a myriad of analysts regarding their overall health. While government officials in China and Europe both push party lines with the claim that their collective economies are doing well, data has not backed this up and the PMI readings on Monday will be of interest and have an effect on the EUR and major Asian currencies like the JPY and KRW.
The U.S. will also issue a PMI reading on Monday, but its significance will be fairly muted, this as housing sector figures begin to be published starting with the Existing Homes Sales numbers. On Tuesday the States will print the New Home Sales and the CB Consumer Confidence reports.
Equity markets in the U.S. are starting to defy gravity and while the major indexes enjoy profits, their lofty heights may be too expensive for many. On Wednesday Core Durable Goods Orders will be brought forth and investors will watch this number. Data from the U.S. has been lacklustre and this result will be monitored. The Final GDP number will be issued also on Wednesday and any surprises could roil FX, equities, and commodities.
Gold has been rising in value the past week and broken through short-term resistance levels. The precious metal is certainly within a speculative market and its rise in price has nothing to do with inflation which is absent in many cases. On Friday German CPI data will be released. The U.K. will present its GDP and Current Account reports. The U.S. will see the Revised University of Michigan Consumer Sentiment marks.
The key to the broad markets is psychological at this juncture. It is a game of ‘belief’. Risk appetite remains strong. The EUR and GBP are both in interesting ranges to begin this week and will offer traders plenty of short-term opportunities. U.S. data should be watched closely for negative results, meaning if the data does not meet expectations – the USD could weaken.