Friday, February 7, 2014


Market Comment

US indices jumped on Thursday helped by shares in the Retailing, Media and Consumer Durables & Apparel sectors. The S&P 500 (1773.43) remains below its 20d moving average (1806.3 - negative slope) and its 50d moving average (1809.5 - negative slope). The 20-day moving average has crossed below the 50-day one (a bearish crossover).

European markets are expected to start on a flat note.

Foreign Exchange

US Dollar fell against most of its major counterparts on Thursday. On the US economic data front, initial jobless claims fell to 331K (335K expected and 351K prior) in the week ended February 1st. Trade deficit widened 12% to $38.7B (36.0B expected) in December according to the Commerce Department.

The Euro was firm against its major counterparts. In Europe, ECB kept its benchmark interest rate at 0.25%, as expected. ECB President Mario Draghi said the ECB is "ready to act" regarding the economic situation. German factory orders were sown by 0.5% in December after a 2.4% gain in NOvember. Economist anticipated a 0.2% increase.

The British Pound was mixed against its major counterparts. Bank of England kept its benchmark interest rate at 0.5% and held its asset purchase target at £375B.


After the close of Wall Street, WTI Crude Future (MAR 14) was about flat to $97.82. The contract was below its 20D MA (@ $98.29) and above its 50D MA (@ $96.59). 

Gold was about flat to $1257.4. The precious metal was above its 20D MA (@ $1252) and above its 50D MA (@ $1235). 

Copper Future (MAR 14) on Comex was up 3.5c to 322.35c/lb. The contract was below its 20D MA (@ 330.62c) and below its 50D MA (@ 326.76c). In Europe, the London Metal Exchange reported its copper inventories decreased 1975 tons to 309250 tons.

UK Market News

The Recruitment and Employment Confederation (REC) and KPMG Report on Jobs pointed out: "Permanent staff placements continued to increase strongly in January, although the pace of expansion eased from the 45-month high recorded in December. Similarly, temp billings rose at a rate only marginally slower than December’s 15-year peak. (...) Overall job vacancies rose at a sharp and accelerated rate in January. The pace of expansion was the fastest in over 15.5 years. (...) The rate of growth of permanent staff salaries remained elevated at the start of 2014, holding at a pace broadly in line with December’s six-year peak."

European Markets

Press briefing on the occasion of the SSM Framework regulation consultation chaired by Ignazio Angeloni, Director General Macro-Prudential Policy and Financial Stability of the ECB, and Edouard Fernandez-Bollo, Secretary General of the Autorité de Contrôle Prudentiel et de Résolution and Head of the Workstream that devised the draft ECB SSM Framework Regulation, in Frankfurt. 11 am CET.

Fitch Ratings has affirmed Iceland's rating at "BBB", outlook "Stable", saying: "Iceland's ratings are supported by its high level of income per capita and indicators of governance and human development similar to the highest-rated sovereigns."

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