EVENTS & FINANCIAL NEWS 20-02-2014

Market Comment

US indices declined on Wednesday pressured by shares in the Banks, Diversified Financials and Media sectors. Fed officials agreed further gradual reductions in their stimulus would be appropriate as long as the economy keeps improving, according to FOMC minutes of Jan 28-29. The S&P 500 (1828.75) remains above its 20d moving average (1799.2 - flat slope) and its 50d moving average (1813.1 - flat slope).

European markets are expected to start on a negative note.

Foreign Exchange

US Dollar was mixed against most of its major counterparts on Wednesday. On the US economic data front, MBA Mortgage applications for the week ended February 14th dropped 4.1% (-2.0% prior). PPI final demand rose 0.2% MoM (+0.1% expected) in January. Housing starts slumped 16.0% MoM (-4.9% expected) in January while building permits fell 5.4% MoM (-1.6% expected). Finally, Fed officials agreed further gradual reductions in their stimulus would be appropriate as long as the economy keeps improving.

The Euro was mixed against its major counterparts. In Europe, euro zone construction output was up by 0.9% in December after a 0.2% decline the month before (revised from -0.6%).

The British Pound was firm against its major counterparts. UK unemployment rate increased to 7.2% for the October-December period from 7.1% in the previous period. Economists expected it to be flat. Jobless claims were down by 27.6K in January vs -27.7K the month before. Economists anticipated them to be down by 20K.

Commodities

After the close of Wall Street, WTI Crude Future (MAR 14) was up $1 to $103.44. The contract was above its 20D MA (@ $95.67) and above its 50D MA (@ $96.35). The 14d RSI above 70 (73.51) indicates WTI Crude Future (MAR 14) was overbought.

Gold was down $10.2 to $1311.8. The precious metal was above its 20D MA (@ $1277) and above its 50D MA (@ $1247).

Copper Future (MAR 14) on Comex was about flat to 327.85c/lb. The contract was below its 20D MA (@ 330.62c) and above its 50D MA (@ 326.76c). In Europe, the London Metal Exchange reported its copper inventories decreased 2525 tons to 290625 tons.

European Markets

ECB: Publication of the Euro area financial vehicle corporations statistics (10am CET); Presentation and participation by Mr Constcio in panel discussion at the "12th Annual European Financial Services Conference" (11:30am CET)

Today's Economic Events

FR 07:45: JAN Consumer Price Index (MoM): -0.4%
FR 07:45: JAN CPI - EU Harmonised (MoM): -0.5%
GE 07:00: JAN Producer Price Index (MoM): 0.2%
EC 15:00: JAN Euro-Zone: Consumer Confidence: -11
US 13:30: W6 Initial Jobless Claims (Thsd): 334
US 13:30: JAN Consumer Price Index (MoM): 0.1%
US 13:30: JAN CPI - Ex Food & Energy (MoM): 0.1%
US 15:00: FEB Philadelphia Fed.: 8
US 15:00: JAN Leading Indicators: 0.4%
US 16:00: W6 Crude Oil Inventories (WoW chg): NA

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Gold And Silver Subject To The FOMC Minutes...

It’s the Fed and the Fed and the Fed again. With traders are holiday around the globe and data light, the Federal Reserve is the main event. Although the FOMC minutes are a top tier event and are usually on center stage, they will have more importance to traders today as trading volume is down, news is light with politicians and traders on summer vacation and little data scheduled on the global economics calendar. This puts the FOMC minutes in the center ring under the big top. Regardless of the reading of the minutes markets should be volatile. Traders are now positioning themselves ahead of the release. Gold prices pared the initial losses as a stronger dollar and easing bond yields supported prices. Uncertainty regarding the Fed’s bond buying program also swung gold prices between gains and losses.

 Demand for US gold coins has eased in recent weeks as buying from retail investors slowed down amid recovering gold prices. Russia increased its gold reserves to 32.2 million troy ounces in July from 32 million troy ounces in June. Gold prices internationally are expected to remain in range as investors would await the FOMC meeting minutes to get cues on the future course of Fed’s bond buying program.


A recent survey showed that a majority of economists expect the Fed to announce a tapering plan in September and suggest that the Fed will cut back their asset purchases by 10 billion US dollars. Gold is trading at 1367.70 down by $4.90 in the Asian session. Gold futures recovered yesterday to close higher on COMEX, as investors were encouraged by prospects for seasonal demand from Asia as the market awaited release of the latest US Federal Reserve policy-meeting minutes.

Gold holdings of SPDR gold trust, the largest ETF backed by the precious metal, increased to 914.12 tons, as on August 20. Silver holdings of ishares silver trust, the largest ETF backed by the metal, increased to 10,555.7 tons, as on August 20. Silver has taken a major tumble as trader’s book profits. Silver is down by 81 pips this morning trading at 22.99 after holding this week above the $23 price level.

The dollar index, which measures the US unit against six rivals, edged down to 81.238 from 81.255 on late Monday, after swinging between losses and gains. The dollar nose dives late yesterday to trade in the upper 80 range and rebounded this morning to trade at 81.00 Copper futures traded steadily on Tuesday but eased this morning to trade at 3.323, with traders reluctant to place large bets ahead of the release of Chinese manufacturing data and details from the Federal Reserve’s most recent policy meeting. Copper prices rose on Tuesday as a weaker dollar supported prices. However, fears of bond tapering by Fed limited the upside in prices. The global nickel market was in surplus by 74,200 tonnes in the first six months of the year, according to the International Nickel Study Group. Base metals are likely to go down on caution ahead of FOMC meeting minutes and Chinese and Euro zone manufacturing numbers tomorrow.

Contact Us:

Asad Rasheed
Direct:04-3841906
Email:asad@cfb.ae
Email:info@cfb.ae

For more information please visit our website century financial brokers.

Here are some useful links that you can follow:

Here is a CFB blog that gives useful daily Gold Analysis on dailybasis.

You can also follow CFB on facebook (useful advice on posts regularly)

Here is another blog that provides regular news and information and is very useful for Forex Signals.

News Source: www.marketwatch.com