It was a big day in China yesterday as they have finally concluded a once-in-a-decade meeting of the Party Congress where Xi Jinping was chosen to head China’s Communist Party. China’s Politburo, the country’s top senior decision-making group, also revealed the members of its Standing Committee. Investors will keenly look forward to all future political developments in this Asian giant.
Meanwhile, UK Retail Sales in October flipped back to negative territory, printing a much worse-than-expected minus 0.8 percent, after posting 0.6 percent growth last month. This is its worse reading since June and came in as a shock and concern for many analysts. Data showed consumers have cut back on their spending for food and clothing, and thus could put a dent on the data for the final quarter of this year.
On the other side of the Atlantic, several US economic releases manifested the aftereffects of Superstorm Sandy as it tore through the American Northeast right before the US elections. Aside from devastating homes and infrastructures and knocking power, water, phone, and heating services, Sandy also wreaked havoc on the labor market and limited business activities. Unemployment Claims came in higher at 439,000 and the last reading was also revised higher from 355,000 to 361,000. Philadelphia Fed Manufacturing Index also came in much worse than forecast at -10.7, its third worst reading this year. This index covers the areas of Delaware, eastern Pennsylvania, and southern New Jersey.
Later today, the market will set its sights on US Industrial Production and TIC Long-Term Purchases, FOMC Member Lockhart’s speech, and ECB Governing Council voting member and German Bundesbank President Jens Weidmann’s speech in a conference in Berlin.
The $20 plunge in gold yesterday towards $1,700 came as no surprise to us since this has been expected for quite some time now. After reaching $1,704, price made a quick $12-bounce, after which it preferred to go on range trading mode. Price is currently nestled $10 above $1,700, and we could see a trending move either way depending on the interest of either side later today.
Oil had a tough time breaking the range resistance around $86.80 and it proved to be the same case today as evidenced by the quick $1.70 rejection in price from $86.90. Price has remained virtually static around $85.30 and price is currently hovering just above the $85.00 level. Traders could perhaps expect another range trading day (or week) towards $84.00.