Fundamental News: July 2, 2013

 

Institute for Supply Management announced Tuesday that manufacturing has swung back to expansion in June, registering 50.9 after a 49.0 reading in May. ISM Manufacturing PMI has posted above the 50-level in 8 out of the last 10 months. Despite the expansion in the index, hiring reportedly eased to its weakest in about four years.

 

Today, Japan’s Ministry of Health, Labor, and Welfare reported a flat Average Cash Earnings for a second straight month in May.

 

In Australia, the central bank left its cash rate unchanged today. Reserve Bank of Australia maintained its rate at the record-low 2.75 percent after seeing signs of housing market pickup and relief for exporters as the Australian dollar weakened since the rate cuts which started in late-2011. The board, headed by Governor Glenn Stevens, sees “reasonable prospects of pick-up next year.” Stevens sees the local dollar “at a high level” and expects it to “depreciate further over time.”

 

In Europe, the Spanish Employment Ministry said Unemployment Change data showed a decline for the fourth straight month in June. The number of jobless Spanish fell by 127,248 compared to the prior month.

 

In the UK, Construction PMI expanded for the second month in a row, according to a Markit report earlier. The index grew to 51.0 in June, following May’s 50.8 reading.

 

A few hours from now, the US Census Bureau will release the Factory Orders data. Later in the afternoon, FOMC Members Dudley and Powell are expected to give their respective speeches.

 

 

Commodities News

 

Gold made a significant recovery last Friday, and it seems it has caught some wind as buyers were able to push for a marginal new high for the third day now. From a $1,180 low last Friday, price is now trading above $1,250. Potential resistance is right on top around $1,270-80. If gold can push past this area, it will have to tackle with $1,300-50 next.

 Gold chart 02 July 2013

Oil also made a significant progress, as price closed yesterday just above the $98 level after opening around mid-$96 and nearly touching the $96 level subsequently after. Price has been holding quite well in the $98 level for about 20 hours now, and it seems that it is just a matter of time when price makes a decision to move further up or give up some or most of yesterday’s gains.

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