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Fundamental News: August 1, 2013

 

Automatic Data Processing revealed yesterday that ADP Non-Farm Employment Change beat expectations as it rose 200,000 in July. The June reading was also revised higher to 198,000 from 188,000.

 

Bureau of Economic Analysis said US Advance GDP gained at an annualized rate of 1.7 percent in the second quarter of 2013. Being an advanced figure, it is potentially lower than the first quarter’s 1.8 percent gain.

 

Chicago Purchasing Managers’ Index increased to 52.3 in July from 51.6, a good indication of business outlook for the second half of this year.

 

Statistics Canada reported that Gross Domestic Product climbed 0.2 percent in May, led by the service industry (wholesale and retail trade). This is the fifth consecutive monthly advance.

 

On the latest US FOMC statement released yesterday, it basically pointed that economic activity and the labor market improved, and there is inflation risk of staying below the 2 percent objective however it is expected to be reached in the medium term. Federal Funds Rate remained unchanged below 0.25 percent.

 

Today, China’s Manufacturing PMI stayed above the 50 level and registered 50.3 in July, indicating slowdown might have ceased or stabilized, according to the China Federation of Logistics and Purchasing. On the other hand, HSBC Final Manufacturing PMI came in at 47.7 in July, as expected.

 

In Europe, Manufacturing PMIs for Spain, Italy, Euro-area and the UK came in at 49.8, 50.4, 50.3, and 54.6 respectively. Only Spain’s M-PMI failed to beat its median estimate.

 

The European Central Bank and the Bank of England both held their rates at 0.50 percent.

 

Soon, traders will focus on the ECB press conference, US Unemployment Claims, US ISM Manufacturing PMI.

 

Commodities News

 

The $1,300-50 range continues to hold for another day as buyers successfully defended the $1,300 level yesterday. Sellers attempted a mad dash toward $1,300 but buyers retaliated with a much quicker buying sweep around $5 from the aforementioned level. Price could experience further volatility until Friday’s US Jobs data, so traders should take additional caution until then.

 

 

Buyers did extremely well yesterday as they brought price higher, cutting through several levels and closing above $105. The momentum continued as sellers bailed out of their positions, pushing price further. In fact, $107 has been touched just a few hours ago. Buyers now need to support $105-$106 to keep the momentum on their side.

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