Fundamental News: August 22, 2013

 

The National Association of Realtors in the United States announced yesterday that Existing Home Sales hit its strongest level since late 2009. Sales of residential buildings rose 6.5 percent to 5.39 million in July as more buyers took advantage of lower mortgage rates before the impending increases.

 

In the Federal Reserve’s Federal Open Market Committee Meeting Minutes released yesterday, the highlight was that almost all FOMC participants were comfortable with tapering later this year. The minutes also noted that the US unemployment rate has eased considerably and that some participants are open to lowering the unemployment threshold.

 

Today, China’s HSBC Flash Manufacturing PMI surprised the market with a better-than-expected reading for August. The index swung back above the 50 level and printed 50.1. Analysts only expected a 48.3 reading after July’s disappointing reading of 47.7.

 

In Europe, Flash Manufacturing PMI and Flash Services PMI data were released for France, Germany, and the Euro-area, and these came in at 49.7 and 47.7, 52.0 and 52.4, and 51.3 and 51.0, respectively.

 

Later, Canada will have its Retail Sales data, while the US will announce Unemployment Claims and Flash Manufacturing PMI. The Jackson Hole Symposium in Wyoming will start today.

 

Commodities News

 

Gold has remained suspended around the mid-$1,300s for the fifth straight day now. This is a strong indication of the support that buyers are putting on price. This is not to say price cannot decline; it can, but so far, buyers are making their efforts count. $1,350 and $1,400 are the key areas in the near-term.

 

 

It is interesting that the expectation of further selling is playing out well. The $105 level gave way and indeed more buyers were hit by the downmove. Price trekked toward the mid-$103s before a decent bounce happened. Buyers should keep propping price up around $104; otherwise, we could see $100-$102 soon.

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