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Fundamental News: September 17, 2013


Statistics Canada’s latest report on Foreign Securities Purchases showed actual data beat its expectations for July. Foreign investors acquired CAD6.1 billion worth of Canadian securities, surprising analysts and beating the –CAD2.23 billion median expectation. Purchases of Canadian securities by foreigners have now risen in 4 out of the last 5 months.


US Empire State Manufacturing Index sagged to its lowest in 4 months to 6.3, according to the latest data retrieved from the Federal Reserve Bank of New York. Analysts’ median expectation was for a September gain to 9.2, from the prior month’s 8.2 reading.


Meanwhile, US Capacity Utilization Rate inched up to 77.8 percent from 77.6 percent, and US Industrial Production improved slightly to 0.4 percent in August.


Today, the Reserve Bank of Australia released the latest Monetary Policy Meeting Minutes. The minutes noted that growth pace had continued and growth seen in Australia’s key trading partners stood around the past decade’s average pace. Furthermore, it noted that the Australian dollar remains high, and no rate cut is imminent (although possibility for a rate cut remains).


In Europe, the European Central Bank announced a slower-than-expected growth in the Current Account which showed a gain of EUR16.9 billion (versus EUR18.3 billion expected). This is the lowest in the last 5 months.


In the UK, the Office for National Statistics revealed earlier that Consumer Price Index decreased slightly to 2.7 percent in August. Autumn clothing and transport prices grew less compared to a year earlier. Retail Price Index grew 3.3 percent, while PPI Input decreased 0.2 percent.


German and Eurozone ZEW Economic Sentiment climbed to 49.6 and 58.6, respectively. These were much better than expectations (49.6 and 58.6 respectively).


Later, the market will wait for Canada’s Manufacturing Sales, US CPI, US TIC Long-Term Purchases, and US NAHB Housing Market Index.


Commodities News


Despite the overwhelming selling momentum yesterday, price fizzled out ahead of the $1,300 level thanks to strong prop-up defense of the buyers near the level. So far, the bounce has only reached the low-$1,320s, and this is still insufficient to break through Monday’s gap high around $1,335. Buyers are probably facing an uphill battle toward $1,350-70, ahead of the coveted $1,400 level.


Oil stopped short of breaking though the $106 level on Monday, but sellers pushed for a follow-through down move today. Price reached the $105.50s before a bounce brought price back above $106. Based on the current price action, a decline toward $102-$104 remains a possibility.



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