Fundamental News: September 23, 2013
Statistics Canada announced on Friday that Consumer Price Index grew at an annualized rate of 1.1 percent in August, succeeding a 1.3 percent gain in July. Consumers paid more for shelter and natural gas. Only the clothing and footwear and food components increased year-over-year basis. Among the provinces, Manitoba and Prince Edward Island have shown the biggest increase in prices. Meanwhile, the largest advances (seasonally adjusted, monthly basis) were seen in the recreation, education, and reading component (0.3 percent), and the food index (0.4 percent).
Today, China’s HSBC Flash Manufacturing PMI came in ahead of its expectations, 51.2 versus 50.9. This was followed by a couple of Flash Manufacturing PMIs and Flash Services PMIs from Europe – France with 49.5 and 50.7; Germany with 51.3 and 54.4; and Euro-area 51.1 and 52.1, respectively. All European Flash Services PMIs beat their expectations (corresponding prior readings were also revised higher), while all European Flash Manufacturing PMIs came in worse than expected.
Soon, Markit will announce the latest US Flash Manufacturing PMI. Meanwhile, European Central Bank President Mario Draghi is expected to testify at the quarterly hearing of the Committee on Economic and Monetary Affairs in Brussels. Other key officials will also give speeches later: UK MPC Member Ben Broadbent, SNB Chairman Thomas Jordan, and US FOMC Member William Dudley
The $76 jump seen in Gold last Wednesday did not help much in terms of the bulls’ cause as Friday’s price action obliterated most of those gains which in turn effected a marginally bearish weekly close. Bulls are still in luck, though, since $1,300 is yet to receive a serious attack. But they should not be complacent in this brand new week; they should create a heavy push towards $1,400 as soon as possible.
Last Friday’s close below $105 cemented the move by bears to close in on much lower prices. That weekly close is the first close below $105 since the start of September. Bulls should regroup and fortify their support camps around $102-$104 to avoid further bearish onslaught.