Weekly Market Review
March 7, 2011
The civil war in Libya escalated last week as troops supporting leader Qaddafi used artillery and helicopter gunships in an attempt to block the rebels' moves to the west from the oil hub of Ras Lanuf.
Oil prices extended gains in the Asian session on today (Monday) amid news that fighting in Libya intensified as Qaddafi's army launched counter-attacks against the rebels. The front-month contract for WTI crude oil price rallied to as high as 105.92.
On the Macro side, The February US Nonfarm payrolls report released on Friday indicated that the us job market added 192,000 new jobs, slightly better than expected. US February Unemployment dropped to 8.9%, good news and back down to where it was in April 2009
The US ISM Service index rose to 59.7, the highest level since 2005. On a related note, the ISM manufacturing Index hit a multi-year high of 61.4, exceeding the Briefing.com consensus of 60.5.
dollar has not been much of a recipient of safe-haven flows lately, Due
to the comments regarding the ECB raising its interest rate next month
while In the US a Rate hike is expected in the first quarter of 2012
Asset In Focus
EUR/USD The Euro jumped to a fresh four-month high above 1.40 during Friday's session after European Central Bank President Trichet said the central bank may need to raise rates as early as next month. The Euro currency rallied against the US Dollar from a low of 1.3939 after Trichet told reporters in Frankfurt an "increase of interest rates in the next meeting is possible" as inflationary pressures mount.
Resistance; 1.4000, 1.4091, 1.4121, 1.4280
Support; 1.3912, 1.3870, 1.3804, 1.3780
during Friday's session, the currency peaked at 1.6304 and there was
little to encourage further buying after the England House Price Index
fell 0.9 % in February. Weak economic data is hampering the pound at the
moment and it may not get much assistance this week when The Bank of
England is expected to leave interest rates on hold at 0.50 % on
Resistance; 1.6304, 1.6347, 1.6494
Support; 1.6250, 1.6282, 1.6094, 1.600
GOLD moved firmly higher on Friday as safe-haven appeal continued to support the precious metal along with a further weakening USD on the back of the in-line payrolls data. Gold finished US trade stronger by 0.85% at $1,430. There is not much that can get in the way of Gold at the moment as tensions in the Middle East continue to support the price as safe-haven appeal continues. We believe that Gold will see further gains, however, this move could easily unwind at any minute.
USD continues to weaken which is adding further support to Gold as
investors do not see the USD as a safe haven currency anymore and would
rather be invested in commodities.
Resistance; 1435, 1450
Support; 1425, 1420, 1413
Monday the 7th
• 12:00GMT EUR, ECB Trichet's speech.
• 23:50GMT JPY, Japan Trade Balance.
Tuesday the 8th
• 00:30GMT AUD, Australia Business Confidence.
• 06:45GMT CHF, Unemployment Rate.
• 13;15GMT CAD, Housing Starts.
• 23:30GMT AUD, Consumer Confidence.
Wednesday the 9th
• 08:15GMT CHF, Consumer Price Index.
• 09:30GMT GBP, Goods Trade Balance.
• 11:00GMT EUR, Germany Industrial Production.
• 20:00GMT NZD, RBNZ Rate Decision.
• 23:50GMT JPY, GDP Numbers.
Thursday the 10th
• 00:30GMT AUD, Employment Rate.
• 09:30GMT GBP, Industrial Production.
• 12:00GMT GBP, BOE Rate Decision.
• 13:30GMT USD, Initial Jobless Claims.
• 13:30GMT USD, Trade Balance.
Friday The 11th
• 02:00GMT CNY, China Price Index.
• 02:00GMT CNY, China Producer Price Index.
• 02:00GMT CNY, China Retail Sales.
• 07:00GMT EUR, Germany Consumer Price Index.
• 09:30GMT GBP, England Producer Price Index.
• 12:00GMT CAD, Canada Unemployment Rate.
• 13:30GMT USD, US Retail Sales.
• 14:55GMT USD, Reuters/Michigan Consumer Confidence.
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