Daily Market Review – 4th December 2012
Promising signs that a revival in the Chinese economy could now be in progress were offset by worse-than-expected manufacturing news from the USA. Global stocks weakened in response to these developments as shown in the following table.
A major index published by the US Institute for Supply Management yesterday revealed an ominous slump in American manufacturing activity by registering its lowest value since July 2009. Officials were quick to stem the damage by advising that the recent hurricane Sandy was largely responsible for this disheartening news.
Despite any new world-wide developments, good or bad, the US fiscal cliff crisis remains the chief focus of the markets. With deadlines looming, Washington continues to bicker causing investors to adopt an increasing risk aversive stance. Unless the current deadlock is broken, analysts are stressing that stock prices will not be able to sustain any meaningful bullish rallies.
Numerous important global economic data are scheduled for publication this week. The Eurozone will post its Producer Price Index today; Gross Domestic Product figures on Thursday following by its interest rate decisions on Thursday. The USA will issue its market-moving Non-Farm Payroll figure and Unemployment Rate on Friday.
However, despite the importance of this data, everything pales into the shadows compared to the fiscal cliff. Unless some surprising resolution is forthcoming over the next few days, expect the stocks markets to remain pressurized.
EURUSD: The Euro achieved a 6 week high against the dollar yesterday powered by hopeful news from Spain, Greece and especially China. The pair is expected to continue inching higher throughout this week.
Preference: bullish
PUT option: below 1.3005
CALL option: above 1.3105
Expiry time: 4pm EST Thursday
GBPUSD: An inspirational Chinese PMI manufacturing figure propelled the British pound to its highest levels against the USD since the first week in November. Although the GBP is now forecasted to climb further this week, it not expected to maintain its new bullish trend in the long-term. This is because the UK economy is facing major headwinds.
Preference: bullish
PUT option: below 1.6032
CALL option: above 1.6141
Expiry Time: 4pm EST Thursday
GOLD prices climbed yesterday as bullion acquire support from a faltering US dollar. Uncertainties over the fiscal cliff are predicted to boost gold further this week.
Preference: bullish
PUT option: below $1,714.48
CALL option: above $1,721.84
Expiry Time: 4pm EST Thursday
OIL: Fresh optimism of a potential Chinese economic resurgence bolster oil prices yesterday before they trimmed their gains towards market close. However, this commodity is still struggling to define a definitive trend.
Preference: neutral
PUT option: below $88.31
CALL option: above $90.56
Expiry Time: 4pm EST Thursday
APPLE shares slipped on Monday by nearly 0.70% as they tracked the falling equity markets. They are expected to remain under pressure for the remainder of this week.
Preference: neutral
PUT option: below $582.89
CALL option: above $588.17
Expiry Time: 4pm EST Thursday
GOOGLE: Google pushed higher on Monday by climbing almost 1% despite slipping market prices. Analysts are now forecasting that it will continue to rise within its week-old bullish trend at least in the short-term.
Preference: bullish
PUT option: below $685.85
CALL option: above $699.26
Expiry time: 4pm EST Thursday
