Comment on the situation on a market 02/12/13

Coming week is expected to be full of economic events

Coming week will be reach in important economic data. There will be events related to meetings of the Central Banks of the UK and Eurozone on interest rates. We cannot expect from those meetings that interest rates will change, but certainly market participants will be looking forward to the release of data on U.S. employment. Before this year’s last meeting of the Fed this data will be the key to understanding of when reduction in government bond purchases will take place. In spite of the predicted increase in new jobs at a non-agricultural sector to 185 000 from the previous amount of 204 000, financial markets expect signals from the Fed about the period when stimulus reduction will start. It’s highly possible that on the December’s meeting this decision will not be made, but there may be comments about purchase reduction that may start already by spring 2014.

While expecting the release of the US data and the Fed’s meeting there may not be much activity in the Forex market. 

Today Australian and New Zealand dollars received a significant local support due to the good Chinese data. Business activity index in an industrial sector of China from HSBC came out better than was expected – 50.8 points against 50.5 points. At the same time industrial indices PMI from Germany and Eurozone came out better than was thought too. However, this data couldn’t support Euro because market participants continue to wait for the statements from the head of ECB about the extension of the soft monetary policy.

Today we should pay attention to data from the U.S. If it’s not worse than expected, it can support the U.S. dollar.
 

Semen Kamenski​