Will US Shoppers Rescue Europe's Economy?
Stock-Markets / Financial Markets 2011 Oct 14, 2011 - 06:53 AM GMTThis morning there is a muted reaction to the downgrade of Spanish debt by ratings agency S&P. It seems that the agency has done little more than confirm what markets have been saying for weeks. Today we have the start of the G20 meeting which runs into the weekend. The talks will be centred around Europe with terms of the rescue plan still being finalized amid news that France and Germany are disagreeing on Lisbon treaty reforms.Markets are in a holding pattern right now, but this could be broken by some strong data from the US today.
Last week it was the better than expected NFP data that lifted markets and with US retail sales data due today. Today American shoppers could once again provide Europe with some breathing space. Or not…The hourly charts of the EUR/USD and AUD/USD capture the current mood rather well with choppy range bound trading being the dominant theme in the last couple of days.
The USD/CAD is showing a similar pattern with the pair’s descent coming to a halt around 1.2000.
Gold is no longer a one way ticket, but the trend still seems to be pushing higher. A breakout day is surely due.
Coming up today we have US retail sales and core retail sales due at 13.30 with a rise expected of 0.2% and 0.5% respectively.At 14.55 the consumer remains in focus with the release of preliminary University of Michigan Consumer Sentiment figures. A rise to 60.20 is expected.The current impasse cannot last forever with pairs such as the NZD/USD looking prime for a breakout.
A good way to play this at Betonmarkets might be an IN/OUT trade predicting that the NZD/USD closes outside of either 0.7850 or 0.8050 in 3 days’ time (Monday). This could return 177% if successful.
Dave Evans
Email: editor@my.regentmarkets.com
Url: www.BetOnMarkets.com
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