The Week that Was and the Week Ahead – U.S. Dollar and Wall Street Show Strength

U.S. Jobs Market Still Hiring and Wages Remain Rather Flat, Dow Jones Reaching New Heights

Before going into the weekend, the U.S jobs market proved two things. One, employment remains strong and hiring remains abundant. And number two: Average Hourly Earnings have not risen dramatically, which highlights inflation remains lackluster. Traders responded to the jobs numbers by buying the U.S Dollar and pushing the major equities on Wall Street higher. However, speculative forces remain evident. The strengthening of the U.S Dollar was not based on a sudden change in the mindset of investors, the Federal Reserve is not about to raise its interest rate in the short term. This week’s highlight for U.S data will be the Core Consumer Price Index figures which will be published on Friday. Market participants will watch the Dow Jones Industrials Index carefully because it will start it’s trading near the 22,100 level when trading starts tomorrow.

Risk Appetite will be Tested Immediately, Yen Loses Steam against U.S. Dollar

Asian investors will have their risk appetite put to the test immediately when trading commences on Monday. After turning in rather cautious results last week, traders will have to respond to the reversal the U.S Dollar mustered against the Yen, as the Japanese currency weakened and finished near 110.70. Leading Indicators statistics will come from Japan on Monday, and on Tuesday Trade Balance data is tentatively scheduled to come from China early in the morning. And on Wednesday, China will issue important inflation results via Consumer Price Index readings. The Nikkei and other leading Asian equity Indexes will be watched carefully early this week to see if they enjoy a bounce upwards via a reaction to the rise on stock exchanges from the States.

European Equities Gain, Euro & Pound Reverse  

European equities went into the weekend with gains. The Dax turned in a particularly strong performance gaining over one percent on Friday, but the German Index is still negative over the last month of trading. The Euro came off of its highs swiftly upon the results from the U.S jobs numbers and will start its trading below the 1.18 level. Germany will release Trade Balance numbers on Tuesday. The U.K produced rather uninspiring data last week, but the Halifax Home Price Index will be issued on Monday, and on Thursday a Manufacturing PMI report will be issued. The Pound lost value against the U.S Dollar on Friday and will start its trading near the 1.3040 mark when forex opens.

An Opportunity for Technical Traders, Gold Doesn’t Break Resistance

Gold finished last week under pressure as the U.S Dollar rebounded. The precious metal has gained substantially the past few weeks, but resistance was not broken. At 1264.00 U.S Dollars an ounce, Gold will open trading on Monday still within sight of its mid-term highs, but will likely be speculative in the coming days. The precious metal could prove opportunistic for technical traders via short term support and resistance trading.

Inflation Data from China & States, Trade Balance Statistics Coming

The U.K will see the Halifax Home Price Index on Monday at 7:30 GMT. On Tuesday, Germany will release its Trade Balance statistics at 6:00 GMT. A Consumer Price Index will come from China early on Wednesday at 1:30 AM. The U.K will issue its Manufacturing Purchasing Managers Index at 8:30 AM on Thursday. Finishing up the week will be the Core Consumer Price Index results from the States at 12:30 GMT on Friday.

Highlighted Economic Data   

Monday, 7:30 AM GMT U.K., Halifax Home Price Index

Tuesday, 6:00 AM GMT Germany, Trade Balance

Wednesday, 1:30 AM China, Consumer Price Index

Thursday, 8:30 AM GMT U.K., Manufacturing PMI

Friday, 12:30 PM GMT U.S., Core Consumer Price Index

Yaron Mazor is a senior analyst at SuperTraderTV.

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