The most important events of the past week

By Samir Al Khoury,

United States of America

• The pending home sales index declined, recording a contraction of 7.7%, which is lower than expectations (-1.1%) and the previous reading (3.6%).

• The GDP index declined on a quarterly basis, recording a growth of 1.3%, which is lower than expectations (1.6%) and the previous reading (3.4%).

• US crude oil inventories fell, recording 4.156 million barrels, which is lower than expectations (-1.600M) and the previous reading (1.825M).

• The initial jobless claims index rose to 219K, which exceeded expectations (218K) and the previous reading (216K).

• The Consumer Confidence Index rose, recording 102.0 points, which exceeded expectations (96.0) and the previous reading (97.5).

• The core personal consumption expenditures price index recorded 2.8% on an annual basis, a rate that was in line with expectations and the previous reading.

Eurozone

• The Consumer Confidence Index recorded -14.3 points, which is in line with expectations but higher than the previous reading (-14.7).

• The unemployment rate was 6.4%, which is lower than expectations and the previous reading (6.5%).

• The headline consumer price index recorded on an annual basis 2.6%, which exceeded expectations (2.5%) and the previous reading (2.4%). The core consumer price index (which excludes food and energy) recorded an annual rate of 2.9%, which is higher than expectations and the previous reading (2.7%).

Switzerland

• The GDP index rose on a quarterly basis, registering a growth of 0.5% points, which is a percentage that exceeded expectations and the previous reading (0.3%).

Australia

• The monthly retail sales index recorded a growth of 0.1%, which is lower than expectations (0.3%) but higher than the previous reading (-0.4%).

China

• The Manufacturing Purchasing Managers’ Index (PMI) declined, recording a contraction of 49.5 points, which is lower than expectations (50.5) and the previous reading (50.4).

• The non-manufacturing PMI declined, registering a growth of 51.1 points, which is lower than expectations (51.5) and the previous reading (51.2).

Japan

• The Tokyo Consumer Price Index recorded an annual rate of 1.9%, which was in line with expectations but higher than the previous reading (1.6%).

• The industrial production index declined on a monthly basis, contracting by 0.1%, which is lower than expectations (1.5%) and the previous reading (4.4%).

• The retail sales index rose on an annual basis, recording 2.4%, which exceeded expectations (1.8%) and the previous reading (1.1%).

The most important events of this week

This week, financial markets are eagerly awaiting the release of several key economic indicators:

• Today, the Manufacturing Purchasing Managers’ Index will be released in Australia, Japan, the Eurozone, Britain, and the United States of America, the Caixin Manufacturing Purchasing Managers’ Index in China, and the Construction Spending and Manufacturing Purchasing Managers’ Indexes issued by the Institute for Supply Management (ISM) in the United States of America.

• On Tuesday, the markets are awaiting the retail sales index in Australia and the consumer price index in Switzerland, in addition to the factory orders and job opportunities indices in the United States of America.

• As for Wednesday, the markets are awaiting the interest decision issued by the Central Bank of Canada, amid expectations that it will reduce interest rates by 25 basis points from the level of 5.00% to 4.75%. The services PMIs are issued in Australia, Japan, the Eurozone, Britain, and the United States of America, the GDP index in Australia, the services PMI from Caixin in China, in addition to the indicators of change in non-agricultural private sector jobs issued by ADP and the non-manufacturing purchasing managers index issued by the Institute Supply Management (ISM) and US crude oil inventories in the United States of America.

• Regarding Thursday, the markets are awaiting the interest decision issued by the European Central Bank, amid expectations that it will reduce interest rates by 25 basis points from the level of 4.50% to 4.25%. It issues the trade balance index in Australia, the unemployment rate in Switzerland, the construction PMI in Britain, the rate of change in employment and retail sales in the Eurozone, the initial jobless claims and trade balance in the United States of America, and the trade balance and Ivy Purchasing Managers indices in Canada.

• Finally, on Friday, indicators of foreign exchange reserves, exports and imports in China, the GDP index in the Eurozone, indicators of the non-farm payrolls report (NFP), the unemployment rate, and average hourly wages in the United States of America, in addition to the rates of change in employment and unemployment in Canada, were released.

Technical Analysis:

EUR/USD: 

If the euro against the dollar breaks the pivot point of 1.0840, it may potentially target and test the support levels of 1.0793, 1.0740, and 1.0692. Conversely, if it surpasses the pivot point, it is likely to test resistance levels of 1.0894, 1.0941, and 1.0995.

GBP/USD: 

The pound against the dollar, if it breaks the pivot point of 1.2739, has the potential to test the support levels of 1.2679, 1.2620, and 1.2560. However, if it exceeds the pivot point, it may test resistance levels of 1.2800, 1.2860, and 1.2919.

USD/JPY: 

If the pivot point of 157.10 is broken for the dollar against the yen, there is a possibility that it will target the support levels 156.49, 155.75, and 155.15. But if it exceeds the pivot point, it is likely to target the resistance levels 157.83, 158.44, and 159.17.

GOLD: 

If the pivot point of 2356 is broken for gold, there is a possibility that it will target the support levels 2330, 2315, and 2290. But if it exceeds the pivot point, it is likely to target the resistance levels 2370, 2396, and 2411.

BRENT CRUDE OIL:

If the pivot point of 82.60 for crude oil is broken, there is a possibility that it will target the support levels of 80.18, 78.75 and 76.33. If it exceeds the pivot point, it is likely to target the resistance levels 84.03, 86.45, and 87.88.

US30:

If the pivot point of 38,712 for the Dow is broken, there is a possibility that it will target the support levels 38,189, 37,588 and 37,065. If it exceeds the pivot point, it is likely to target the resistance levels 39,313, 39,836, and 40,437.

Please note that this analysis is provided for informational purposes only and should not be considered as investment advice.

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