Weekly Market Analysis

By Samir Al Khoury

The most important events of the past week

United States of America

• The headline consumer price index rose year-on-year, recording 3.5%, which exceeded expectations (3.4%) and the previous reading (3.2%). The core consumer price index (which excludes food and energy) recorded on an annual basis 3.8%, which was higher than expectations (3.7%) but consistent with the previous reading (3.8%).

• The Producer Price Index recorded on an annual basis 2.1%, which is lower than expectations (2.2%) but higher than the previous reading (1.6%).

• The initial jobless claims index declined, recording 211K, which is lower than expectations (216K) and the previous reading (222K).

• US crude oil inventories rose, recording 5.841 million barrels, which exceeded expectations (0.900M) and the previous reading (3.210M).

• The Michigan Consumer Confidence Index declined, recording 77.9 points, which is lower than expectations (79.0) and the previous reading (79.4).

Eurozone

• The European Central Bank decided to keep interest rates unchanged for the fourth meeting in a row, so that the interest rate on major refinancing operations settled at 4.50%, in line with market expectations.

United Kingdom

• The GDP index recorded an annual contraction of 0.2%, which was higher than expectations (-0.4%) but lower than the previous reading     (-0.1%).

• The industrial production index rose on a monthly basis, recording a growth of 1.1%, which exceeded expectations (0.0%) and the previous reading (-0.3%).

Canada

• The Bank of Canada decided to keep interest rates unchanged for the seventh meeting in a row, keeping the key interest rate at 5.00%, in line with market expectations.

China

• The headline CPI decreased year-on-year, registering a growth of 0.1%, which is lower than expectations (0.4%) and the previous reading (0.7%).

• The Producer Price Index decreased on an annual basis, recording a contraction of 2.8%, a rate that was in line with expectations but lower than the previous reading (-2.7%).

• The export index decreased on an annual basis, recording a contraction of 7.5%, which is lower than expectations (-3.0%) and the previous reading (7.1%).

• The import index decreased on an annual basis, recording a contraction of 1.9%, which is lower than expectations (1.2%) and the previous reading (3.5%).

Japan

• The industrial production index declined on a monthly basis, recording a contraction of 0.6%, which is lower than expectations (-0.1%) but higher than the previous reading (-6.7%).

The most important events of this week

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

• Today, the producer price index in Switzerland, industrial production in the Eurozone, and the retail sales and Empire State industry indices in New York State in the United States of America will be released.

• On Tuesday, the markets are awaiting indicators of investment in fixed assets, industrial production, retail sales, the unemployment rate in China, the income rates including bonuses and unemployment in Britain, the building permits and industrial production indices in the United States of America, in addition to the consumer price index in Canada.

• On Wednesday, the markets are awaiting the consumer price index in New Zealand, the export and import indexes in Japan, the consumer and producer price indexes in Britain, the consumer price index in the Eurozone, in addition to the US crude oil inventories index.

• Regarding Thursday, the markets are awaiting the rates of change in employment and unemployment in Australia, indicators of initial jobless claims, Philadelphia manufacturing industries, existing home sales, and the American leadership in the United States of America.

• Finally, the consumer price index in Japan and the retail sales index in Britain will be released on Friday.

Technical Analysis:

EUR/USD: 

If the euro against the dollar breaks the pivot point of 1.0714, it may potentially target and test the support levels of 1.0544, 1.0452, and 1.0282. Conversely, if it surpasses the pivot point, it is likely to test resistance levels of 1.0807, 1.0977, and 1.1070.

GBP/USD: 

The pound against the dollar, if it breaks the pivot point of 1.2526, has the potential to test the support levels of 1.2343, 1.2243, and 1.2061. However, if it exceeds the pivot point, it may test resistance levels of 1.2626, 1.2808, and 1.2909.

USD/JPY: 

If the pivot point of 152.70 is broken for the dollar against the yen, there is a possibility that it will target the support levels 152.03, 150.86, and 150.19. But if it exceeds the pivot point, it is likely to target the resistance levels 153.87, 154.54, and 155.71.

GOLD: 

If the pivot point of 2381 is broken for gold, there is a possibility that it will target the support levels 2314, 2254, and 2187. But if it exceeds the pivot point, it is likely to target the resistance levels 2441, 2508, and 2568.

BRENT CRUDE OIL:

If the pivot point of 90.48 for crude oil is broken, there is a possibility that it will target the support levels of 88.78, 87.10 and 85.40. If it exceeds the pivot point, it is likely to target the resistance levels 92.16, 93.86, and 95.54.

US30:

If the pivot point of 38,571 for the Dow is broken, there is a possibility that it will target the support levels 37,798, 37,358 and 36,585. If it exceeds the pivot point, it is likely to target the resistance levels 39,011, 39,784, and 40,224.

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

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