Daily Market Review- 30th March 2012

Fundamental news

Today’s highlights:

·         Core PCE Price Index + Personal Spending (MoM) (U.S, 12:30 GMT)

·         Michigan Consumer Sentiment Index (U.S, 13:55 GMT)

·         Chicago PMI (U.S, 13:45 GMT)

·         CPI (YoY) (EUR, 09:00 GMT)

The U.S. Initial jobless claims fell 5,000 in the week ended March 24 to 359,000, the lowest since April 2008, the Labor Department reported on Thursday. Adding to evidence labor market is strengthening. In addition, the economy in the U.S. grew at a 3 percent annual rate in the last three months of 2011, the same as previously estimated, while corporate profits climbed at the slowest pace in three years, raising the risk that business investment and hiring will cool.

Economic recovery in G7 countries remains fragile despite some improvement seen for the first half of the year, and North America and Europe are likely to rebound at different speeds, the Organization for Economic Co-operation and Development said Thursday. In its latest Interim Economic Assessment, the Paris-based think-tank projected 1.9 percent growth for G7 economies in both first and second quarters. The projection show strong variance in outcomes across the group.

Denting recovery hopes, Eurozone economic confidence dropped marginally in March as manufacturers and construction firms turned gloomy about future prospects. After improving in January and February, the economic sentiment index fell to 94.4 from an upwardly revised 94.5 a month ago, survey data from the European Commission revealed Thursday.

EUR/USD: The euro was trading lower against its major counterparts on Thursday, after data showed that U.S jobless claim declined to the lowest level in almost four years and ahead of Spain’s annual statement on Friday. The EUR/USD is likely to continue its decreasing trend to hover around the key level of 1.32000 as market sentiments remain weak and concerns over Spain weighed on the Euro. Investors should keep an eye on the CPI data in the Eurozone and Core PCE Price Index, Personal Spending, Michigan Consumer Sentiment Index and Chicago PMI in the U.S. Investors should be very cautious as volatility is expected on the pair. The resistance level is at 1.33443 and the support level is at 1.31922. Investors should monitor the fundamentals news and political news in the Eurozone and U.S to get to have an indication which direction the pair will go.

USD/JPY: The U.S. dollar fell to a four-day low against the yen on Thursday, as Japanese companies continued to repatriate overseas earnings before the end of the country’s fiscal year on March 31 and after better-than-expected Japanese retail sales data. The USD/JPY is most likely to fell to hover around the key level of 82.000 as the Yen strengthen due to the fiscal year end this week and investors are in taking position on safe haven. However, we might see some market corrections intra trade. Investors keep an eye on the fundamental news which will be released in the U.S later on the American session. Where, positive news might help the pair to recoup the losses registered. The resistance level is at 83.375 and the support level is at 81.440. Investors should remain prudent on the pair.

Oil (WTI): Crude oil futures tumbled on Thursday, after France said governments are moving closer to an agreement on a release of oil from emergency stockpiles, while lingering fears over the health of the global economy prompted investors to shun riskier assets. The price of oil is likely to continue its decreasing trend to test the support level of $104.173 a barrel, but investors should remain carefully as market corrections are expected intra trade. Investors stay focus ahead to the meeting of euro zone finance ministers, amid expectations that they would agree on a larger debt firewall to combat the debt crisis in the region and ahead of the fundamental news which will be released in the U.S later today. The resistance level is at $106.972 a barrel.

DAX: European stock markets fell on Thursday, as global growth concerns continued to weigh on sentiment while investors focused on Friday’s key meeting of euro zone finance ministers to reach an agreement on the size of the bailout fund for indebted countries. DAX is likely to continue is falling trend to test the support level of 6820.69 as market sentiment remain weak following Standard & Poor’s comments that Greece may need to restructure its debt again and on concerns over Spain weighed ahead of the government budget. Investors should focus on the political news and fundamental news that will be released later today, as these news will for sure have an impact on the index. Prudence is recommended.

Good luck in trading…