Summary
The equity markets, commodity prices and gold prices rallied as investors moved into stocks on robust retail sales news. Retailers advanced as the International Council of Shopping Centers said sales were growing at the fastest pace since 2006, easing concern that consumer spending would slump given the state of consumer confidence. Banks and financial institutions led the rally as State Street Corp. reported a profit that was better than expected. Additionally, European banks rallied as reports that the European stress tests may assume a 17 percent loss on Greek bonds, half of the worst-case scenario. The S&P 500 Index rallied 32 points to settle at 1060.
Tomorrow's Events
AUD
1:30
Australia Employment
June
15.3
26.9
CHF
5:45
Swiss Employment Rate
4%
GBP
8:30
UK Industrial Production
May
.4%
-.4%
EUR
10:00
German Industrial Production
.8%
.9%
11:00
BOE Interest Rate Decision
.5%
11:45
ECB Interest Rate Decision
1%
USD
12:30
US Jobless Claims
July
461
472
Trading Opportunities
EUR/USD
European economic data was on the disappointing side, which did not seem to halt the rise in the Euro. German manufacturing orders fell by nearly as much as they were expected to rise. The 0.5% decline in May manufacturing orders contrasts with expectations of a 0.3-0.5% rise. The April series was revised higher to 3.2% from 2.8%. While it may be best to consider the two months of data for this volatile series, the breakdown does play on the theme of economic weakness in Europe. Non-EMU orders rose 1.8%, (+6% in April), while EMU orders fell 3.3% (-0.1% in April). When a currency rises on negative news, investors do not want to speculate against it. With the 20-day moving average about to cross the 50-day moving average, the EUR/USD looks robust.
USD/JPY
Oil prices rose significantly as a strong heat wave in the US pushed prices of natural gas and oil higher. WTI crude oil rallied more than $2 dollars a barrel and will likely test the 50-day moving average. A strong move in the US equity markets, driven by the financial sector also helped propel the oil markets.