Summary
Despite excellent earnings after the bell on Tuesday evening by Intel, the equity markets had a difficult time shrugging off worse than expected economic data. The S&P 500 index was unchanged an close at 1095. The VIX, which measures investor’s fears by calculating the price of ATM S&P 500 options, broke an 8-day losing, and bounced off the 50- day moving average. With volatility very low, investors should be leery of a quick reversal.
Tomorrow's Events
JPY
BOJ Interest Rate Decision
.1%
AUD
1:00
Consumer Inflation Expectations
July
3.4%
EUR
8:00
ECB Monthly Report
USD
12:30
US Jobless Claims
450K
454K
US PPI
June
-.2%
-.3%
13:15
US Industrial Production
0
1.2%
14:00
Philly Fed
11.4
8
Trading Opportunities
GBP/USD
The UK labor market is showing signs of recovery. The claimant count fell almost 21 thousand, the fifth month in a row and the 7th of the past 8 months that the claimant count has fallen. There were also downward revisions to recent month’s claimant counts as well. The unemployment rate slipped to 4.5% from 4.6%, which is a 15 month low. The ILO’s measure is thought to be more accurate and it shows UK unemployment rate easing to 7.8% from 7.9%.
AUD/USD
The Australian dollar paused, and is likely ready to refresh its rally. Better than expected employment data last week has driven the Aussie dollar above 88 cents and it is testing the .8850 high made in early June. Westpac consumer confidence increase by 11%, which was greater than analyst had expected. The market awaits new vehicle sales which will be released at 130 GMT. A robust number is the catalyst needed to push the AUD higher.