Summary
Equity markets declined on a combination of worse than expected economic news released in the US. The Beige Book Report, released by the Federal Reserve, showed that the US economy is sluggish and slow steady growth is expected. The S&P 500 Index declined by 7 points to 1106.
Tomorrow's Events
AUD
1:00
Australia New Home Sales
June
-6.4%
GBP
6:00
UK Housing Price Index
July
-.3%
.1%
EUR
9:00
EMU Economic Confidence
99.1
98.7
CAD
12:30
Canada Production Prices
.5%
.3%
USD
US Jobless Claims
460K
464K
JPY
23:30
Japan CPI
-1.6%
Trading Opportunities
AUD/USD
The Australian dollar declined on a weaker than expected CPI, which lead investors to believe that the Reserve Bank of Australia could be on hold with regard to interest rates for a while. CPI increased by .6% in the second quarter of 2010, compared to the .9% which was expected by economists. The Australian dollar has increased rapidly, and is probably due for a pull back to support levels near the 100-day moving average. This level, should give investors an opportunity to buy into the currency pair, looking for upside to 93 cents.
OIL
A worse than expected energy inventory number pushed oil prices lower for the trading session. According to the Department of Energy, Crude oil inventories rose by 7.3 million barrels, compared to an expected decrease of 1.4 million barrels. Demand increased slightly on a year over year basis, which kept oil from slipping more than 75 cents per barrel. WTI will likely decline to support levels near 75 (short term trend line support), which looks like a solid buying level for upside to 81.