Weekly Market Analysis

By Samir Al Khoury,

The most important events of the past week

United States of America

• The Manufacturing Purchasing Managers’ Index declined, recording a growth of 51.9 points, which is lower than expectations (52.5) and the previous reading (52.2).

• The construction spending index declined on a monthly basis, recording a contraction of 0.3%, which is lower than expectations (0.7%) and the previous reading (-0.2%).

• The Manufacturing Purchasing Managers’ Index issued by the Institute for Supply Management (ISM) rose, recording a growth of 50.3 points, which exceeded expectations (48.5) and the previous reading (47.8).

• The factory orders index rose on a monthly basis, recording a growth of 1.4%, which exceeded expectations (1.1%) and the previous reading (-3.8%).

• The job opportunities index recorded 8.756 million, which is lower than expectations (8.760M) but higher than the previous reading (8.748M).

• The index of change in non-agricultural private sector jobs issued by ADP rose, recording 184K new jobs, which is a percentage that exceeded expectations (148K) and the previous reading (155K).

• The services PMI recorded a growth of 51.7 points, which is in line with expectations but lower than the previous reading (52.3).

• The non-manufacturing purchasing managers index issued by the Institute for Supply Management (ISM) declined, registering a growth of 51.4 points, which is lower than expectations (52.8) and the previous reading (52.6).

• US crude oil inventories rose by 3.210 million barrels, which exceeded expectations (-0.300M) and the previous reading (3.165M).

• The initial jobless claims index rose to 221K, which exceeded expectations (213K) and the previous reading (212K).

• The Non-Farm Payroll Report (NFP) index rose, recording 303K new jobs, a percentage that exceeded expectations (212K) and the previous reading (270K).

• The unemployment rate declined, recording 3.8%, which is lower than expectations and the previous reading (3.9%).

• The average hourly wage index recorded 4.1%, which is in line with expectations but lower than the previous reading (4.3%).

Eurozone

• The headline consumer price index declined year-on-year, recording 2.4%, which is lower than expectations (2.5%) and the previous reading (2.6%). The core consumer price index (which excludes food and energy) also declined on an annual basis by 2.9%, which is lower than expectations (3.0%) and the previous reading (3.1%).

• The Manufacturing Purchasing Managers’ Index recorded a contraction of 46.1 points, which was higher than expectations (45.7) but lower than the previous reading (46.5).

• The Services Purchasing Managers’ Index rose, recording a growth of 51.5 points, which exceeded expectations (51.1) and the previous reading (50.2).

• The retail sales index declined on a monthly basis, recording a contraction of 0.5%, which is lower than expectations (-0.3%) and the previous reading (0.0%).

United Kingdom

• The Manufacturing Purchasing Managers’ Index rose, registering a growth of 50.3 points, which exceeded expectations (49.9) and the previous reading (47.5).

• The Services Purchasing Managers’ Index declined, recording a growth of 53.1 points, which is lower than expectations (53.4) and the previous reading (53.8).

• The Construction Purchasing Managers’ Index rose, registering a growth of 50.2 points, a rate that exceeded expectations (49.8) and the previous reading (49.7).

Australia

• The Manufacturing Purchasing Managers’ Index recorded a contraction of 47.3 points, which was higher than expectations (46.8) but lower than the previous reading (47.8).

• The Services Purchasing Managers’ Index rose, recording a growth of 54.4 points, which exceeded expectations (53.5) and the previous reading (53.1).

Switzerland

• The Consumer Price Index declined on an annual basis, recording 1.0%, which is lower than expectations (1.3%) and the previous reading (1.2%).

Canada

• The rate of change in employment declined to -2.2K, which is lower than expectations (25.9K) and the previous reading (40.7K).

• The unemployment rate rose to 6.1%, which exceeded expectations (5.9%) and the previous reading (5.8%).

China

• The Caixin Manufacturing Purchasing Managers’ Index rose, registering a growth of 51.1 points, which exceeded expectations (51.0) and the previous reading (50.9).

• The Caixin Services PMI recorded a growth of 52.7 points, which was in line with expectations but lower than the previous reading (52.5).

• Foreign exchange reserves increased, recording 3.246 trillion US dollars, a rate that exceeded expectations (3.210T) and the previous reading (3.226T).

Japan

• The Manufacturing Purchasing Managers’ Index recorded a contraction of 48.2 points, which is in line with expectations but lower than the previous reading (47.2).

• The Services Purchasing Managers’ Index declined, recording a growth of 54.1 points, which is lower than expectations (54.9) and the previous reading (52.9).

The most important events of this week

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

• On Wednesday, the markets await the interest decision issued by the Central Bank of New Zealand, amid expectations that it will keep interest rates unchanged at the level of 5.50%. The markets are also awaiting the interest decision issued by the Bank of Canada, amid expectations that it will keep interest rates unchanged at the level of 5.00%. The building permits index in Canada, the consumer price indexes, and the US crude oil inventories in the United States of America are issued, in addition to the minutes of the Federal Open Market Committee meeting.

• Regarding Thursday, the markets are awaiting the interest decision issued by the European Central Bank, amid expectations that it will keep interest rates unchanged at the level of 4.50%. Attention is turning to the speech and tone of European Central Bank President Christine Lagarde regarding the interest rate path in the next stage. It issues consumer and producer price indices, new loans in China, building permits in Australia, producer price indices, and initial jobless claims in the United States of America.

• Finally, on Friday, the indices of exports and imports in China and industrial production in Japan, the indices of gross domestic product and industrial production in Britain, in addition to the Michigan Consumer Confidence Index in the United States of America will be released.

Technical Analysis:

EUR/USD: 

If the euro against the dollar breaks the pivot point of 1.0811, it may potentially target and test the support levels of 1.0747, 1.0659, and 1.0595. Conversely, if it surpasses the pivot point, it is likely to test resistance levels of 1.0900, 1.0963, and 1.1051.

GBP/USD: 

If the pound against the dollar breaks the pivot point of 1.2619, it has the potential to test the support levels of 1.2555, 1.2474, and 1.2411. However, if it exceeds the pivot point, it may test resistance levels of 1.2700, 1.2763, and 1.2843.

USD/JPY: 

If the pivot point of 151.44 is broken for the dollar against the yen, there is a possibility that it will target the support levels 150.95, 150.30, and 149.81. But if it exceeds the pivot point, it is likely to target the resistance levels 152.09, 152.59, and 153.23.

 GOLD: 

If the pivot point of 2314 is broken for gold, there is a possibility that it will target the support levels 2279, 2213, and 2178. But if it exceeds the pivot point, it is likely to target the resistance levels 2380, 2415, and 2481.

BRENT CRUDE OIL:

If the pivot point of 89.83 for crude oil is broken, there is a possibility that it will target the support levels of 87.75, 84.33 and 82.25. If it exceeds the pivot point, it is likely to target the resistance levels 93.25, 95.33, and 98.75.

US30:

If the pivot point of 39,481 for the Dow is broken, there is a possibility that it will target the support levels 38,605, 37,987 and 37,111. If it exceeds the pivot point, it is likely to target the resistance levels 40,099, 40,975, and 41,593.

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

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