Europe
Germany’s CPI came out better than expected at 0.9%
Americas
Consumer confidence improved at a rate of 52.9
House prices increase 0.4%
Daily Market Review Dec 30, 09
It was another quiet session on Wall Street as the major indices bounced back and forth across their opening mark. As mentioned in previous reports, market activity is expected to be minimal this week, due to the holiday season.
Economic data had a minor affect on the intraday session, as the U.S released its home price index and CB consumer confidence. According to yesterday’s report, house prices increased yet again for the fifth month in a row. The closely watched S&P/CaseShiller home-price index increased 0.4 percent from the previous month on a seasonally adjusted basis, bringing the annualized drop in house prices to 7.3 percent, the smallest year over year decline in 12 months. Even though the numbers came out as expected and hinted towards a recuperating housing market, one must note that the recent bounce-back has been attributed to tax benefits supplied by the government.
Consumer confidence also surprised rising to 52.90, compared to November’s result of 50.6. The number pointed towards optimism among consumers, despite a lower than expected reading of 53.00 points.
From a technical point of view, the S&P500 finished yesterday’s session in red, the first negative session out of the last six. Energy was the lagging sector of the day, closing with a loss of -0.66%. Consumer Discretionary helped to balance out the session and finished with a 0.33% gain.
Forex
On the Forex market, the Dollar traded steady against its counterparts, with the index finishing the session around 77.9 points. Even though most of the individual pairs presented a lackluster session, the Dollar index dropped to approximately -0.5%, before finishing with a 0.3% gain.
The EUR/USD lost some strength during the session coming down to prior lows. Dollar strength was characterized during the session despite a better than expected CPI figure from Germany. Preliminary government data released showed that German consumer prices rose at a monthly pace of 0.9% in December, for a gain of 0.8% compared to the same month last year.
Moving on to other pairs, the USD/CAD took the spot light Tuesday, after presenting a possible reversal pattern. Even though no news came out from the Canadian side, the fundamental data from the U.S was enough to push this pair higher, allowing the pair to bounce off of trend line support. The USD/CAD formed a hammer candlestick yesterday around support, which led to higher levels during Asian hours. Considering the Dollar continues to gain strength the upper trend line could act as a target level.
The Day Ahead
Looking forward, the U.S will take the stage today releasing its Chicago PMI and crude inventory numbers. Economists are expecting a mild decrease to 55.20 from 56.1, while crude numbers should drop by 2 million barrels.
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