Daily Market Report 03/02/2012
The lack of a solution from the Greek debt negotiations has been adding to the caution as we are approaching the end of the week. Despite the ongoing delays, investors are surprisingly still patiently waiting for final agreements on the Greek debt swap and second Greek bailout. Any clear resolution here is likely to spark the next round of volatility. European shares fell slightly today from six month closing highs as investors are waiting the key US jobs data for indication of the strength of the recovery in the world’s biggest economy. This morning the FTSE 100 is in bounce mode. At the time of writing the UK blue chip index is trading up at 5789 eradicating its losses from the open.
Euro gains stalled out towards the end of the week with the EUR/USD remaining the key market to watch for broader sentiment in the currency markets. At 1.3146 this morning a break close above 1.32 will open the door for the next upside extension by 1.3350, while a close back under 1.30 could suggest a bearish resumption. After losing 65 pips on Thursday GBP/USD is heading up again. At 1.5819 at the time of writing the cable sees support at 1.5642, Monday’s low, and resistance at 1.5876, Wednesday’s high.
Gold is flat this morning at 1757 having seen decent gains in the past few days and is now on course for a fifth straight week of gains, as investors are waiting the key US labour market report. The precious metal is around 12% up this year with the bulls hoping that September’s highs are now in reach. Oil is getting driven on a headline by headline basis coming out of Middle East, with Brent crude holding above $112 in early trade on worries of an Israeli attack to Iran and ahead of the US jobs data.
Domestic data releases from the UK come in the form of CIPS/PMI Services Index put out at 9.30 GMT .Today’s calendar is highlightened by the US Non-Farm Payroll released at 13.30 GMT. Employment in the world’s largest economy is expected to increase another 145K in January and the ongoing improvement in the US labour market may prop up the greenback reducing the scope for further quantitative easing.