A series of weak economic indicators released in the last 24 hours fueled speculation that central banks around the world will intervene in their respective economies to boost growth. Speculation on central banks intervening generally causes stocks to rise and this morning in Asian trading was no different. Asian stocks rose for the fifth day in succession, the longest rising run since March of this year with Hong Kong’s Hang Seng Index was up 1.46% after a national holiday yesterday, Australia’s S&P/ASX200 was up 0.07% ahead of an interest rate decision this morning, whilst Japan’s Nikkei 225 Index was up 0.67%.
In the US, manufacturing surprisingly contracted in June for the first time since the economy emerged from a recession three years ago as the Institute for Supply Management reported that its index of manufacturing activity dropped to 49.7 in June from 53.5 in May and new orders plummeted to 47.8 from 60.1- the largest decline since October 2001. The measures of orders, production and export demand was at its lowest since July 2009 and well below the 52.0 forecast.
The USD had a mixed Asian trading session against most major currencies, don 0.14% against the Euro but up 0,25% against the Japanese Yen. The dollar was down against its cousins in Canada, Australia and New Zealand, with USD/CAD down 0.07% 1.0164, AUD/USD up 0.20% at 1.0269 and NZD/USD up 0.19% at 0.8052. A normal side effect of Fed Reserve intervention is that as stocks go up, the dollar declines, but the dollar’s decline was limited overnight due to the safe haven nature of the currency. Commodity markets enjoyed bit of a bounce, with investors snapping up nicely priced positions in Gold – up 0.36% and Silver – up 0.99%.
European stocks and indices point towards a higher opening today and with a national holiday in the US tomorrow; in a quiet economic calendar today, the highlight for binary option trades looking to trade the news, is the official U.S. manufacturing data released later today.
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