Tom Williams Daily Market Review -14.08.2013

Tom estimates the GBP to pose large liquidity and spikes following today’s announcements. See his review on the matter plus additional future observation, which he predicts for today’s market movement.


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US CPI Report to be Issued on Heels of Retail Growth

The Consumer Price Index for the US is due to be released tomorrow 15 August 2013. At this time, many experts believe that the dollar amount that Americans pay for a set standard package of goods will have risen from the previous months price. In addition to the general CPI report, the US will also issue a report detailing the CPI without taking food and fuel into account, two items that are considered to be more volatile and can throw off the averages for the study. Observers have predicted that this measure will also likely rise, if only slightly.

While the US CPI is expected to rise, it should be noted that Retail Sales in the US have been reported to have continued to grow. Despite the fact that the growth was lower than had previously been believed, this data points to a steady American recovery that many investors hope will encourage the Federal Reserve to cut stimulus activities.

In reaction, to yet another positive report on the US recovery, the Canadian dollar was reported to have taken a hit as traders feared a growing gap between the neighboring North American states.

Analysts advise traders to continue in their cautious trading on the USD and CAD, despite an apparent improvement in the US economy as a possible decision by the Fed on quantitative easing may cause volatility in the markets.

Euro Rebounds on Strong GDP Results

The Euro was reported on 14 August 2013 to have received a boost in value following the release of Gross Domestic Product reports for two of the Eurozones top economic leaders. France and Germany both posted higher than expected report cards for the GDP, beating out the predictions of many observers.

As such, the Eurozone and its currency are enjoying a reprieve that many are hoping is yet another report in what could lead to an improved recovery process for the countries in the monetary union.

While investors are advised to continue to proceed with caution on the Euro, analysts believe that it will likely continue to rise over the coming few days of trading against rival currencies.

Oil Prices Fall on Stockpile Report

Following a three day hot streak in the West Texas Intermediate, energy prices for crude and gasoline were reported on 14 August 2013 to have taken a significant drop. The fall in price comes in response to the industry published report by the American Petroleum Institute detailing the current US stockpiles which came in considerably higher than had previously been expected. While there was still a significant decrease in the level of supply, the addition of a large quantity of gasoline to the stockpiles may have a measurable effect on prices as Americans continue in the driving vacation months of summer.

Analysts note that continued difficulties in pumping and export capabilities in Libya are continuing to affect global oil prices. While some officials in the post-revolutionary country have expressed hope that more production facilities will resume operations in the near future, the country is still riddled with protests and violence.

Investors are advised extreme caution in trading oil based options in the near future as the industry and the markets react to this most recent report. Continued volatility should be expected over the short and medium terms.