High Expectations for a Liquefy Trading Week – Daily Market Analysis
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US ISM Report For November Due Out Today
The Institute for Supply Management`s factory index report is set to be released on Monday 2 December 2013, detailing the figures for the month of November. At this time, many experts believe that there may be a slight drop in the rate of progress of US manufacturing over the period covered in the report.
Analysts note that the ISM report is a useful indicator for growth in the US economy. Having returned to a positive direction earlier this year, the figures in this study advanced steadily along with the addition of jobs to the workforce. The demand for manufacturing it should be pointed out is also correlated to the demand for goods in the market, which in itself is also connected to the rate of employment growth since consumer demand and economic growth is tied to the public?s feeling that their jobs are secure enough that they can afford to make purchases. As consumer spending comprises nearly two thirds of the American economy, the rates of manufacturing and buying are essential to the health of the US economy.
Analysts note that the jobs numbers were down during the month of September 2013, along with a government shutdown that was brought on by the standoff between the White House and the Republican opposition over the implementation of the Affordable Care Act, also known as Obamacare. As such, the economy was stunted and was forced to struggle with this obstacle.
Analysts believe that the US economy will show signs of recovery from this setback and with the Christmas shopping period that has begun following the Thanksgiving holiday help reverse some of the earlier losses, helping to mitigate any negative effects felt by the lower production numbers. Moreover, the more recent job numbers have shown improved growth, indicating that the economy is enjoying a rebound that will sustain the USD in its trading.
Aussie Reserve Bank Rate Decision to be Announced Tuesday
Australia`s central bank is due to issue its Rate Decision for this month on 3 December 2013. At this time, many experts do not believe that the Reserve Bank is inclined to make any adjustments to the current rate as it stands.
Readers are reminded that the interest rate decision by the central bank can have a significant effect on the nation?s currency and economy in that it influences borrowing and spending activities through providing investors either positive or negative incentives to put their money out into the economy.
Analysts note that the Aussie has struggled in trading recently, with a near 12 week low against the USD. Moreover, the government has had little success in increasing the job figures in recent months or in meeting their inflationary goals. That said, there are signs that China, Australia?s largest trading partner, is enjoying increased growth which may help to benefit the Aussies.
Investors are advised to continue to proceed with caution in their trading with the Aussie as it is likely to remain low against its rivals in the coming days and weeks.
WTI Gains on Chinese Growth
It was reported on 2 December that the West Texas Intermediate energy market had enjoyed its second day of gains, following a long series of losses in recent weeks. The stated growth follows news that China`s manufacturing sector exhibited unexpected advances during the previous month of November, boosting their demand for oil.
Analysts note that China is one of the largest manufacturers in the global market and as such is a significant importer of energy. Moreover, as the Chinese economy has grown, it has increased its demand for fuels such as gasoline as more consumers become financially capable of purchasing vehicles.
Helping to push up the prices at the WTI are reports that the Organization of Petroleum Exporting Countries (OPEC) had decreased their levels of output, lowering the supply in the market. As the levels of supply fall while demand stays constant or rises, observers can expect to see an increase in the price of fuels, including crude.
Analysts note that while the WTI is enjoying this current boost, reports continue to indicate that the US, the world?s largest energy importer, still has higher than expected energy stockpiles in its reserves. As such, it may help to depress prices again in the near future.