Daily Market Outlook

Currencies

• EUR/USD rose up and down on good economic news on both sides of the Atlantic. With positive news from Germany, where the RWI economic institute raised it projection for growth, coupled with a strong bond auction of EFSF paper. The euro opened the day at 1.3224 and moved to a high of 1.3285 but settled in at a drop to 1.3191 after the housing report in the US although it was below forecast, it had a positive lining.
  • The European, French, and German Manufacturing Purchasing Managers’ Index (PMI) measure the activity level of purchasing managers in the manufacturing sector. A reading above 50 indicates expansion in the sector; below indicates contraction. Traders watch these surveys closely as purchasing managers usually have early access to data about their company’s performance, which can be a leading indicator of overall economic performance.

• USD/CAD is ranging around 0.9925 in mid-day trading. The USD has picked up momentum against all of its trading major currencies. Optimism of the economy was the theme of the day as Tim Geithner and Ben Bernanke testified in front of US Lawmakers.
  • While the reduction in debt crisis in Europe is a welcome development, more needs to be done to fully resolve the crisis, according to U.S. central banker Ben Bernanke. Treasury chief Tim Geithner’s also to deliver congressional testimony. The testimony gave an extra push to the USD. Both men have given optimism in the market and that made USD stronger versus its major traded currencies and the US economy on the whole.

Commodities

• Oil fell as much as 0.9 % after France said that industrialized nations are considering releasing strategic crude stockpiles to counter rising prices. Crude prices have advanced this year on concern sanctions aimed at halting Iran’s nuclear program will disrupt oil exports.
  • Brent oil fell 0.4 % to $123.69 a barrel while U.S. Crude futures eased 0.7 % to $106.52 a barrel. Copper was hit by concerns about weak demand from China, falling 0.9 % to $8,381.

• Gold earlier climbed alongside equities as China lowered reserve requirements for 379 branches of Agricultural Bank of China Ltd., the nation’s 3rd biggest lender by market value, expanding a trial that had cut requirements for 563 branches.
  • Gold may decline after a report showed that China’s manufacturing may contract for a 5th straight month in March, hurting the outlook for commodities.
  • Spot gold little changed at $1,649.82 an ounce at noon in Asian market, paring a 0.4 % advance. The preliminary 48.1 reading of the HSBC Holdings Plc and Markit Economics index today is a 4-month low, and compares with a final 49.6 in February

Equities

• Asian stocks rose after a preliminary survey showed China’s manufacturing (PMI) may contract for 5 months in a raw, tempering news of an unexpected trade surplus in Japan.
  • China’s manufacturing index(PMI) indicated a worse contraction this month (March), pushing need for Premier Wen Jiabao to add measures to sustain growth even as he prolongs a campaign to cool property prices. The preliminary 48.1 reading in a purchasing managers’ index from HSBC and Markit Economics today is the lowest since
    November 2011.
  • Japan’s Nikkei 225 Stock Average dropped 0.4 percent lower, swinging losses and profits.

• European stocks stocks index futures (SXXP) pointed to a lower open on Thursday, with shares set to retreat for the 4th straight session, after data showed China’s economic momentum slowed in March as factory activity shrank for a 5th month in a row.
  • The U.K.’s FTSE 100 index rose up +0.01% reaching the level of 5,892

• U.S stocks closed mostly lower Wednesday after a mixed report on existing-home sales showed a rocky but improving recovery in the depressed housing market and on concern the best 1rst-quarter since 1998 has outpaced economic prospects and as Baker Hughes Inc. drove a selloff in energy shares.
  • The Dow Jones declined 45.57 points, reaching the level of 13,124.62
  • S&P 500 has fallen 2.63 points, reaching the level of 1,402.89