Market activity is extremely low…Brief review of the market. by OpenForex.com

Market activity is extremely low…Brief review of the market.

06:35 06/01/2004

Market activity is extremely low…Brief review of the market. Brief review of the market. Market activity was rather low yesterday due to holidays in the U.S., Britain and Switzerland. This week, market attention will be fixed on the OPEC meeting due Thursday and the release of employment rate data on the U.S. due Friday. U.S. labor market situation is one of the major factors for the markets this week and it will be the determining one for investors in terms of the presupposed FRS rate hike. At present, discount rate in the U.S. equals 1 percent per annum, which is minimal for over 40 years. Prior to U.S. Labor market release, we are expecting the meetings of two Central Banks – of Australia and Eurozone. Analysts assume that Reserve Bank of Australia and European Central Bank are not panning to change their monetary policy. Friday published economic news was of mixed nature. Michigan sentiments index dropped to 90.2 in May compared to 94.2 in April and came out lower that the average analytical forecast, which put a negative impact on American currency. However, news about powerful growth of production activity in Chicago and its region, positive data on consumer income and spending and consumer inflation supported the rate of the dollar. The U.S. Department of Trade reported that personal income of Americans rose 0.6% in April compared to March, personal spending rose 0.3% after having grown 0.5% in March. Income and spending report showed that consumer inflation was of moderate nature in April. Price index of basic consumer spending rose 0.1% in April compared to March, when it rose 0.2%. Compared to the previous year’s April, price index of base consumer spending rose 1.4%. Chicago PMI rose to 68.0 in May compared to 63.9 in April. The given value of the index showed that business activity significantly speeded up in May compared to April in the production sector of Chicago and its region. April index was significantly higher than March one and economists expected that index would fall a bit in May. The average forecast assumed that index would drop to 61.0 in May. Chicago PMI index component, reflecting the volume of production, rose from 64.8 in April to 71.1 in May, pointing at strong acceleration of the given indicator. Index component, reflecting new orders, rose from 65.1 to 74.4. Component, reflecting the volume of non-fulfilled orders, dropped from 57.5 to 56.9. Component, reflecting prices paid by production companies of Chicago and its region for raw materials and components, rose from 76.1 to 80.0. Component, reflecting employment rate in Chicago and its region, rose from 50.9 in April to 54.8 in May. ISTAT statistical services informed that in Italy, producer prices rose 0.5% in April compared to the previous month and 1.7% compared to the previous year. Analysts looked for producer prices to rise 0.4% in average in April. According to specified data, producer prices rose 0.9% in March compared to the previous month and 0.7% compared to the previous year.

The forecast was created by trans1.