Intraday Market Thoughts

MidEast Ceasefire, Onto China PMI, New Premium Insights

by Adam Button
Nov 21, 2012 23:06

MidEast Ceasefire, Onto China PMI, New Premium InsightsA ceasefire in the Israel-Palestine conflict along with better US economic data boosted sentiment in US trading. The pound was the best performer while the yen tumbled to fresh six month lows. The main release on the Asia-Pacific calendar is the China flash PMI. Latest Premium Insights Preview China PMI, Eurozone Flash PMIs with 2 charts on CADJPY and EURJPY. See more below.

Egypt brokered a ceasefire agreement between Israel and Hamas on Wednesday, raising hopes for a lasting peace. Market watchers are skeptical and the price of oil remained higher after a brief dip.

Overall risk sentiment was better as US traders headed out for the Thanksgiving holiday. Initial jobless claims fell to 410K which was in line with expectations. The prior week was skewed higher by Hurricane Sandy.

The Markit US manufacturing PMI also raised hopes as it climbed to 52.4 compared to the 51.0 consensus. One negative surprise was the final revision to the U of Michigan consumer sentiment survey, down to 82.7 from 84.9. It was still the best reading since the crisis.

The market is fixated on the yen as more skeptics become believers that the turn in the yen is finally here. That might be true but for the moment, yen crosses are beginning to look stretched. GBP/JPY has climbed for six straight days, gaining nearly 550 pips.

The key to sentiment in the day ahead is the HSBC China flash PMI. There is no consensus estimate but the prior reading was 49.5.

It remains unclear if Chinese growth has begun to accelerate once again. On Wednesday, a top executive at mining giant Vale warned that Chinese growth is slowing.

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