Morning Report: 08.00 London
• This morning the UK pound is in demand once again ahead of more PMI data. In recent days the morning push ahead of the data release has been a good way to front run the actual numbers. Will the speculators be right again this time? The GBP/USD is up 0.27% with the GBP/JPY up 0.4%.
• The Swiss franc is weaker after its trade balance numbers came in below estimates.
• The Australia dollar is the morning's strongest mover after building approvals and trade balance came in well above estimates. The recent cyclone hitting Queensland is also thought to have caused less damage than it could have done.
Coming up today:
• We've a busy economic calendar ahead today starting with UK services PMI. Recently both construction and manufacturing PMI have come in above estimates. It's worth being aware that service PMI undershot estimates in of the last 12 months. Analysts are predicting a rise to 51.2 signalling growth.
• At 12.45 we have the European interest rate released, but this won't cause as much reaction as the ECB press conference that follows at 13.30.
• US unemployment claims follow at 13.30 with a drop to 420K on the cards. Preliminary productivity figures and unit labour costs are released around the same time.
• At 15.00 we have US ISM Non Manufacturing PMI with a slight rise to 57.2 on the cards.
• Finally Fed chairman Ben Bernanke is speaking at 18.00.
• It's a bank holiday in China in celebration of the New Chinese year.
Trade Idea: Gold
• Traders have fallen out of love with gold of late. Even the unrest in Egypt has failed to spark interest in the precious metal as a safe haven play. Gold is down 6% year to date.
• Interest from speculative trades is low while public interest as measured by Google trends is also below recent averages. These have often been a reasonable contrarian indicator for Gold so it may now be a good time for an upside bet on the precious metal.
A bet idea might be to predict that gold will close higher than $1347.50 in 7 days time (Feb 10th) for a potential return of 235%.
Summary:
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