Morning Report: 08.30 London
• Last night US stock markets including the Dow Jones (Wall Street) once again managed to push off the lows of the day, but the buying force wasn't strong enough for a positive finish.
• This morning the US dollar is weak ahead of a very busy economic calendar. The EUR/USD is the stand out mover, up 0.42%. The pound is making further gains with the GBP/USD up 0.25%.
• Gold is continuing to capitalise on the weakness in the dollar, holding above $1375.
Coming up today:
• The economic calendar is packed today with a number of UK and US announcements of note.
• UK claimant count change is first up, due at 09.30 along with the latest average earnings index. Jobless claims are expected to drop by -3.2k.
• After yesterday's CPI & RPI data, at 10.30 today we have the Bank of England inflation report with an accompanying speech from governor King. King is under considerable pressure with inflation persisting above targets levels.
• From 13.30 the economic calendar gets even busier with a number of releases from the US and Canada. Highlights include building permits and PPI followed by the release of the last FOMC minutes at 19.00.
Bet Idea: AUD/JPY
• In the last week, the Australian dollar and Japanese yen (AUD/JPY) have become closely aligned. There are some economic reasons for this, primarily the export of commodities and high tech goods to China. However, given that the current trading ranges are approaching levels not seen since Christmas, the current stalemate is unlikely to be sustainable.
A good way to play this might be an In/Out trade predicting that AUD/JPY will close outside of 84.25 or 82.75 in 2 days time (Friday 18th). If successful, this could return 176%.
Summary:
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