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Option Banque Daily Technical Analysis: 28-Aug-2015


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  • Asian shares extended a global rally on Friday after upbeat U.S. economic data calmed sentiment, with Chinese stocks jumping for the second day following a rocky start to the week. U.S. stocks rose sharply on the GDP data, a day after posting their biggest one-day gain in four years. Prices for U.S. government debt fell, while the dollar firmed against a basket of currencies. Gross domestic product expanded at a 3.7 percent annual pace instead of the 2.3 percent rate reported last month, the Commerce Department said on Thursday in its second GDP estimate for the April-June period. The GDP report, which was released in the wake of a global stock market sell-off, should assure investors and cautious Fed officials that the United States is in good shape to weather the growing strains in the world economy. Underscoring the solid economic fundamentals, a measure of private domestic demand that excludes trade, inventories and government expenditures rose at a 3.3 percent rate in the second quarter, instead of the previously reported 2.5 percent pace. Consumer spending, which accounts for more than two-thirds of U.S. economic activity, grew at a 3.1 percent rate, rather than the 2.9 percent pace reported last month. Consumer spending got off a to brisk start in the third quarter, with retail sales rising solidly in July.
  • Crude oil prices jumped in Asia on Friday as investors saw signs of a more upbeat picture for Japan’s economy and stabilization in China’s stock market. In Japan, July national CPI was flat, a better showing than the 0.2% drop seen, while the unemployment rate fell to 3.3% from 3.4%. But household spending eased 0.2%, well below the 1.3% gain expected. Just after those data sets, Japan reported July preliminary retail sales data showed a gain of 1.6%, better than the 1.1% rise seen. Investors now looked ahead to the Federal Reserve’s annual meeting of top central bankers and economists in Jackson Hole, Wyoming, due to begin later Thursday. While Fed chair Janet Yellen is not expected to attend, Fed Governor Stanley Fischer is scheduled to participate in a panel discussion about U.S. inflation developments on Saturday. His comments will be closely watched for further hints regarding the strength of the economy and on the timing of a Fed rate hike. Overnight, crude oil futures rallied sharply on Thursday, as appetite for riskier assets improved amid a global stock market rally.
  • Gold futures fell to the lowest levels of the session on Thursday, after data showed that the U.S. economy grew more than initially estimated in the second quarter, boosting optimism over the health of the economy and supporting the case for a U.S. interest rate hike this year. U.S. Department of Labor said the number of individuals filing for initial jobless benefits declined by 6,000 last week to 271,000. Analysts had expected initial jobless claims to fall by 3,000 to 274,000 last week. First-time jobless claims have held below the 300,000-level for 25 consecutive weeks, which is usually associated with a firming labor market. The upbeat data should strengthen expectations of a Federal Reserve interest rate hike as early as next month. The timing of a Fed rate hike has been a constant source of debate in the markets in recent months. Some traders believe the U.S. central bank could postpone raising interest rates until December as officials are likely to remain concerned over global growth and inflation pressures due to China’s shock currency devaluation move and weak commodity prices.
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