Yesterday comprehensive data on U.S. industrial production was released. Production at U.S. factories climbed more than forecast in December. Capacity utilization inched up to 78.8 percent in December vs. forecast for 78.6% from an upwardly revised 78.7 percent in the previous month. Industrial output rose 0.3% against forecast for 0.2%.
Information about Boeing 787 Dreamliner emergency lending in Japan influenced markets. Earlier it was reported about a fire broke out in one of planes of this company in Boston. Boeing shares dropped 3.2%. Its weakness weighs on Dow Jones Industrial Average. The situation was balanced by Goldman Sachs Group Inc. (GS), as it added 4.1% after the bank’s profit almost tripled. As a result, the Dow Jones Industrial Average declined 0.18% and the euro, 15 basis points. Federal Aviation Administration on Wednesday grounded all Boeing 787 planes operated by U.S. carriers until the aircrafts are proven to be safe to fly.
U.S. data published today is also of great importance. At 17:30 GMT+4 Unemployment Claims and Building permits and Housing starts for December are to be released. The number of Initial Jobless Claims is expected to be 369К against 371К; Housing Starts is forecast to rise from 860,000 to 890,000 in November; Building Permits is expected to edge up from 900,000 to 910,000 in November. At 19:00 GMT+4 Philadelphia Fed index is to be 7.1 versus 8.1 in December.
If the data is weaker than it is forecast, probably investors start work out data on China GDP published tomorrow (06:00 GMT+4). The National Bureau of Statistics may report that gross domestic product expanded 7.8% in the fourth quarter from a year earlier. That is up from a three-year low of 7.4% in the third quarter.
In the near term we expect the market will have bullish outlook. However, the most relevant issue is fiscal one. Due to fiscal cliff uncertainty, the outlook is bearish in the medium term.
If today’s data is no less that it is expected, on the H4 the growth to the support line is probable to the level of 1.3350. If news from China is not disappointing, the rise may continue to 1.3390 – 1.34000. In the long term we expect the decrease to the levels on the H4, 1.3230 and to 1.3030 in the short term.
If U.S. data is weak, the target at 1.3230 may be reached today.
