On Friday data on US Income and US Spending in August was in line with expectations, i.e. better than the previous one. Meanwhile, data on July was revised upwardly. US Consumer Sentiment in September in the final estimate was 77.5 vs. 78.2. On Friday, S&P 500 fell 0.39% and the news agencies connect this event with the figures of index rather than with fears about failure of budget discussions. However, today’s market opening gives objective picture of the current events.
In the medium term we continue to expect the drop of the euro. In the current circumstances the US dollar will strengthen; in the first case (the national debt threshold will be raised) the US Treasury will place aggressively bonds and there will a great demand on the US dollars as it was observed in February-March 2013; in the second case serious situation will force the investors to move out of risk, then there will be crisis correlation with the stock market. The investors have to wait till the moment for selling is appropriate.
This week relatively strong data on Europe and the US should be published. On Friday, data on Nonfarm Payrolls in September is issued; forecast 175K vs. 169K in August.
Today at 10:00 UTC+4 data on Retail Sales in Germany in August; forecast 0.9% vs. -1.4% in July. It will be the cause to close the morning’s gap. At 17:45 UTC+4 Chicago Purchasing Managers Index in September, forecast 54.5 vs. 53.0 in August.
From the technical point of view, we expect close of the gap at the level of 1.3537, 1.3564, or 1.3580. If the optimism is increased, the growth to the area of resistance on the daily chart 1.3618 is possible, where there will the Friday’s key event.
