The Dollar strengthened yesterday afternoon as durable goods orders jumped 0.8% month-on-month in April. It’s mainly due to strong demand for military equipment. Sales of defence aircraft and parts rising by 13% other transport equipment sales gained 2.3%.
U.S. consumer confidence also rose in May as consumers saw the economy in a more positive light, the index of consumer attitudes rose to 83 in May from a downwardly revised 81.7 in April. Economists had expected a reading of 83.0.
The U.S. services sector expanded in May at its fastest rate since March 2012 as employment creation accelerated. PMI Index hit 58.4 in May compared with April's final reading of 55.0.
May's services PMI survey is a further signal that the US economy has regained momentum through the second quarter of the year. With new business growth for the services sector was at its fastest since February 2011.
As a result of all this positive news from the US the dollar gained against most of its major trading partners.
Yesterday, ECB President Mario Draghi spoke and has reinforced expectations that the European Central Bank will cut interest rates or look to implement a bond-buying program next month after admitting that "pre-emptive action" may be needed to head off deflation.
Currently inflation is sitting well below the ECB’s 2% target and action is needed to be taken to try to bring inflation up to more normal levels.
South Africa’s Economy has contracted for the first time in five years after on-going strikes in Platinum mines continue to hinder their economy.
GDP shrank by 0.6% in the first quarter of 2014. The main reason being a 24.6% decline in mining and quarrying. Workers are still locked in a deadlock with their employers over pay and conditions and currently there appears to be no end in sight.
This industrial dispute has been a large reason for Rand weakness over the last 12 months.
We have just had German unemployment come in unchanged at 6.7% in May. At 10am we have European Business confidence and index of economic Sentiment both expected to be slightly more positive.
10:00 - EUR - Business Confidence index (May) expected to be higher form -.8.6 to -7.1
10:00 - EUR - Economic Sentiment Indicator (May) expected to be higher at 102.2 from 102 in April
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Daily Market Report - 28/05/2014