According to the latest Federal Reserve Federal Open Market Committee Meeting Minutes, majority of the FOMC participants were “broadly comfortable†with the tapering of the asset purchases “later this year.†The minutes also noted that domestic economic activity has progressed at a moderate pace during the first half of 2013, labor conditions improved, while jobless rate continues at an elevated pace.
US Unemployment Claims grew more than expected in the prior week at 336,000. Meanwhile, the National Association of Realtors said Existing Home Sales advanced 5.39 million in July, its quickest pace since November 2009. On the other hand, the Census Bureau reported New Home Sales plunged to just 394,000 in July and the June reading was revised down to 455,000 from its initial reading of 497,000.
In other news, Flash Manufacturing PMI and Flash Services PMI data were released across Europe. France had them at 49.7 and 47.7, Germany at 51.3 and 51.0, and Eurozone at 52.0 and 52.4, respectively.
UK’s Second Estimate Gross Domestic Product went up 0.7 percent during the second quarter of the year, thanks to advances in manufacturing, construction, and trade. Preliminary Business Investment also increased, 0.9 percent, during the same period.
 Commodities
Gold marched higher for a third straight week and bulls just missed the $1,400 level a few hours before the week ended. It would be interesting to see if there are remaining bears lurking around and above the $1,400 level. We expect layers of resistance ahead of $1,500. Higher targets include $1,550-$1,630.
Tug-of-war rages on in Oil for a seventh straight week. Infighting between bulls and bears focus mainly between $103 and $108 within the broader $102-$109 range. Overall, the risk is slightly to the downside if the weekly declining peaks are a good indication. Expect the consolidation to persist until we get a decent break out of this range.
Currencies
EURUSD managed to complete its third bullish weekly close despite whipsaw moves during several trading sessions. The pair made a fleeting excursion above 1.3400, but overall the level capped throughout the week. We could see bullish attempts to break beyond this level next week.
Thanks to Dollar recovery, USDJPY has emerged successful in this trading week following last week’s achievement in defending the 96.00 level. To keep the momentum going, bulls need to launch a stronger attack to 100-101.50 starting this coming week.
GBPUSD went from a leader to a laggard after the pair failed to hold on to its gains above the 1.5700 level. This move broke the string of weekly advances which started in the low-1.5200s. Despite this, bulls are still ahead but they need to maintain support at 1.5500 if any attacks surface next week.
The Week Ahead
On Monday, there will only be New Zealand’s Trade Balance and US Durable Goods Orders. UK banks will observe the Summer Bank Holiday.
On Tuesday, traders will only have to look at Germany’s Ifo Business Climate and US CB Consumer Confidence.
Economic releases pick up the pace on Wednesday with Australia’s Construction Work Done; Gfk German Consumer Climate; Eurozone M3 Money Supply; UK CBI Realized Sales and BOE’s Carney speech; and US Pending Home Sales.
On Thursday, there will be Japan Retail Sales; New Zealand’s ANZ Business Confidence; Australia’s Private Capital Expenditures; Germany’s Preliminary CPI; Switzerland’s Employment Level; Canada’s Current Account and RMPI; and US Preliminary GDP and Unemployment Claims.
Finally August ends on Friday with Japan’s Household Spending, Preliminary Industrial Production, and Tokyo Core CPI; Australia’s Private Sector Credit; Germany’s Retail Sales; UK Nationwide HPI and Net Lending to Individuals; and US Chicago PMI and Revised UoM Consumer Sentiment.
