More of the Same for Commodities

On Friday, stock markets made no significant gains or losses, after news of flat corporate earnings and data showing slow growth in the 2^nd quarter US economy. Expenditure on capital machines for companies slowed significantly, but increased consumer spending offset this, hence the weak splash on the back of these reports. The Fed could be close to an interest rate decision given this slow momentum. The dollar is rising again, reaching a one week high against peer currencies on the aspiration of the Fed to a more stable economy and an inflation target of 2% close to reality.

Commodities prices have been driven even further down from their recent lows on the back of a stronger US dollar. MXN rose on the statement from Mexico’s Central Bank that a governmental intervention was needed to help the peso. The GBP remains in bullish territory due to an interest rate increase on the books for early to mid 2016, exponential job growth in the UK and protective statements released from the Bank of England. The month-over-month manufacturing report for the UK is the main attraction for the Euro-hour economic event calendar. The index will most likely increase .10% to 51.5 due to expansion in the factory sector. The outcome may not have a favorable effect on the Pound however, as many traders await official announcements from the Bank of England regarding policy changes before setting positions.