On the Threshold of Corporate Earnings - 8.1.2013

On Tuesday Asian shares slid lower and all the major stock indices ended up in the red territory following losses of US stocks. S&P 500 stock index, one of the most widely watched gauges of the US stock market, grew last week to its highest level in almost three months – 1467.94, having few points ahead of a 5-year high at 1474.51, although the Friday’s close at 1466.47 was really the highest in 5 years (see chart). It looks like market participants have taken a brake after successfully resolved or at least postponed fiscal cliff issue and before a new corporate profits season for the 4th quarter of 2012. In the United States the season starts today after market closure with aluminum giant Alcoa. S&P 500, daily chart On the currencies market the US dollar fell slightly further against the Japanese yen. Following a confident 3-month rally to 88.40, the pair USDJPY retreated this morning to 87.22. The dollar also lots ground against the euro in the last two trading days, at the moment the pair is trading slightly above 1.3100 (see chart). Later in the global day a considerable block of macroeconomic data for the euro area is expected to be released, including consumer confidence indices, unemployment rate and November retail sales. However the key event of the week is scheduled for Thursday when the ECB holds its first policy meeting of 2013. EURUSD, daily chart The Australian dollar fell under pressure against the greenback today. The currency pair dropped from 1.0515 to 1.0471 in Asian trading hours after Australian November trade balance data reading. According to the National Bureau of Statistics the trade deficit reached its highest level in 5 years at 2.6 billion AUD.