Pivotfarm Daily News Harvest 3rd August 2010

Markets in a Flash

·        
Asian equity markets continued
their rise last night. The Nikkei finished up +1.29%, while the Hang Seng
finished up +0.21%.

·        
European equity markets are
slightly down this morning. This is after yesterday strong rise took them to
new recent highs.

·        
Commodities are looking strong
today and are pushing to fresh 3 month highs. Oil is trading above the $81.00
level. Wheat prices fell after their recent gains as Russia calmed fears of export
problems.

·        
The USD/JPY has broken its Nov
2009 low and is now trading below 86.00.

·        
The GBP and EUR are continuing
to push higher against the USD and are trading in line with their trends from
the past couple of months.

·        
US equity futures are slightly
lower this morning suggesting a slight drop at the open retracing the rises of
yesterday.

News Focus

More Stimulus may be avoided as economic recovery
continues

Ben Bernanke,
Chairman of the Federal Reserve, expects that consumer spending will pick up as
a moderate recovery continues. He said this is likely to happen while talking
to lawmakers in South Carolina
yesterday. It is expected that Federal Reserve policy makers will pass on
providing more economic stimulus at their August 10^th meeting. They
are expected to wait and see if the recovery in the US economy continues unassisted.

Just Released

0830ET – Personal Income
and Outlays

Personal Income
- M/M change

Previous            0.4 %       Consensus Range            -0.1 % to 0.3 %

Consensus         0.1 %                     Actual               0.0 %

Consumer
Spending - M/M change

Previous            0.2 %        Consensus Range            -0.3 % to 0.3 %

Consensus         0.1 %        Actual                            0.0 %

After personal income posted a 0.4% and a
0.5% increase in the past 2 months a figure of 0.0% has been reported for June.
These under consensus figures should be bearish on the markets as it shows
worse than expected economic data.  This
suggests that people are earning and spending less that was initially expected.

Coming up Today

1000ET – Factory Orders

Previous                  -1.4 %                  Consensus     -0.5 %

Consensus Range      -1.0 % to 0.1 %

The figure
released today is expected to show that factory orders fell in June, this
follows the -1.4% drop in May. This expectation that factory orders has reduced
correlates with the economic data of recent times which suggests that economic
growth is slowing.

1000ET – Pending Home
Sales Index

The pending home
sales index is a leading indicator of sales of existing homes. The index shows
the health of the housing market, and also gives an indication to the health of
the wider economy. A higher than consensus figure will be a bullish sigh for
the economy and the markets. An increase in health of the housing market will
suggest an increase in spending in other areas of the economy. This is an
important figure and has the potential to move the markets.