Reactions to US Leading Indicators and the Philly Fed Index

Leading indicators in the US rose in November to 0.9 percent, beating analyst estimates by 0.2 percent. Philadelphia Fed index of manufacturing activity also climbed more than expectations, reaching to 20.4 for December from 16.7 in the previous month.

It is worth noting that the Empire Manufacturing index for that month had already showed significantly less improvement than expectations. Furthermore, a report on jobless claims which released earlier that day showed an increase of 7,000 when the market was waiting for 8,000 decline.

Following charts show the reactions to the news.

Buying EURUSD; Betting on a Victim

• Euro was a victim of a better than expected Retail Sales in UK, which was highest in almost two decades. Before that, Swiss National Bank cast shadow on possibility of interest rate rise in Switzerland as well as euro area, caused that demand for sterling increased so fast that makes liquidity problem in pound crosses, especially for GBPCHF and EURGBP, which finally translated in selling Euro against dollar.


• In addition, China announced that it is going to raise the price of gasoline, makes the oil price to drop more than 4 dollar; and it was not only another hit to euro but also the reason behind recent rise in US indexes.
  
• Today data from US was mixed. Philly Fed. Index dropped more than estimates when leading indicators increased 0.1 percent.


• I think all of them have priced so far and the market would start thinking about tomorrow German Producer Prices, which is expected to reinforce concerns on inflationary pressures in ECB's calculations.

In less than 30 minutes to the market close, I decided to buy EURUSD at 1.5496; as always I would increase the size if I see improvement in technical data.