Trading Insights: Positive economic data bringing in “green shoots”

Skilling Writers Team
2023-03-01
- News
- Trading

Market Talk

China PMI data blows past expectations in a positive signal for a change within the manufacturing sector

The Purchasing Managers' Index (PMI) is an index of the current direction of economic trends in manufacturing and service sectors of the economy

Values above 50 indicate expansion, which is considered bullish for the respective economy

Source: National Bureau of Statistics of China

Cross-asset reaction

Risk on trade triggered as investors shift out of the safety of the USD and into risk assets such as the S&P Index

China A50 Index jumped higher after the positive PMI signal

USD/ZAR fell sharply

The USD/ZAR is an emerging market FX pair
When the USD falls against emerging market FX it is viewed as a signal that investors are feeling more confident about economic conditions and willing to take on more investment risk

Today’s Economic Events

US Crude Oil inventories expected to fall by 6,297 million barrels

WTI crude oil has advanced +3.61% during the last 5 days. Price remains below the $77.90 resistance, a move above could trigger a further push higher

Time: GMT+0	Country/Region	Economic Indicator	Previous	Forecast	Actual	Units
1:30:00 AM	China	Manufacturing PMI	50.1	50.8	52.6	-
12:30:00 AM	Australia	GDP q/q	0.6	0.7	0.5	%
9:30:00 AM	United Kingdom	Net Consumer Credit (BOE)	0.8	0.5	-	GBP
1:00:00 PM	Germany	HICP (p) y/y (inflation)	9.2	8.6	-	%
3:00:00 PM	US	Construction Spending m/m	-0.4	0.3	-	%
3:00:00 PM	US	ISM Manufacturing Index	47.4	47.8	-	-
3:30:00 PM	US	Crude Oil Stocks ex. SPR w/w	7.647	1.35	-	bbl

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Technical commentary

WTI Crude Oil price remains below its 50 day moving average (bearish); short term support is spotted near $73.80 (February 22 2023) low; resistance at $77.9 intersecting near the 50 day moving average suggests the $77.9 area is a key resistance zone, a break above could increase the prospects for a sharp upward price advance towards the $82.9 zone, however, current moving average analyst suggest that price remains bearish in the medium term (26-50 days)