US Leading Indicators Surprise to the Upside

Last updated 1/26/2009 10:43 AM ET (GMT -5) 0 Comments - Add your comment

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Boris Schlossberg

Director of Currency Research, GFT

US Leading indicators shocked to the upside, rising 0.3% against a forecast of -0.2% decline. This was the first positive print for the index in six months as a rebound in financial components outweighed the losses from increased jobless claims and stock market declines.

The biggest positive contribution came from the increase in money supply as the Fed flooded the market with liquidity. Interest rate spreads and manufacturers’ new orders for consumer goods also helped to push the index higher.

Along with a hefty jump in new home sales which increased 6.5% against forecasts of -2.0% contraction, today’s US economic data provides a rare ray of sunshine amidst a atmosphere of doom and gloom that has pervaded the over the markets in the past week.

If equities can maintain their positive momentum for the rest of the day USD/JPY should be the primary beneficiary of renewed increase in risk appetite and the pair could make a run for the 9000 figure as the day progresses. Furthermore, the AUD/USD which is always very sensitive to risk flows should get an additional boost from the rise in gold which has broken the $900/oz barrier earlier in the day.

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About The Author

Boris Schlossberg began his Wall Street trading career more than 20 years ago at Drexel Burhnam Lambert. There, he traded nearly every type of financial product on the market in the U.S., from equities and options to stock index futures and foreign exchange. His innate ability to analyze market information and use it to trade has helped him become an industry-recognized, “go to” trading professional.

These days, whenever the markets move, many organizations turn to Schlossberg for his take on the situation. He is a weekly contributor to CNBC's Squawk Box and a regular commentator for Bloomberg radio and television. His daily currency research is widely quoted by Reuters, Dow Jones and Agence France Presse newswires and appears in numerous newspapers worldwide. Schlossberg has written for publications like SFO magazine, Active Trader and Technical Analysis of Stocks and Commodities. He is also the author of Technical Analysis of the Currency Market and the co-author of Millionaire Traders: How Everyday People Are Beating Wall Street at Its Own Game with Kathy Lien. He joined GFT in 2008.