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The Day Ahead - Tuesday's Brief

|Includes: ELEMENTS Australian Dollar (ADE), BEO, BEP, CNY, DJ, ERO, EWA, EZU, FEZ, FXB, FXC, FXE, FXF, FXY, GBB, GLD, GRE, IWB, JYF, JYN, NFP, SPXL, SPY, SPY, UDN, USD, UUP, VCR, XLY, YCL, YCS


Risk appetite took hold after a prolonged weekend in the United States came to the hold. North American traders will need to digest a sway of positive data from around the world. At the beginning of the North American Session, the Euro stands at 1.26, Aussie holds at 0.8530, Pound is stable at 1.52, Loonie gained strength to 1.06, and the Yen fell to 88.00.

The Australian Dollar gained an unparallel amount after the RBA kept the interest rates at bay of 4.50%. However, the Aussie gained strength as traders believed that the rate could reach as high as 5% by the end of the year as the central bank anticipates an upward pressure on the wages. Higher wages will put a pressure on the prices and create inflation. With rising commodity prices, higher wages are probable, initiating a hike from the Reserve Bank of Australia in the upcoming future. The central bank is expected to raise rates as soon as next month.

The Land Down Under continued to print healthy economic figures. Australian Trade Balance remained in relatively robust growth as it surprised to the upside, printing at A$1.645B versus A$0.5B eyed.

Swiss economy is not generating an up surd inflation figures even though the economy is booming on all cylinders. Consumer Price Index is currently standing at 0.5%, suggesting that deflationary pressures may originate. Nonetheless, the figures come as surprise as retail sales among other aspects of the economy continue to show robust growth. For instance, retail sales rose by 3.8% in May, beating the estimates of 1.8%.

The key gauge for the remainder of the day will be the ISM Nonmanufacturing released from the US at 10:00AM EST. With the economy cooling off due to retrieval of government stimulated growth, a key gauge of service sector may print below the estimates of 55.0.


 



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