ECB Signals Hawkish Tone but Concerns Still Remain
The Euro is trading slightly lower after a breakout over the last swing top at 1.3434 failed to attract fresh buyers. Although the move through this level turned the main trend to up on the daily chart, the lack of momentum indicates the market may pull-back, allowing bullish traders to regroup, before moving higher.
The Euro is down across the board on Monday amid concerns that peripheral debt problems are resurfacing. Issues began to resurface last week, culminating on Friday when the 10-year Irish Bond yield stood at record spread over the comparable German debt and similar Spanish/German yield Gap rose to its highest since mid-July.
Easing of Irish Debt Concerns Help Boost U.S. Equities
December Crude Oil continued its downslide on Tuesday due to demand concerns and growing inventories in the U.S. Since breaking Fibonacci support at 76.45 on August 19, crude oil has dropped over $3.00 per barrel to the July 6 bottom at 73.15. If downside momentum continues, the market should test the May 25 bottom at 71.50 shortly.
Investors Shying Away from U.S. Dollar in Wake of Economic Concerns
The Euro rose against the Dollar overnight buoyed by concerns that the weakening U.S. economy may be slowing the recovery. Based on recent data and testimony from Fed Chairman Bernanke, investors are bracing for a weak Second Quarter GDP report on Friday. This is driving investors into the Euro as the Euro Zone economy seems to be improving faster than the U.S.
Trichet Softens Concerns about Stress Tests; Euro Takes Direction from U.S. Equities
The Euro rallied early, traded in a range then made a move to the upside in a lifeless trade on Thursday. Volume appeared to drop off throughout the day following the European Central Bank’s policy statement announcement shortly before the start of the New York session. For the most part, the Euro seemed to be taking its direction from the U.S. equity markets.
U.S. Dollar Poised to Open Better; Stress Test Concerns Underpinning Greenback
The U.S. Dollar is trading higher against most currency markets this morning ahead of the opening in New York. Although the Greenback closed lower on Tuesday, it started to regain earlier losses about mid-session on concerns about a slow down in global growth, European bank stress tests and short-term oversold conditions.
Stocks Plunge; Weak Jobs Data Worsens Concerns of Economic Slowdown
U.S. equity market plunged sharply lower into the close as disappointing U.S. jobs data as reported by the ADP Corp. encouraged investors to liquidate positions well ahead of Friday’s U.S. jobs data. Investors are now becoming concerned that calls for a gloomy outlook for the economy is going to become a self-fulfilling prophesy.
U.S. equity markets broke sharply on Tuesday after disappointing housing data encouraged profit-taking after the recent strong run-up and investors expressed worry about the strength of the economic recovery. The weakness in the equity markets was broad-based as all sectors including industrial, energy and consumer were hit with selling pressure.