US Stocks Lower as Sentiment Sours
The major US stock indices all closed in the red yesterday as investor sentiment continued to fall off, the Dow led the way closing down 1.01%, the S&P off 0.64% with the Nasdaq proving the most resilient finishing just 0.18% down. Earlier in the day, Chinese data had come out lower than expected and US Retail Sales numbers followed in that vein. There was more talk on the US debt ceiling, but the issue is still ongoing, and that uncertainty is a major concern for investors. The dollar appreciated again against most currencies and notably appreciated strongly versus Gold, falling out of its recent range back under the $2,000/oz level.
FX Traders Preparing for Some Big Moves
The majority of the major FX pairs have been trading in familiar ranges for a few weeks now and experienced campaigners are preparing for an increase in volatility. The fading ranges for most traders has worked well recently as interest rate differential expectations have moved in concert across jurisdictions but some pairs now look and feel poised for some big moves. There are a few potential catalysts on the horizon and it is difficult to put your finger on exactly what could be the cause of some moves, top of the list is the US debt ceiling issue at the moment. Watch this space!
All Quiet on the Data Front
There is little in the way of data releases scheduled today to push markets into fresh moves but that certainly does not mean that it is a quiet day ahead. The Wage Price Index numbers are out in Australia during the Asian session but with the employment data due tomorrow expect that to have minor impact on the market. In the European session we are set to hear from BOE Governor Andrew Bailey when he speaks at the British Chamber of Commerce which could add some volatility to cable, especially as it is sitting on month support. The US session lacks data releases, but the debt ceiling and sentiment should see things move there once New York opens.
