Foreign currency futures opened lower following a decline in China’s Shanghai Index that triggered a flight to safety rally. Traders were looking for less risk this morning while seeking the shelter of lower yielding assets. Conditions shifted, however, following the release of a better than expected Chicago PMI report. This report showed an improvement in the manufacturing sector of the economy.
The September Euro and September British Pound erased all of their earlier losses while the September Japanese Yen maintained its strength. Weaker energy and equity prices along with a worse than expected Canadian GDP report pressured the September Canadian Dollar.
December Gold is experiencing choppy trading conditions because of the uncertainty in the currency market. A stronger Dollar is likely to pressure the precious metals. News that China may apply restrictions to curtail reckless lending and curb over capacity is pressuring December Copper.
U.S. equity markets opened lower in sympathy with the global equity markets. For weeks traders have been waiting for a sizeable correction but each break has been gobbled up by fund managers. Many investors feel that this current leg of the rally put the market over the top and into overbought territory. Overnight weakness in the Chinese Shanghai index is the primary cause of today’s weakness. Some traders feel that a divergence between the U.S and Chinese stock markets is a sign of a major top formation. Others are looking for investors to reduce positions ahead of this Friday’s U.S. Non-Farm Payrolls Report.
December Crude Oil is trading sharply lower. Traders have been reluctant to buy crude near the $75 level because the fundamentals still indicate lower demand and increasing supply.
December Treasuries are trading mixed. Many traders had expected the bonds and notes to gain because of weakness in U.S. equity markets. Today’s action suggests it is going to take a substantial break in the stock market to trigger a flight to safety rally in the Treasuries.
The September Euro and September British Pound erased all of their earlier losses while the September Japanese Yen maintained its strength. Weaker energy and equity prices along with a worse than expected Canadian GDP report pressured the September Canadian Dollar.
December Gold is experiencing choppy trading conditions because of the uncertainty in the currency market. A stronger Dollar is likely to pressure the precious metals. News that China may apply restrictions to curtail reckless lending and curb over capacity is pressuring December Copper.
U.S. equity markets opened lower in sympathy with the global equity markets. For weeks traders have been waiting for a sizeable correction but each break has been gobbled up by fund managers. Many investors feel that this current leg of the rally put the market over the top and into overbought territory. Overnight weakness in the Chinese Shanghai index is the primary cause of today’s weakness. Some traders feel that a divergence between the U.S and Chinese stock markets is a sign of a major top formation. Others are looking for investors to reduce positions ahead of this Friday’s U.S. Non-Farm Payrolls Report.
December Crude Oil is trading sharply lower. Traders have been reluctant to buy crude near the $75 level because the fundamentals still indicate lower demand and increasing supply.
December Treasuries are trading mixed. Many traders had expected the bonds and notes to gain because of weakness in U.S. equity markets. Today’s action suggests it is going to take a substantial break in the stock market to trigger a flight to safety rally in the Treasuries.
