Risk appetite continued to dictate the pace in a very emotional market in NY trading. Stocks got decimated nearly -7% as a supposed deal to bring relief to the US automakers fell through. The S&P 500 took out the 2002 intraday low and at 752 was at the lowest level since 1997. The Dow meanwhile dropped a whopping 445 points in the session.
Pathetic US economic data helped sow the seeds of decline for stocks early in the session. US weekly jobless claims jumped to 542K after a 515K print the prior week. This points to a job market that is deteriorating at a much faster than anticipated pace and now the potential for an unemployment rate approaching 10% in 2009 cannot be discounted. The Philly Fed manufacturing index followed up less than two hours later by disappointing markets some more. The metric sank to -39.3 from -37.5 previously and the guts of the report were terrible to boot.
This led risk trades in FX into intraday and in some cases weekly lows. EUR/USD shed about -95 points and was sitting near 1.2450/55 at the close. A break below this level sees weakness into 1.2400 next. JPY crosses were pummeled. USD/JPY fell about -190 pips towards 93.70 while EUR/JPY saw even more impressive selling as it plunged -325 points towards the 116.60/70 zone. The other big story was the decline in oil prices which fell to well below the critical $50 mark. This helped USD/CAD rally nearly 400 pips in NY trading and the pair was near 1.2960/70 at the close.
Upcoming Economic Data Releases (Asia Session) Prior Estimate
- 11/21/2008 2:00 US Fed's Bullard to Speak at Indiana Economic Conference
- 11/21/2008 JN BOJ Target Rate 21-Nov 0.30% 0.30%
