Signs of an economic revival in China have raised hopes that Beijing’s targeted measures to bolster growth are having an impact but a slowdown in the euro zone will increase expectations of policy easing there.
Brent crude oil fell below $106 to start the week as the Libyan government neared a deal with rebels to reopen several of its largest oilfields. The commodity traded at $105.83 at 6:15 GMT on Monday morning as investors braced for an influx of supply.
Current market conditions – The Dow Jones (DIA, quote) trading up by 0.21% to 13101.07, S&P 500 (SPY, quote) is trading lower by 0.10% to 1421.51 and the NASDAQ (QQQ, quote) is trading down by 0.65% to 2969.88
Welcome to today’s Morning Coffee Break – U.S. futures are under pressure today as traders become fearful once again of global growth outlook after China reported its 11th consecutive disappointing Purchasing Managers Survey (PMI) of 46.3 for the month of August.
European investors’ optimism for the Eurozone has reached a 3-year low according to a Sentix survey. The Sentix investor confidence for June came in at -28.9, the lowest score since May 2009, but still better than analysts’ expectations for a -30.0 survey result. Back in March of this year, the survey reached a six month high at -8.2, before the survey results declined for the next four straight months.
Most of the major currency pairs continue to show significant correlations with the MSCI World Stock Index, suggesting that broad-based risk appetite trends remain dominant as drivers of price action. This puts thematic macro-level concerns – specifically, the durability of the US recovery and its ability to offset headwinds from Europe and China facing global growth – squarely at the forefront. The US economic calendar is relatively quiet, with headline event risk clustered at the end of the week as PPI and UofM Consumer Confidence readings cross the wires on Friday. This puts the onus on evaluating the extent of downward pressure.
The ongoing political turmoil in Europe continues to shake the markets, with the inability for Greece to form a government now fueling speculation that the country might soon exit the Eurozone. Although an exit by Greece would have only a minimal impact on the broader economy, given the country’s size, fears of contagion seem to be the bigger problem right now, as investors start to price in the impact this will have on larger economies like Spain and Italy.
Euro: French, Greek Elections Raises Risk For Breakup – 1.3000 Crucial British Pound: Correction In Focus, BoE To Discuss Exit Strategy Euro: French, Greek Elections Raises Risk For Breakup – 1.3000 Crucial The Euro tumbled to a fresh monthly low of 1.2954 as French President Francois Hollande overtook Nicolas Sarkozy as the president of France, while the two main parties in Greece failed to obtain a joint majority, and the
Stocks opened lower Monday following elections in France and Greece over the weekend.
The greenback is markedly higher in North American trade with the Dow Jones FXCM Dollar Index (Ticker: USDOLLAR) advancing 0.28% on the session after moving nearly 76% of its daily average true range. April non-farm payrolls disappointed today with a print of just 115K, missing forecast estimates for a read of 160K. While the unemployment rate surprisingly declined to 8.1% from 8.2%, it’s important to note that the decline can
