This morning the markets appear to be in risk taking mode as hopes that the European debt crisis can be contain are outweighing fears of further contagion. This has markets moving higher, led by stocks and the Euro and with gold selling off.
While this does not by any means imply that the problems are over, the markets are re-calibrating themselves in anticipation of a potential solution in Europe, though the Euro is giving back earlier gains. It is quite possible that today will be the type of day that flips back and forth between risk appetite and aversion. A conference call later this morning between EU countries has the markets high on anticipation.
In the UK, the jobless claims figures came in better than expected with fewer newly unemployed. 20K lost jobs vs. the expectation of 35K and the weekly earnings were slightly higher.
The Aussie and Kiwi are also trading lower and giving back earlier gains despite the fact that consumer confidence figures came in much better than last month. However, housing starts in Australia declined 4.7% on interest rate outlooks so the potential for a declining economic picture is on investor’s minds.
The Kiwi, on the other hand, appears to be the beneficiary of a strengthening economy and we will learn more from the Central bank later today when the RBNZ has it’s rate policy meeting. Rates are expected to remain steady at 2.5%.
Here in the US, economic stagnation persists as advanced retail sales figures came in worse than expected showing no change vs. an expected gain of .2%. This is concerning because we are in the middle of the “back to school” season which usually means more spending so overall spending may be a whole lot worse.
The economic picture here in the US is slowly deteriorating the “jobs bill” that the President has proposed is more of political posturing than a serious or credible bill to get people back to work. Apparently the American people are going to have to suffer for the rest of this President’s term as he appears to be unwilling to compromise from the ideology that got him elected but largely has failed.
So there is still major risk in the marketplace, though it might not be reflected at this stage of the morning. Recent trends have the US dollar strengthening as money is moving away from the Euro and needs to find a home.
While this does not by any means imply that the problems are over, the markets are re-calibrating themselves in anticipation of a potential solution in Europe, though the Euro is giving back earlier gains. It is quite possible that today will be the type of day that flips back and forth between risk appetite and aversion. A conference call later this morning between EU countries has the markets high on anticipation.
In the UK, the jobless claims figures came in better than expected with fewer newly unemployed. 20K lost jobs vs. the expectation of 35K and the weekly earnings were slightly higher.
The Aussie and Kiwi are also trading lower and giving back earlier gains despite the fact that consumer confidence figures came in much better than last month. However, housing starts in Australia declined 4.7% on interest rate outlooks so the potential for a declining economic picture is on investor’s minds.
The Kiwi, on the other hand, appears to be the beneficiary of a strengthening economy and we will learn more from the Central bank later today when the RBNZ has it’s rate policy meeting. Rates are expected to remain steady at 2.5%.
Here in the US, economic stagnation persists as advanced retail sales figures came in worse than expected showing no change vs. an expected gain of .2%. This is concerning because we are in the middle of the “back to school” season which usually means more spending so overall spending may be a whole lot worse.
The economic picture here in the US is slowly deteriorating the “jobs bill” that the President has proposed is more of political posturing than a serious or credible bill to get people back to work. Apparently the American people are going to have to suffer for the rest of this President’s term as he appears to be unwilling to compromise from the ideology that got him elected but largely has failed.
So there is still major risk in the marketplace, though it might not be reflected at this stage of the morning. Recent trends have the US dollar strengthening as money is moving away from the Euro and needs to find a home.
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