The EUR came off of its highs from Friday and Monday to turn in actual declines on Tuesday and the sluggard trading for the Single Currency has continued into today’s early sessions across Asia and Europe. The EUR is certainly still near its high water marks against the USD taking into context summer trading, but could it be that cracks have appeared in the armor of the ‘confidence game’? Could it be that investors have stopped to think about what the interventions of the ECB and Federal Reserve mean long-term for the health of the global economy? The results from two days of trading cannot be counted as an earth shattering event however there is plenty of evidence to suggest that equity markets may be set to encounter some turbulence and the broad markets may not find a one way street in the coming weeks.

Crude Oil has come off of its highs before going into the weekend. The commodity has seen some downward momentum after reaching highs that were near 100.00 USD per barrel for WTI. Gold however has maintained a lot of its recent gains mirroring the EUR. While the precious metal has lost a small amount of value as of this writing it is near 1773.00 per ounce.

While the German ZEW Economic Sentiment reading was better than anticipated yesterday, its outcome of -18.2 is not a result that will make anybody believe good times are around the corner. Also the Empire State Manufacturing Index statistics published on Monday proved noteworthy in terms of yet another fall. A figure of -10.4 was recorded compared to the already negative estimate of -1.9. What the German and NY Fed’s numbers show is that economic sentiment remains lackluster at best.

International political news remains a rather fertile ground for worry. China saw a rise in the anti-Japan protests over the weekend and this is certainly not helping either country economically. Billions of dollars of trade exist between China and Japan. And also of interest is speculation that the Chinese government condoned the demonstrations against Japan, allowing them to grow in stature when they could have probably controlled the belligerent accusations. What international investors should be asking, is how much influence the Chinese government will exert when it comes to nationalistic issues and if they have the desire to see the anti-Japan protests decrease? Somehow we still believe money will rule the day and that the mess between China and Japan will be swept under the carpet when more pragmatic minds take charge of the situation. The video that came from China as its citizens vandalized Japanese factories and stores have done China no favors. The JPY lost some ground to the USD and the Nikkei declined as tensions mounted. As of today however appears that the Bank of Japan has intervened and brought some stability into the Japanese markets and there are murmurs that China is beginning to stop the demonstrations on the streets.

Housing sector news has started to come from the States today and so far it has come in around expectations. And while some may try to point out that housing starts improved in August part of the reason for this is because housing prices have stumbled so low that some people are taking advantage of the depression in values. Tomorrow a large 10-year Spanish Bond Auction is scheduled, PMI data will come from Germany and France. The U.K. will bring forth Retail Sales numbers, and the States will see the Philly Fed Manufacturing Index besides the weekly Unemployment Claims.

Other news investors are likely paying attention to is the chatter coming from well-known analysts and market insiders regarding the implications of another term in office for President Obama, the Spanish bond yield rumblings, and talk that the Basel III mandates will be obliterated and therefore only a quaint idea that cannot be maintained. So while the ECB and Fed have done a good job of short-term repairs around their collective houses the outside world may prove that the financial landscape is a rather rough sphere.