The sound of the ‘thud’ that was heard yesterday was quite possibly the ‘door of reality’ hitting anyone who believed that nothing but sunshine would find risk assets within this cauldron of expectation. While the declines were not steep they do point out clearly that investors remain worried.
The EUR/USD moved to the lows of its short-term range on Monday as a mix of bad European data, political misgivings between France and Germany were heard, and a downward trend continued for the Single Currency as it got pushed back from it recent highs again. The German Ifo Business Climate reading did no favors as its disappointing results reiterated a rather negative outlook. Wrangling between France and Germany, and rumblings from Spain highlighted that while the ECB may make grand plans, that politicians pushed by various interests will not be keen on letting go of certain powers easily.
Gold as of this writing is around 1767.00. It has come off of its highs which touched 1800.00 USD when the Single Currency was making large strides versus the Greenback. If the EUR should continue to experience downward pressure it is likely Gold could see its consolidation wither and also decline.
Crude Oil has also traded lower and like the other risk assets in terms of speculative trading is finding that questions about the global economy have proven too much for a one way upwards climb.
Forex, commodities, and equities had taken on the tone of a traders market in August and much of September as it became clear that the Federal Reserve and ECB would get their collective wishes granted. However, even if a wish is fulfilled its often doesn’t solve the real problems that exist. The economies of the U.S., Europe, and Asia are facing hurdles that will not be easily solved by shortcuts. While profits are no doubt appreciated by investors it still remains a matter of preservation for many. And the army of government officials worldwide who keep on pushing their ‘confidence game’ forward and trying to tell the mass – particularly investors – that all will be OK – from the safety of their public service jobs will continue to find tough days ahead.
The CB Consumer Confidence reading will come from the States today and it is expected to have an outcome of 63.1 which would be an improvement upon last month’s data. The results will be interesting taking into consideration that the jobless numbers from the U.S. have stagnated the last couple of month’s and have shown little improvement. Overall the data from the States has been lackluster and if investors are given additional sour news via the CB Consumer Confidence figures it could prove a lynchpin for additional pressure on Wall Street which has found headwinds as of late.