Risk continues to dominate as the week begins, the EUR/USD finds itself near short-term lows for the Single Currency as headline news and troubling economic outcomes continue to rattle FX and other markets. The Greenback has held onto its value since the middle of last week and the EUR as of yet has not shown the ability to bounce back to its earlier highs seen in mid-September.
Gold is trading near 1772.00 as of this morning which is seemingly high for the precious metal compared to the cracks in the armor that the EUR continues to display. Crude Oil is hovering near the lower realms of its range as the week starts. Commodities on a whole are showing that demand is not sharp – having said that inflation concerns remain with energy and food for consumers.
Manufacturing PMI data will come from the U.K. soon and the U.S. will see the same type of report via the Institute of Supply Management later today. Tomorrow Spain will release Unemployment Change numbers and they will likely serve as yet another stark reminder of the withering conditions for the nation which over the weekend admitted it would likely seek over 200 billion EUR in 2013 in additional aid. And with that noted it is possible that the uncertainty developing in Spain could lead to talk of a ratings cut for its Sovereign Bonds if it continues to wobble. The week will end with the jobless statistics from the States – which could prove a major lynchpin for volatiltiy if a bad result emerges.
Global equity markets have reflected the frail nature of investors the past week and sentiment was not helped this morning with weak PMI manufacturing results from both Japan and China which showed contraction. Both India and Korea also showed stunted growth. The movement for the Yen is a well practiced move for Asian investors led by the Japanese who seek the safety of their own currency via bond purchasing.
As October begins it is becoming clear that a great many questions continue to swell from beneath the carpet which has been used by many governments and leading officials to insist that all will be well.