The ECB has held its monetary policy press conference this afternoon and nothing that shocks investors was produced as its statement remained muted. The EUR/USD has crawled upwards to the higher parts of its range in the past day, but remains rather problematic as the broad markets continue to pay attention to the caution signs along the economic highway. Crude Oil has fallen through its support levels and finds itself near 89.00 for a WTI barrel. Gold in the meantime has followed the Single Currency upwards and is around 1789.00 as of this writing. Lastly the equity markets have been choppy, early trading in Europe was positive but in the last hour has given back many of its gains.
Since the press conference has ended with ECB President Mario Draghi, the yields on Spanish 10-Y Bonds have expanded (a vote of discontent feet perhaps?). Sovereign Debt will remain an intense barometer for investors. And although the EUR has gained in value the past day it is likely to see a tests of these short-term highs within a trading climate that remains fragile. Facts on the ground point to a wide spread recession in Europe. And as President Draghi noted today extreme levels of fragmentation exist in lending and it availability for the public depending on their E.U. geography.
Last night the U.S. election process moved into hyperforce as President Obama and his competitor Mitt Romney held the first in a series of debates. By most measures regarding substance and having an outlook for the economic future Mitt Romney won the debate. But tomorrow is another day in the electoral process and President Obama still holds a lead in most national polls as the election draws closer.
Making news from the Middle East were the shock waves on the streets of Tehran as the Iranian currency, the Rial, collapsed in value leaving many citizens of Iran not only perplexed but angry as street protestors lashed out in mass yesterday. As sanctions take their hold in Iran inflation has soared and the Iranian Central Bank is having an increasingly difficult time maintaining an inventory of ‘hard currencies’.
Weekly Unemployment Claims have been released from the U.S. in the past hour and almost met expectations head on with a result of 367K. Also today Factory Orders have shown a decline of minus -5.2%, but actually beat the estimated fall of minus -6.0%. Nevertheless neither outcome can be viewed as a positive and essentially they pave the way for tomorrow’s Non-Farm Employment Change statistics which have been a big reason for the rather dull but swirling waters on Wall Street and other bourses the past few days. Federal Reserve gurus will be on alert for the FOMC Meeting Minutes which will be published later today and the paper is likely to show that internal debate about monetary policy continues to grow.