The broad markets have continued to churn early Tuesday morning. Asian bourses turned in mixed results as the Nikkei fell along with the Korea Stock Exchange, but both Shanghai and Hong Kong have turned in gains. The EUR/USD has stayed within its known short-term range and Gold has shown some consolidation.
The central focus for many today will be the summit between Germany and Greece in Athens today. Massive protests have been organized and investors are hoping that the demonstrations remain peaceful. All eyes will be on Angela Merkel and her statement when the Athens meeting concludes later.
French Trade Balance numbers have been released already this morning and turned in a negative result of -5.3b. Manufacturing Production results will come from the U.K. shortly and the expected outcome is a decline of -0.6%. An economic optimism reading will come from IDP/TIPP in the States today, but most American investors eyes will be on Alcoa and the onslaught of quarterly earnings that officially begin for the third quarter. Wall Street turned in sluggish trading yesterday with low volume due to the Columbus Day holiday. The markets will return to full force today and as we begin to enter the heart of October trading the question is how much risk investors will have a taste for.
Since reaching short-term highs in September commodity indexes like the RJ/CRB and the UBS/Bloomberg have seen declines. Commodities saw their highs for the year in late February and early March, prices are now well off their highs and appear to have found a combination of poor demand outlooks and a less speculative flair. Having said that many major economies in fact have seen a rise in food and energy prices and this is not helping consumer confidence. Crude Oil as of this writing remains under 90.00 USD for WTI per barrel.
The GBP has continued to trade to the downside against the USD, while it is approaching a monthly low it still remains near its higher values. There can be little doubt that the GBP has been trading based on fragile existing sentiment particularly from the slings and arrows that the EUR is exhibiting. The GBP remains the more attractive currency between the Sterling and the Single Currency, but the Greenback is likely to find more takers if risk is taken off the table. The AUD has also been pushed to short-term lows against the USD and if physical resources continue to be pressured, the Australian currency could see further declines.
While the JPY has lost a bit of value against the USD it does remain in a rather well-known dance of consolidation and opportunities are ever-present for traders who have the patience and stomach to take advantage of its ranges. The JPY continues to show an ability to pick up value when preservation becomes paramount.
With traders returning in full force to the markets today, they will have to interpret news from Greece and global economic data which remains troubling.