In the past twenty-four hours the EUR has traded lower against the USD. Gold is trading around 1738.00 as of this writing and Crude Oil remains in a consolidated range near 92.00 per a barrel of WTI. The EUR has been near one month highs most of this week, but has seen some pressure after approaching the highs of its mid-term range. The precious metal has seen consistent headwinds the past week and some of the decline is likely due to core inflation data coming in below expectations in China and the U.S. in the past few days.
Data will be light today with only Public Sector Net Borrowing figures from the U.K. and Existing Home Sales numbers from the States. Yesterday’s statistics proved a mixed bag with worse than expected figures from the weekly Unemployment Claims, but better results for the Philly Fed Manufacturing Index. Early today from Asia, China released its Foreign Direct Investment findings and they showed a disappointing minus -3.8% outcome, the previous month’s number was minus -3.4%. The poor investment totals show that economic pressures are mounting globally and highlights that China’s great period of expansion may be finding more challenging hurdles.
Wall Street produced losses across the three major indexes yesterday. While trading on the Dow and S&P Indexes were rather mixed, it was NASDAQ that took the steepest loss with a lackluster report from Google which missed its estimates. Quarterly earnings will continue from the corporate front today with General Electric, Honeywell, and McDondalds representing just a handful of the participants.
As of this morning many of the major currencies continue to hold onto their higher grounds versus the USD. The GBP and AUD both have done well against the Greenback in recent trading. With commodity prices continuing to face headwinds the AUD may have reason to come off of these values. And regarding the GBP, the Sterling like the Single Currency have both enjoyed rather calm waters the past week, but this cannot last forever taking into consideration the amount of concerns that fester because of the European financial crisis. The E.U. Summit will continue today and as has been predicted here has begun to speak publically about new agreements on banking oversight with very little in the way of tangible frameworks. As one Dutch minister put it and we paraphrase, things remain a bit vague. With a German election forming on the horizon, Ms. Merkel will continue to do her best to avoid storms which could be held against her.
Trade Balance numbers will come from Japan on early Monday. The JPY remains at the weaker points of its range versus the USD. For those with firm stomachs and a belief in the ability of the pair’s desire for consolidation the Yen may be worth looking at as a buy. The question is if the JPY will only seek to test its June weakness or the lows of March before getting stronger?
Large questions remain about the overall health of the broad markets. Storm clouds are certainly lurking in the sky and investors are likely to remain nervous as they go home for the weekend.