After a relaxing weekend investors will arrive to their offices toady to find a full gauntlet of information to ponder. Politically the U.S. election is fast approaching, tonight is the final debate between the candidates, and polls shows that the challenger Mitt Romney is very much in contention. From Asia political tension between China and Japan has not subsided as they argue about a chain of islands in a territorial dispute. From the Middle East the civil war in Syria is running unabated and this weekend’s blast in Beirut shows that there are ‘factions’ intent on seeing trouble spread further into Lebanon. The worry is that all of the above will be a sea of ingredients for a fragile marketplace to contemplate.
Export data from Japan early this morning showed a worsening Trade Balance and this does not bode well for a Japanese economy that faces serious questions about long-term health. The JPY remains on the weaker side of its range against the USD, but with a broad market that remains psychologically fragile, it can be expected that the JPY may strengthen as risk adverse trading grows, though Japanese exporters for the most part would certainly like to see the Yen weaken further.
The EUR has backed away from the higher levels of its mid-term value against the Greenback, but the Single Currency continues to display some staying power. The E.U. Summit this weekend proved once again that while the leaders of European nations are very good at saying all will be well, they have a tendency not to produce tangible results.
Forex, commodities, and bourses will all continue to find a big testing ground this week. Wall Street finished Friday with steep losses on all three major indexes and both Crude Oil and Gold are experiencing headwinds. Commodity prices have seen choppy trading the past month but most of the price pressure has been to the downwards side and this trend in the short-term may continue.
Quarterly Earnings will continue from the States today and among those reporting will be Caterpillar, Texas Instruments, and Yahoo. Other economic data will be rather light today internationally. Tomorrow from the U.S. the Richmond Fed’s Manufacturing Index will be released, along with data and an interest rate decision from Canada. Wednesday’s statistics will amp up with Manufacturing and Services PMI data from Europe and Manufacturing PMI results from the States.
Overall investors proved that they remain rather nervous as last week ended and there is reason to suspect that this is not going to change soon.