As bad data from Europe and the U.S. flows the E.U. and American equity markets continue to rise. Go figure. The three major indexes in the U.S. appear on the way to another positive day of trading this Tuesday, even as the U.S. Flash Manufacturing PMI reading proved disappointing. Much earlier today the Chinese PMI numbers from HSBC missed their estimate (which put a damper on Asian bourses) and that was followed up by negative PMI outcomes from Germany. But fear not great traders, because we appear to be within the realm of bull run being led by cowboys who have put ‘blinders’ on the horses to make sure the stampede keeps going.
While the equities continue their central bank fueled runs the EUR has seen some pressure however, this as the Single Currency has started testing short-term lows. The GBP and AUD have remained in a fairly tight range the since early Monday morning. Gold made a move upwards early Monday, but has been embraced by headwinds again and as of this writing tonight is around 1411.00 USD.
The German Flash Manufacturing and Services readings both proved recessionary like today, but early Wednesday the engine of Europe gets a chance to redeem itself (if it can) with the Ifo Business Climate composite index. Also in the cards from the continent will be the Italian Retail Sales. And for further confirmation that many investors are continuing to practice the ‘see no evil, speak no evil, hear no evil’ approach to finance, sovereign bond yields from Spain and Italy have done better this week as their yields have fallen. With that in mind Germany is going ahead with a 30-Y Bond Auction tomorrow. While Italy continues to be a mess politically the short-tem investment landscape appears stable for Europe, but Digital Markets Advisor continues to insist that traders should keep an eye on the life preservers.
The U.S. will issue the results for the Core Durable Goods Orders tomorrow. On Thursday the biggest report could turn out to be the U.K. GDP outcome.
Asian markets will be of keen interest in the next few hours as investors in Japan, Korea, and China get to test their sentiment after the Europeans and Americans have essentially said, ‘don’t worry, be happy’ once again. The JPY has continued its devaluation assault and looks as if it will continue to test its weakest boundaries.
Commodity prices continue to face declines. Copper has led the way downwards among the industrial metals, but having said that the price of Silver has also taken a major step backwards. Most grain prices have also traded lower the past day with Corn taking the biggest hit.