Almost true to the eternal August form the global markets have turned in rather cautious results on lower volumes. As large institutional players are on the side line for the ‘summer break’ traders certainly have the opportunity to test ranges.
Data from Japan has shown that the country remains in a devastating stagnation mode that has rippled through the country the past twenty plus years. Consumer Confidence marks were poor on Monday and its Preliminary GDP results yesterday showed recession like numbers.
On top of that Germany has continued to turn in poor data too. Yesterday’s ZEW Economic Sentiment marks were disturbingly bad. And inflation figures from Germany as of earlier today have been deflationary.
China has also turned in less than promising numbers from the Industrial Production front. What all of this means that the global economy remains in turmoil. The old fable about all of the king’s horses couldn’t put Humpty Dumpty together again come to mind. The giant central banks have essentially made money cheap, but businesses still feel less than compelled to try and expand and take chances when they do not see consumers showing the proper amount of demand.
The major have stayed on support levels against the USD. The EUR and GBP have continued to display some weakness versus the Greenback and this might not change in August. Traders must be aware that trends are not one way streets and look for sudden volatile movements, but having said that it is support levels that are being challenged for the Single Currency and Sterling.
The U.S. will release Retail Sales data today and this will be followed up on Friday with the University of Michigan Consumer Sentiment, these figures will give some good insight into the state of the American public. A flurry of debate surrounds the results of U.S. economic reports and investors have a lot to consider.
Gold is trading near 1310.00 USD as of this writing. Global bourses for equities have been cautious turning in slight gains with low volumes. Crude Oil has basically traded in place the past two sessions.
It must be remembered that the global economy remains stagnate and the American economy is no longer the only catalyst that makes the world function properly. If Asia and Europe continue to flounder it will not be help the States and will in fact make the American conditions worse too.