By FX Empire.com
The renewed worries over the global economic growth weakened the market’s sentiment, increasing demand on the safe haven USD. In China the HSBC flash manufacturing PMI fell by the most since March 2009, while in the US the economic growth estimates for Q3 were lowered below expectations.
The slowdown in Europe and the US started to be felt in Asia, where the slower demand on exports pushed China’s flash estimate manufacturing PMI to contract in Nov. to 48.0 from 51.1. And while Asia was able to sustain the global growth last year, this scenario may not be possible this year.
The Euro Zone seams to be heading towards a recession, as the manufacturing sector is contracting during Nov. in both Germany and Europe. Meanwhile the Spanish yields on bonds kept rising close to the level at which it will need financial support, where the yields on the 10-year bonds reached to 6.58%.
While markets in Japan are closed today for a holiday, Asian stocks dropped where the MSCI Asia Pacific Index excluding Japan fell 2.4% at 15:00 in Hong Kong. In Australian the lower house of the parliament passed a resources tax pushing the shares of the mining and steel companies down.
More downside pressures were imposed today by the slowdown in the US economic growth which slowed to 2.0% during Q3 from the initial estimates of 2.5%. A confirmation to the slowdown in US was given by the Fed’s minutes which indicated that “some policy makers thought monetary easing may be necessary”.
Markets are awaiting later today the release of some important data from the US where the durable goods orders may fall in Oct. to -1.2%, while spending is expected to soften to 0.3%, the initial jobless claims are expected to rise to 390 K last week, while confidence is believed to improve slightly to 64.5 in Nov.
These developments did not sustain the market’s appetite for risk, and demand on safe haven helped push the USD higher today. The greenback is trading as of this writing around the 78.55 level. The yen is moving in a tight range around the 77.00 level with a slight downside momentum. Shares in Europe were also down.
The euro was pushed lower today not only by the USD but also by the disappointing data released today from Germany and the Euro Zone. The single currency is trading as of this writing around the 1.3447, while the pound fell sharply trading around 1.5570 ahead of BoE’s meeting minutes.
The dollar’s gains pushed the commodities down today, loosing some of the gains seen yesterday. Crude oil is trading below the $97.00 level around $96.55 dollars per barrel, while gold is trading below the $1700.00 around the $1695.45 level. The AUD is moving with bullish momentum around the 0.9750 level.
Originally posted here
