By FXEmpire.com
This morning, in Asia equities are trying to fight back after recent losses,even as the HSBC China Manufacturing PMI declined further into negative territory. China continues to be the main topic of conversation and a big drain on the stock and currency markets.
A Quick Look Around the Globe Today
Of course, from a market point of view, moderately disappointing news is often not that bad for markets as it keeps the door open for an accommodative monetary policy. Whatever the interpretation, Asian equities are mostly slightly higher and EUR/USD has a cautious upward bias, too. In Europe, the advance PMI’s will receive quite some attention. Last month the report disappointed. This month a very modest rise is expected. Question is whether this will be enough to remove doubts on the EMU economic performance. There is probably quite a big positive surprise needed to trigger a sustained move higher of EUR/USD. In the US, the weekly unemployment claims and the leading indicators will be published. Especially the claims have (intra-day) market moving potential. However, more will probably be needed to reinforce the case for a cyclical rebound of the dollar. Fed Chair Bernanke will give a 2nd lector on the crisis as the George Washington University but we don’t expect him to give any clear hints on a change in monetary policy at this forum.
There was no evidence of any Fed rethinking in his testimony on Capitol Hill yesterday, where he painted a fairly rosy picture of the US recovery, and continued to push EU ministers to dip deeper into their own pockets. He also indicated that the US did not want to help with any additional funding at this time for the EU.
So, even as the calendar is better filled compared to the previous days, trading might develop along the same lines as what happened earlier this week. We still look out whether the 1.3291 reaction lows will hold.
There is very little for the balance of the week in economic data, let’s hope that Spain, Portugal and Italy can stay off the front pages and that Hungary remains sane for a bit longer. Even the rhetoric from Iran has fallen a bit.
Now we do have the possibility of a move downwards on Crude which is way too high, and more rumors that the Obama Administration is considering a release from strategic reserves.
Originally posted here
