FOLLOW MARKETMOVES

Market Comment 23rd Nov 2011

Just as the Dow was closing last night it looked like US losses had been contained and at the time we were actually calling the FTSE to rise on the open, however the Asian equity markets have plunged to new lows and this has fed through to the start of European trade this morning. 

Today it’s poor economic data from China that’s causing the worries as a PMI number comes in below the 50 level indicating contraction and fuelling worries that China’s economy is set for a hard landing, and this comes just after yesterday’s revision downwards to US GDP growth.  Economies are slowing around the globe and with each passing week the threat of another global recession becomes all the more real.  No matter what politicians do at the moment they seem completely inept at being able to stop the confidence that’s being ebbed away.  We may find that 2012 is going to be a much tougher year than 2011 which will be remembered as the year that should have been a continuation of 2010’s recovery, however it will now be remembered as the year that a double dip became ever more likely.

In the run up to the credit crunch in 2007 and then the subsequent banking crisis the world had enjoyed good levels of growth, all of which had been built on credit as consumers, companies and of course countries gorged themselves on easy money in order to feed their unsustainable spending habits.  With consumers and companies, the life blood of the economy, reigning in their spending and unlikely to splash any cash soon, growth will continue to stall.  Revision downwards after revision downwards to GDP, caused primarily by the ongoing eurozone debt crisis, does not look like reversing and turning into revisions upwards and this too is having its effect on confidence.  No matter how much money you print or bailout funds you provide, you probably won’t avoid negative growth and rather than wasting more money that’ll will only have to be repaid by our children’s children, it is often best to let the natural course of events take it’s path.  Companies are already leaner and fitter than they ever been, however they are not ready to invest yet.  We will probably have to see things get a lot worse before they get better and confidence is restored.

This morning more PMI data is due for release from Germany and the EU.  Europe’s biggest economy Germany is no longer immune to the doom and gloom spelt out above and their services and manufacturing sectors are going into decline, with the manufacturing figure in particular sitting below the 50 level and set to get lower still.  Services are expected to remain above the 50 level, however don’t be surprised if we see this number dip below too. The EU number doesn’t look any better with new orders continuing their decline and exports suffering.  All in all not a pretty picture for the eurozone.

Also today we have the release of the Bank of England minutes where we will want to see what the chances are of further QE.  High is the basic answer.  Then later US data comes in the form of durable goods, personal income and spending, the weekly initial jobless claims (a day early ahead of Thanksgiving tomorrow) and then we end up with Michigan confidence.  No shortage of data then before North Americans go on holiday!

The risk aversion continues to depress the euro which is hovering around its recent lows. EUR/USD is at 1.3450 at the time of writing and traders will be focusing on the PMI numbers from Germany and the EU.  Short term things still look negative from a technical point of view and support is seen at 1.3425/00 and resistance at 1.3540, 1.3615.

Gold has done well to attract some buyers back having dipped below 1700 yesterday. Yesterday saw considerable weakness in the precious metal as it reached a low of around 1665, but overnight the Asians helped to push it back above 1700 and this morning we’re at 1702.  Things have also turned negative from a technical point of view for the yellow brick as rallies don’t last long and we can’t rule out another test of the 200 day moving average which currently sits around 1600.

comments powered by Disqus

All Market Comment News

Trusted Firms

All Reviews
AUD/USD update (23rd April 2014, 14:00) 23 Apr 2014

The Australian dollar has slipped following softer-than-expected inflation figures.

EUR/USD update (23rd April 2014, 13:00) 23 Apr 2014

The EUR/USD is higher after the eurozone manufacturing and services report exceeded estimates.

GBP/USD update (22nd April 2014, 19:00) 22 Apr 2014

GBP/USD looks set to continue its move higher, as it consolidates above $1.68.

EUR/USD update (22nd April 2014, 18:00) 22 Apr 2014

The EUR/USD is trading around the $1.38 level as traders return from the Easter holidays

Market Comment 22nd April 2014 22 Apr 2014

European equities are set to grind higher tracking a positive session overnight in the US. 

EUR/USD update (16th April 2014, 14:00) 16 Apr 2014

The euro is higher versus the US dollar, after the level of inflation in the eurozone remained unchanged in March.

GBP/USD update (16th April 2014, 13:00) 16 Apr 2014

UK unemployment has now dipped below 7%, the initial threshold level the Bank of England introduced in August but reneged upon last month, which has s...

Market Comment 16th April 2014 16 Apr 2014

European equities are set to open higher tracking an overnight surge in the US markets. 

EUR/USD update (15th April 2014, 15:00) 15 Apr 2014

Having popped its head above the $1.39 level at the tail end of last week, EUR/USD has found itself pulled back.

Market Comment 15th April 2014 15 Apr 2014

European equities are set to open flat as they’re caught between two competing poles of sentiment. 

AUD/USD update (14th April 2014, 18:00) 14 Apr 2014

The Australian dollar is gaining ground against the US dollar, as traders prepare for the latest minutes release from the Reserve Bank of Australia.

EUR/USD update (14th April 2014, 16:00) 14 Apr 2014

The euro is under pressure against the US dollar as tensions in eastern Ukraine weigh on the currency.

Market Comment 14th April 2014 14 Apr 2014

European equities are set to start on the back foot as last week’s negative sentiment remains firmly intact. 

GBP/USD update (11th April 2014, 16:00) 11 Apr 2014

After touching $1.68 yesterday, sterling has dropped back, hit by weaker UK construction output figures.

EUR/USD update (11th April 2014, 16:00) 11 Apr 2014

If we see the euro close above $1.39 today, then it will be the icing on the cake for the currency, which has enjoyed a remarkable week.

Market Comment 11th April 2014 11 Apr 2014

European equities are set to open lower tracking overnight declines in the US. 



Share this with your friends

To:
From:
Your comments:

Market Comment 23rd Nov 2011

Just as the Dow was closing last night it looked like US losses had been contained and at the time we were actually calling the FTSE to rise on the open, however the Asian equity markets have plunged to new lows and this has fed through to the start of European trade this morning. 

Read more »

Connect to successful traders – join Marketmoves.com free now

Log In or Sign up

Facebook User?

You can use your facebook account to sign up with Live streaming sport.

Connect with facebook
Remember me.
Did you forget your password?