Monday August 2, 2010 - 18:32:56 GMT
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Forex Hound - www.forexhound.com
Improving Global Economy Sends Equities Soaring
News of an improving global economy is
sending global equity markets sharply higher at the mid-session. Stronger
global PMI reports are driving up demand for risky assets as traders begin to
price in a weakening U.S.
Traders seeking higher return on their
investments are selling the lower yielding Dollar and Treasury instruments to
take advantage of the strong rally in equity markets today. The rally began
overnight in Asia and quickly spread to Europe.
traders, who have had ample opportunities to buy equities on dips during the
past week, chased the market higher from the opening.
September E-mini S&P 500 traders are
trying to drive this market through the last main top on the weekly chart at
1129.50. A push through this price will turn the main trend to up on the weekly
chart and indicate further upside.
The market may continue to rally early in
the week but upside momentum could slow ahead of Friday‚Äôs Non-Farm Payrolls
The U.S. Dollar remains under pressure at
the mid-session following overnight news regarding a strengthening global
economy and weaker U.S.
business conditions in July.
Strength in the global manufacturing sector
gave investors little reason to lock up lower yields, driving investors into
higher yielding assets. The report also forced investors to question the
strength of the U.S.
The key question remains, how long will
investors continue to seek risk? At some point, like they have in the past,
investors will turn risk averse, seeking projection in the lower yielding
Dollar and Yen.
The Euro surged to the upside as investors
had little choice but to buy the European currency following strong PMI reports
from across Europe. All of the news seems to
be centering on developing strength in Europe and continued weakness in the U.S.
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