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ForexMarket News - Trade the News - U.S. Market Update
U.S. Market Update
Dow -22 S&P -4.2 NASDAQ -8.6
- Equity futures were trading handily lower when U.S. traders arrived at their desks this morning. European bourses were under pressure after reports that the UK's fifth largest mortgage lender, Northern Rock, asked the BOE for emergency support. The softness in equity trade extended into the NY open after the August advanced retail sales data was reported below expectations with particular weakness in the ex-autos figure. Jittery equity markets buoyed early demand for Treasuries pushing the 2-year cash yield back below 4% briefly. Markets have stabilized since the release of Sep. preliminary University of Michigan confidence number though. Credit and housing turmoil has not manifested itself within investor expectations as quickly or pervasively as many had feared. Treasury markets have given back most of their gains while Indices have pared losses. The 2-year yield has risen back above 4. 05% and the bechmark is at 4.47%. Several of the bellwether brokerage names have bounced well off of early session lows as traders position themselves ahead of next weeks Q3 earning's releases and Tuesday's FOMC decision. Semiconductor names remain relatively week as a pre-market downgrade in Intel has sent the SOX back blow its 200-day EMA. Cardinal Health is at session lows down 3% after reaffirming their long term growth range for their supply chain segment, but backing away from comments earlier in the year that suggested profits would be at the high end of that range. CAH -3% ABC -3% MCK -2.6% October Oil has not been able to get above $80, but natural gas has recouped all of yesterday's losses by adding 6.5%. Dec gold has moved out to a 1-year high briefly trading above $725 on talk on Chinese buying.
- The GBP was softer through out the European session initiated by the Northern Rock reports, and latter confirmed by the BOE. GBP/USD tested below the 2.01 level, off by 80 pips from the opening levels seen in Asia. Also hurting the pound was Aug Rightmove House Price Index which came in at -2.6% m/m and +9.6% y/y. This was the Largest M/M decline since Jan 2002. The Eurogroup meeting in Norway resulted in lots of rhetoric from EU finance ministers and central bankers. Overall the Finance Ministers theme echoed that the Eurogroup was not concerned about strong Euro as long as economy remains strong; The group noted that France has concerns about growth. The ministers noted the strong euro hurts exports but offsets high oil prices, but oil prices are a concern, and lastly that market turmoil is far from over. ECB's Trichet: noted that the Baseline scenario for Europe remains intact and GDP seen around potential.
The USD held its ground against the major currency pairs in the session, despite the disappointing US retail sales data. EUR/USD at 1.3860, USD/CHF at 1.19 and USD/JPY at 115.05 USD/CAD hit fresh 30-year lows below the 1.03 level. Fixed-income futures saw earlier gains erode as the European close approached. The Dec Bund was 40 ticks off its best level at 114.10, Dec GILTS firmer by 46 ticks at 108.47, aided by the Northern Rock situation and rightmove housing survey. European bourses are off their worst levels with FTSE off 1% at 6300, DAX -0.3% at 7512 and CAC at 5541, off 0.5%
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