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Forex Market News - Trade the News - U.S. Market Update
U.S. Market Update
Dow +104 S&P +12 NASDAQ +18
- U.S. Indices gain ground ahead of this afternoon's FOMC decision. Positive first takes on earning's reports from Lehman Brothers and Best Buy and a relatively benign August PPI data sent equity futures higher into the NY open. After the initial pop for financials sellers entered the market weighing on Index gains, but as LEH's 10am conference call winds down banks and brokers have moved back towards their highs. XLF +1.25% Supermarket names are strong after Kroger's earnings report. KR +7% SWY +3.5% WFMI +4% SVU +1.5% Treasury markets are modestly lower with Benchmark yield climbing back to 4.5%. Energy futures are near session lows led by natural gas, which has given back close to 7%. Oct crude is still holding above $80.
- Initially FX markets were too focused on the Lehman Brothers 3Q earnings report to gauge the impact of the subprime crisis. Global equity markets rebounded sharply following the brokerage results. The current high negative correlation between yen and equity prices remain intact. EUR/JPY traded higher towards the 160.90 level, while USD/JPY probed the 116 handle following LEH's results. Overall the USD continued to sustain bouts of weakness from US data. PPI came in at -1.4% v -0.3% expectation and US Net TIC data fell far below market expectations with a $19.2B inflow for July. ECB's Ordonez noted that market uncertainty has added complexity to monetary policy and stressed that they must watch Euro after Fed decision later today. ECB's Weber reiterated the view that inflation remains the overall concern and cited cites oil, food price rise. GBP/USD managed to climb back to the 2.0 handle helped by a BOE liquidity operation to sooth over lingering effects of the Northern Rock banking crisis. NRK noted that it has seen significant "drop-off" in withdrawals over the past day. EUR/GBP was off session highs of .6974 and GBP/JPY bounced 300 pips from session lows of 228.22. CAD again set fresh 30-year highs against the USD at it tried to breech the 1. 02 handle, aided by continuing firmness in commodity prices as oil tested above the $81 level and spot gold broke above the $720 area.
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