Coming Up today (all times GMT)
- German Ifo Business Climate(8:00)
- GBP Public Sector Net Borrowing (8:30)
- CAD Core CPI m/m (11:00)
- CAD Core Retail Sales m/m (12:30)
Asian markets continued selling off assets in line with the recent wave of risk aversion. As should have been expected, whatever caused the 'glitch' that occurred in the NYSE a couple weeks back has come back full circle to haunt the markets. After popping off of its lows that day week, global markets have completely retraced their rebound and have ended lower across the board. Major institutional insiders are speaking of the correction we've been waiting for. It seems everyone is selling everything, including Gold.
Trading in the Eurodollar may have surprised some in the markets, but not seasoned traders who were expecting a bit of kick-back to the extreme selling of the past few weeks. As the world deleverages from riskier assets, so too are the Europeans who then repratriate their funds back into the Euro, adding to the effects of the recent short covering/ short squeeze rally.
Japanese importer bids have been supporting the greenback overnight as business interests dominate the direction of the Japanese exchange rate. The Nikkei has dropped over 5 percent this week alone: if the Yen were to strengthen along a losing market, Japanese exporters would get double hit, so accordingly that rate is being supported.
Gold got beaten some more overnight, struggling to hold on to investors as traders drop like flies out of their longs. In a climate where everyone is selling everything and the real threat to the money supply is deflation due to the recessionary effects of a double dip, Gold no longer represents a safe haven. Accordingly, Gold continues its epic slide south.