Market Brief

Economic data was mixed this morning, with the S& P Case/Schiller Index dropping 18.7% on an annual basis. This announcement supplemented the news from North Korea, which also acted as a catalyst to risk aversion. Most of the G10 began to depreciate, but the move was halted by a much better than expected consumer confidence number, which was released at 54.9 vs. 42.6 (Est.). Following the economic data regarding consumer confidence the market is poised for a recovery in selling activity earlier in the session. There are still some pockets of concern in other regions, particularly Germany having further issues resolving $280bln in “bad debt” on bank balance sheets.

This is of serious concern for traders holding long positions in the Euro, as deterioration in the German economy will have an adverse affect to unifying Eurozone monetary policy. Troubled economies looking to borrow capital from Germany will be less likely to obtain credit from if the climate worsens. German Ifo business climate index rose on a monthly basis to 84.2, but came in worst than anticipated at 85.0. The Euro experienced a sharp drop early in the session, but managed to rally back, testing the 1.40 level as the next resistance point before it will break out into a new range. The Sterling remains resilient hovering around the low range of 1.59, seeking 1.60 as a definitive target before entering a new price range. We expect to see a continuance in the risk rally, but a strong sensitivity to economic data which may act as an obstacle in terms of measuring the likelihood of a long-term recovery.

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G10 Advancers and Decliners vs USD

Global Indexes Current Level % Change
DJIA Index8,473.49+ 2.37
S& P 500 Index910.33+ 2.63
NASDAQ 100 Index1,750.43+ 3.45
Nikkei 225 Futures9,230.00+ 1.19
Hang Seng Futures16,920.00- 0.01
FTSE futures4,398.00+ 1.24
SMI Futures5,429.00- 0.26
World Markets Current Level % Change
Crude wti62.44+ 1.25
Gold952.15+ 0.02
Silver14.60- 0.07
USD Index80.09+ 0.08
VIX30.62- 6.16