The abrupt decline in oil prices yesterday triggered attention of the CFTC and the CME. At an email issued by a CFTC representative, it's stated that its surveillance group has placed this issue on top priority and is "working to gather trading information" and such rapid volatility raises questions about high-frequency traders' activities in the market. Yet, the CME announced that it would not cancel the trades made during the period.
As tensions between China and Japan escalate, investors have turned cautious over investing in Asia. Ahead of the BOJ meeting on Wednesday, Fitch Ratings warned that it might cut credit ratings of Japan's auto and tech companies should tensions deteriorate. According to the rating agency, "Japanese companies' sales and reputation with Chinese consumers are likely to be affected, at least in the short term... major Japanese auto and technology manufacturers' ratings may come under pressure". Electronics firms Sharp, Panasonic and Sony, and automaker Nissan are having the greatest risk of a downgrade as they have the highest exposure in China in terms of sales.
On the dataflow, the ZEW confidence indices for Germany improved for the first time in 5 months. We expect the recovery was driven by the ECB's announcement of the new asset buying program. "Economic sentiment rose to -18.2 in September from -25.5 in August. The market had anticipated a modest improvement to -20. "Economic sentiment climbed 17.4 points to -3.8 during the month. "Current situation", however, slipped to 12.6 from 18.2 in August. The US' NAHM housing market index probably added +1 point to 38 in September.