FX Highlights

  • USD is trading sharply higher supported by safe haven demand as global equity markets trade sharply lower and crude prices drop below $66 a barrel, US regulators closed five lenders which sparked concern about the outlook for financial markets, Colonial Bank group closed operations, Shanghai index falls over 5% pressured by concern about the global recovery outlook, GBP pressured by report of falling home sales, Japan emerges from recession investors have doubts about recovery, JPY trades at a two week high Swiss retail sales rise more than expected, uncertainty about the outlook for the global recovery is driving factor in all the markets
  • Focus turns to today's release of US Empire State manufacturing index and NAHB housing index
  • Japan's Q2 GDP falls 0.9%, rises 3.7% y/y, CAPEX spending falls 4.3%, Financial Times reports that Japan's economy emerges from recession, recovery outlook remained shaky, JPY higher
  • UK August Rightmove house prices fall 2.2%, Daily Telegraph reports that UK housing affordability is at highest level since 1996, GBP lower
  • ECBs Weber says it's too early to say if the financial crisis is over, Q3 GDP may be better than expected, EU June trade surplus widens to 4.6 bln from 2.1 bln last month, EUR lower
  • Swiss economic's minister says the economy bottomed in Q1, unemployment expected to continue to rise, Swiss June retail sales rise 0.9%,CHF lower
  • 32.2% of all US mortgages are under water down from 32.5% in March according to First American Corelogic
  • CFTC commitment of traders released Friday for the IMM showed speculators sharply reduced short USD positions
  • Sales of existing new home sales in Canada hit a new record in July rising 18.2%
  • ECRI says US recovery will be the strongest since 1980 but the growth wont be apparent until sometime in 2010
  • Bloomberg reports that international investors bought a record amount of US three-year notes last week and took the biggest share of 10 year note auction since 2005 and almost half of the 30 year notes sold
  • US equity markets set to open sharply lower on banking worries, European equities 2.5% lower, Nikkei closed 328 points lower

Upcoming Events

  • US- Monday, August Empire State manufacturing index will be released expected at 1 compared to -0.55 last month along with August NAHB expected to improve to 18 from 17
  • CAN- Monday, No major economic data is due for release today