MORNING BRIEFING: Unemployment rate at 9.5% in the Euro zone, the highest in over 10 years.

[RTFX-Trading]

MORNING BRIEFING: Unemployment rate at 9.5% in the Euro zone, the highest in over 10 years.

What’s new:
United States: Dow Jones drops 1.96%, NASDAQ falls by 2%.
United States: Manufacturing sector grew in August, up to 52.9.
United States: Construction spending drops slightly in July.
United States: Pending home sales reaches highest level in over 2 years.
Euro zone: Unemployment rate up to 9.5%, the highest in over 10 years.
United Kingdom: Unexpected contraction in manufacturing activity in August.
Germany: Drop in unemployment unexpected, manufacturing sector is on the rise.
Switzerland: Renewed growth in the manufacturing sector in August.

Today:



Overnight Rates and Indices:
EURUSD: 1.4226 – 1.4189.
USDCHF: 1.0680 – 1.0651.
GBPUSD: 1.6179 – 1.6114.
EURJPY: 132.26 – 131.45.
USDJPY: 93.01 – 92.52.
DowJones: 9'310 1.96%.
NASDAQ: 1’968 -2.00%.
S&P 500: 998 -2.21%.
Nikkei: 10’263 -2.54%.
Shanghai: 2’694 +0.39%.
Gold: $953.70.
Crude Oil: $68.51.
 
Comments:

Tokyo and Wall Street fell sharply yesterday after the liquidation of long positions built up in recent weeks. The market believes that stocks have increased too fast compared to the prospects of economic recovery. Psychological levels of 10,000 on the Dow, 1,000 on the S & P 500 and 2,000 on Nasdaq were not broken significantly, and therefore a bearish sentiment has returned on the stock market. This has led to a decline in risk appetite and a stronger Dollar.
   
The unemployment rate reached 9.50% in the Euro zone, the highest for over 10 years, which has weighed heavily on the single currency and is declining against the Dollar to 1.4220. At some point, some European politicians should start complaining about a strong Euro.

In England, the Pound has suffered a massive sell-off following the contraction in manufacturing activity in August to 49.7, again below 50, against 50.2 in July. This is the first decline since February.

Despite yesterday’s volatility on the foreign exchange market, the EURUSD is still confined within a range between 1.3950 - 1.4450, with large investors still watching from the outside. Following discussions with individual traders, investors are waiting for next week to take new positions after having analyzed the statements by the ECB tomorrow and the US employment report on Friday.

Good Day

Emman Xuereb
RTFX Ltd
Head Office
The Cornerstone Complex, 16th September Square | Mosta MST 1180 | Malta
Tel:  +356 23 31 00 00
Fax: +356 21 41 24 58
Web: www.rtfx.com

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