Spain concluded its bank stress tests which showed that Spanish banks need additional funding in the range of $70 – $80 billion if the markets continue to slide. The tests however failed to take into consideration the soverign debt which is proving to be a major point sticking out on the banks balance sheets which could potentially scare away investors who are expecting a lot more.
The Euro showed losses against most of the currencies as reports of Moody’s intention to downgrade several financial institutions was leaked to the markets. Against the US dollar, the Euro fell to 1.2549.
The momentum from poor US data is clearly being reflected in the Asian markets as indices fell through the overnight sessions. Australia’s ASX led the losses with declines of 1.11% with the Hang Seng following closely with declines of 1.04% and a marginal drop in the Nikkei of 0.53%.
China’s flash PMI data points to a protracted downturn as European imports reduced dramatically.
Moody’s came out with more downgrades from the financial institutions in the US, downgrading over 15 banks that included Morgan Stanley that was downgraded by two notches and JP Morgan which was downgraded by 3 notches.
Weaker than expected housing data and the rise of initial jobless claims added to the woes in the US markets. Manufacturing data showed lackluster figures which came well below market expectations further fuelling the point of the slowdown in the US economy.
The US markets came out low with the NASDAQ dropping 2.44% and 2.23% from the S&P500. Dow Jones fell 1.96%. The dollar index which has previously moved to the level of 82 is trading near 82.259 as the VIS volatility index rose 16.47% to 20.08 which is clearly one of the biggest move during a trading session and in a year.
The US dollar (USD) came out stronger against most of its counterparts reflecting a risk appetite retreat from the markets. Against the Japanese yen, the USD rose to 80.04.
Prices of commodity continue to slide entering into a bearish market. WTI crude oil fell below the $80, trading at $78.63 to a barrel. Gold also showed losses following the Fed announcement and is currently trading at $1564.20. Silver prices moved down to 26.9850 dollars an ounce.
There are no major economic news scheduled for today as markets expect to focus on broader macroeconomic issues.
|EURUSD||1.2610||SHORT @ 1.2610||57% of deals buy EUR|
|USDJPY||80.00||LONG @ 80.00||28% of deals buy USD|
|GBPUSD||1.5690||SHORT @ 1.5690||5% of deals buy GBP|
|AUDUSD||1.0100||SHORT @ 1.0100||51% of deals buy AUD|
|GOLD||1583||SHORT @ 1583||77% of deals buy GOLD|
|OIL||80.15||SHORT @ 80.15||86% of deals buy OIL|