Asian markets are trading on a negative note today on the back of slowing US economic growth coupled with downgrade of world’s largest 15 banks by the Moody’s credit rating agency. The major banks include are Credit Suisse, Morgan Stanley, UBS AG and 12 other global bankers.
US Unemployment Claims declined by 2,000 to 387,000 for the week ending on 15th June as against a rise of 389,000 in previous week.
Flash Manufacturing Purchasing Managers’ Index (PMI) declined by 1.1 points to 52.9-mark in June from previous level of 54 in May.
US Consumer Confidence declined further to -20-level in May compared to previous decline of -19-mark a month ago.
Existing Home Sales declined to 4.55 million in last month with respect to 4.62 million in April.
US Philly Fed Manufacturing Index declined further to -16.6-mark in current month when compared to previous decline of 5.8-level in last month.
The Conference Board (CB) Leading Index rose by 0.3 percent in May as against earlier decline of 0.1 percent in prior month.
House Price Index (HPI) was at 0.8 percent in April from 1.6 percent a month ago.
There was a rise in the risk aversion in the global markets after Moody’s cut the credit rating of world 15 largest banks led to rise in demand for low yielding currency of the US Dollar Index (DX) by around 1 percent in yesterday’s trading session.
US equities tumbled by around 2 percent in yesterday’s trade after Moody’s downgraded credit ratings sparking fears of slowing global economy. The currency touched an intra-day high of 82.62 and closed at 82.49 on Thursday.
EURUSD (1.2555) tumbled after the Fed announcements on Wednesday and worries over the Spanish Bank Audit, which showed that the bailout could be as large as 79billion euro just for the banks. Investors also shifted back to the USD as their safe haven choice.
The Great British Pound
GBPUSD (1.5653) Sterling tumbled, even after positive data showed a jump in retail sales, outpacing forecasts. The USD momentum was too strong to allow the pound to gain strength.
Asian –Pacific Currency
USDJPY (80.41) After the Fed declined to offer an QE, markets shift their choice of safe havens back to the dollar, seeing the pair trading over 80 for the first time in a while. The dollar soared against all of its trading partners
Gold (1566.00) gold did what gold does, fall or rises on words from Ben Bernanke; this man is the puppet master when it comes to gold. Immediately after the Fed statements, gold began to tumble shedding over 50.00
Crude Oil (78.82) lost on every front yesterday, first the disappointment over the revision in US growth estimates, then a poor report from China as the HSBC flash remained low, compounded by negative data from the EU and high inventories, what do you get.
Nothing… and that is what happened to crude no support what so ever as the commodity tumbled to break the 80.00 price level.