Markets Bearish Sentiment Continues

Daily Forex Fundamentals | Written by AC-Markets | Oct 24 08 08:18 GMT |

Market Brief The Usd continued to appreciate in the Asian session, as concerns over Emerging Market mount. It seems that worries over the US economy and global financial system have been replaced with broader apprehension over the depth of the global growth slowdown, generating an extensive and far reaching bearish sentiment. EurUsd traded up to 1.3000, as risk appetite improved, before rapidly selling of to 1.2668 session lows. The Jpy was stronger across the board, as UsdJpy fell to 94.77 (13-year low) and yen fueled carry trades came under significant pressure. There was no temporary reprieve from Gbp selling, as the cable dropped to 1.5831 from 1.6327. Yesterday, Wall Street was able to claw its way into the green, with S&P climbing 1.26%. Yet, Asian regional indexes failed to capitalize on the positive momentum, as weak earnings from South Korea scared investors. The Nikkei is currently down -9.59% and European markets look grim, with the CAC -4.94%. The commodity complex is down, as traders perceive that any investment which will be affected in the coming global recession is a must sell. We see the current FX trend continuing for the remainder of the day, with Usd and Jpy the main beneficiaries of G10, carry and EM selling. Given the anxiety currently driving markets today, UK provisional estimate of Q3 GDP should evoke a significant reaction. We expect -0.2% to reflect Britain's economic downturn and the start of a prolonged contraction. We don't expect the markets bearish Gbp sentiment to turn, after seeing this pessimistic number and pressure on the Sterling should continue….next stop 1.5618. In the Eurozone participants will be watching PMI surveys, which are likely to suggest that output in the area has contract once again. Disturbingly, the new orders balances should grind lower and the employment index downward trend seems to be set. There is significant event risk surrounding todays OPEC meeting. The market have priced in a 1.5 mio barrel cut. Anything more could be interpretive as an indication of weak global demand and trigger additional selling across asset classes. ACM FOREX Disclaimer: This report has been prepared by AC Markets (thereof ACM) and is solely been published for informational purposes and is not to be construed as a solicitation or an offer to buy or sell any currency or any other financial instrument. Views expressed in this report may be subject to change without prior notice and may differ or be contrary to opinions expressed by Salesperson or Traders of ACM at any given time. ACM is under no obligation to update or keep current the information herein, the report should not be regarded by recipients as a substitute for the exercise of their own judgment.