TODAY FOREX IN REVIEWS

Risk sentiment is dropping slowly now that earning figures have disappointed the markets and with the ending of the Eurotop on Friday investors have gotten little to keep the momentum of the rally going. Friday the Stoxx Europe 600 index retraced from its June 2011 high. European leaders will need to show more determination and action towards a banking union in their December meeting to keep investor confidence. Stock prices punished the European leaders as all indices dropped on Friday. the Italian MIB dropped 2% while the Spanish IBEX plummeted 2.31%. The EURUSD barely closed above the 1.30 level but seems to look for some retracement from the downward move this morning.

Asian markets opened up far in the red as bad U.S. data got mixed with a drop of more than 10% in Japan’s September year on year exports. After an initial drop of more than 1.3% in the Nikkei 225 markets in Asia recovered slightly with BOJ Governor Masaaki Shirakawa’s speech in which he vowed to conduct “Seamless” monetary easing. Currently the Nikkei 225 is trading only 0.15% in the red while the Hong Kong Hang Seng index managed to increase 0.12%. Keep a close eye on the USDJPY in coming days as easing might push the currency over the 80 resistance level.

The American markets got a beating last Friday. Apart from worse than expected earnings, another 2 banks got closed by the Federal Deposit Insurance Corp. So far there have been 46 U.S. banks that have been closed. Today more than 140 companies will report earnings. After most big companies have kept beating estimates and defying the crises it looks like Q3 earnings will not stay in the clouds. The DJ 30 weakened 1.52% the S&P 500 had to give up 1.66% and the Nasdaq was hit hardest dropping 2.19%. With the decrease in risk appetite there was more demand for safe assets and as the dollar advanced we saw gold drop further towards the 1700 level.

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