More of the same as we enter Q4

The markets have sold risk as we start a new quarter. The problem is that we still don’t know what will happen with Greece – today’s Ecofin meeting in Europe should be the major driver of the markets during the NYC session, along with the ISM report released at 1000ET/ 1500 BST.

Themes:

• Stocks have sold off sharply and are being led lower by Europe’s banking sector. This has weighed on the euro, after selling off to 1.3310 this morning it is trading in a tight range between 1.3310 and 1.3350. The markets are looking for some more direction from the Eurozone’s finance ministers at today’s Ecofin before they decide if we move lower from here. The statement will be scrutinised by the market for 1, details on potential leverage for the EFSF and 2, details on when Greece will receive its next tranche of bailout funds. The risk is that the meeting disappoints and the euro sells off further. Below 1.3300 sees to 1.3260 first.

• GBP has been one of the biggest losers out of the majors today. It broke below the key head & shoulders support at 1.5520 and hasn’t recovered even though the S&P affirmed the UK’s triple A credit rating and said the outlook was stable. The pound was driven lower by some dovish comments from UK Chancellor George Osborne who said that it would “help” the BOE keep rates at record low levels so that the government’s fiscal consolidation plan can go-ahead on schedule even though growth has started to dip. Below here the 1.5330 level –the Sept 22 low in GBPUSD – comes back into view.

• Stocks are lower, while oil remains choppy. The FTSE 100 dipped below the crucial 5,000 mark at one stage today; however, it recovered prior to the NYC open. Without the prospect of a resolution to the Greek debt crisis then the outlook for risky assets remains fairly bleak.

• The outlier today is the gold price. It is up a stunning 2.7% although the dollar remains fairly flat. This may be due to news that Qatar Holdings, which controls the wealth of the Qatari Royal Family, is planning a $10bn investment in the natural resources sector with access to physical gold its chief priority. The fund has already bought a 10% stake in a Greek gold mine European Goldfields. This is positive news for Athens as it needs to attract foreign investment during these troubled economic times to boost growth. The Qatari interest in gold has probably helped to re-focus attention on the benefits of holding gold in the current environment. $1,614 remains key Fib support, while $1,656 (100-day sma) is the next resistance level, and ahead of that is $1,700.

• Ahead today, the ISM manufacturing reading for September will be key. Europe saw its manufacturing sector contract for a second month in September, while the UK saw a bounce in its index. The ISM is expected to fall to 50.3 from 50.6, growth- but only just.

Источник: Forex.com

03.10.2011