Stability For A Day

The EUR received a boost from an announcement via the E.U. that it plans on trying to institute a plan that would create greater liquidity for its ‘bailout fund’ if it is called upon. This created stability for the Single Currency after a rough start on Monday and equities began to also turn in positive movement. The GBP and AUD managed to come off of their respective lows. Gold continued its fireworks and finds itself around 1640.00 USD as of this morning. The precious metal continues to have a myriad of discussions about its direction. One thing is clear regarding Gold, that as speculators make their respective choices regarding their positions, the impact they are causing has been profound.

Wall Street turned in solid day of gains on Monday, this as investor sentiment was helped by the pronouncements coming from Europe. But it remains to be seen if yesterday’s rally proves to be a turning point that can build consistent upwards momentum or if the day’s results will merely prove to be a short lived relief rally. Today the U.S. will see the CB Consumer Confidence reading and it will also get data via the S&P/CS Composite-20 HPI. Tomorrow Core Durable Goods Orders numbers are on schedule along with Crude Oil Inventories. The USD which has been a beacon for safe haven trading did give back some of its value on Monday and with a slew of economic data coming forth these next couple of days it will be interesting to see what transpires. Per the Federal Reserve’s recent warning and the past few months of results per data releases investors will likely approach these numbers with caution.

The rebound in the EUR put it back into the middle ground of what has become a known short term range. While the E.U. was able to shift confidence for a day it remains to be seen if they will be able to sustain the hopes of investors who are looking to be reassured that a plan exist to create a foundation of strength for European financial institutions. The German DAX index remains an important watchtower because the Germany economy is the lynchpin for Europe. The German Ifo Business Climate report did come in at 107.5 yesterday, which was slightly better than the forecasted result of 107. Today the GfK Consumer Climate marks will be brought forth and tomorrow inflation data will come from Germany. While the EUR found firmer ground yesterday it is not out of the woods yet and will see a test of its range in the coming days.

Commodity prices continue to show downside pressure. While Crude Oil did muster a gain on Monday, short term traders must take into consideration that the trend has been rather negative. Tomorrow’s Crude Oil Inventories numbers will be watched, but it is the overall economic outlook which is bringing about the headwinds. Silver has seen a huge amount of volatility the past week, even more so than Gold, when examined on a percentage basis.

The JPY remained land locked within a tight range on Monday. Investors are probably more than weary of the Japanese currency taking into consideration that the BoJ is thought to be looming over the JPY. It is no secret that the Japanese government does not look fondly on a strong JPY, but it is an open question as to how much influence the BoJ can muster on the currency given its current economic circumstance.

Yesterday’s positive moves in the equity markets helped bring a sigh of relief to many worried investors, but it remains to be seen how comfortable the broad markets will allow participants to feel in the coming days.