The Decline Continues
25-11-2011
Markets in the U.S. were closed yesterday due to Thanksgiving. European markets were open however, and began the day on a positive upswing. Investor sentiment was in a worrisome and cautious mood in the afternoon, with major concerns about the economic future of Europe.
The cautious nature of investors was further justified by the 2% increase on ten year German bond yields, whose sale was declared a failure yesterday. Other number were released in Germany yesterday, including GDP, remaining unchanged at 0.5%, and German Info Business Climate coming in at 106.6, beating estimates by 1.3 points. Similar to Germany, quarterly numbers from the UK show an increase in growth of half a percentage point.
The US Dollar continues to gain ground against other major currencies, showing smaller increases than those witnessed over the previous several days.
Asian markets continued their downward spiral, with a third straight day of decline. The MSCI Index, the benchmark for stock evaluation in the Far East, declined by 4.5% this week, after German Chancellor Angela Merkel dismissed the idea of European Union bonds that may have boosted investor confidence, rather than the current individual member state bonds that are severely lacking in investor confidence.
No significant statistics are scheduled to be released today concerning currencies, with the exception of the French Consumer Confidence Index. Trading will most likely continue under gloomy conditions, with a high likelihood of the USD continue to strengthen at the expense of other currencies. The reason for this is investor confidence in the dollar, which is perceived to be safer than other currencies, will continue to increase as investors search for a safer haven.
It is imperative to note that the USD is not moving in the same direction of the markets. Stocks are on the decline, as the dollar gains strength.
Trading in the U.S. will resume today, but only until 13:00 because of Thanksgiving weekend.
Futures on leading indices are down this morning at roughly -0.25%.
