Jobless Data & Debt This Week

The markets should prove rather cautious today as the U.K. and the U.S. both commemorate holidays. As trading ended on Friday the USD finished at the weaker side of its range against the EUR and GBP. Wall Street went into the weekend with a slight gain, but an overall loss for the week. U.S. data last week continued to raise suspicions among some investors that challenges are ahead. Data from Europe was not a bright spot either and has been coupled with the ongoing debt situation, which continues to spark concerns and doesn’t appear ready to disappear anytime soon. Volumes will certainly be lighter than normal in the currency and commodity markets Monday. The broad markets will return to full trading on Tuesday.

Over the weekend Europe continued to produce a wide range of divergent opinions on the Sovereign Debt saga. However the crux of the matter is that Greece, Portugal, and Ireland are all standing in line for different types of additional funds. The real question for investors is how these payments are balanced against austerity measures. While the European Union and IMF continue to speak about a cohesive and well structured plan to implement better fiscal policy, the populations of Spain and Greece continue to mount their discomfort through coordinated protests. And thus the question about individual countries and their sovereign rights versus the ‘greater good’ are bound to play out. There will be a complete lack of major data from Europe, the U.K., and the States today and sentiment for those participating in the marketplace will largely be driven by outlooks surrounding the future of EUR.

There will be critical data however this week. Friday will see the all important Non Farm Employment Change numbers from the States. On Wednesday the U.S. will also have the ISM Manufacturing PMI. Recent data from both the job front and manufacturing sectors have proven lackluster at best. As noted above Wall Street finished Friday with slight gains, but it has collectively suffered almost four weeks of negative trading and this has not so coincidently come about as economic data has increasingly set off new alarm bells.

Tomorrow Germany will release Retail Sales figures. The U.S. will publish Chicago PMI results and the S&P/CS Composite-20 HPI survey will be brought forth. After today’s holiday ends for both the U.K. and the U.S., global traders in essence will have to be braced for a wave of critical data and a plenty of rumors regarding debt. The broad markets have proven volatile the past few weeks as the USD has shown the ability to gain against the EUR with a tide of risk adverse trading helping it. The CHF also continues to find a large amount of backing as investors follow a traditional road and purchase the Swiss currency.

The JPY continues to find itself in a very tight range. During the weekend news began to emerge about the possibility of new election in Japan as the specter of a no confidence vote gains momentum. The AUD has been stronger in recent sessions and this has come on the heels of Gold proving that its staying power remains bright. The precious metal as of this morning’s report is around 1535.00 USD an ounce. Crude Oil is right around 100.00 USD a barrel. Commodity prices should be watched very carefully this week after the past few weeks of rather speculative trading. The commodity prices are clearly showing that there is a battleground raging among those who believe that demand for physical resources will continue to escalate, while others are beginning to question the strength of the global recovery.

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