Morning Minutes

US Dollar Soars, Stocks Slide, as America Returns to Trading




US investors return from their holiday weekend to find the greenback soaring as capital continues to flee other countries and seek haven stateside.  The Euro is down 1.3% this morning, trading at a 20-year low near 1.0250 with par not that far away. The Australian Dollar is down 1.3% as well, despite Australia’s central bank raising its benchmark rate by 0.50% as expected. The Canadian Dollar and British Pound are both down about 1.0%. Gold is down a more moderate 0.2%.

In equity trading, European bourses are getting slammed with the Dax down 1.6%, the FTSE falling 1.4% and the CAC crashing 2.4%. Losses in US index futures have been accelerating as the morning has progressed. Dow futures are currently down about 0.9% and NASDAQ futures are down 1.25%.

Commodities are also getting hammered today. Natural Gas is down 4.5%, Copper is down 3.5%, Platinum is down 1.8%, Brent Crude is down 1.6% and WTI crude oil is down 0.2%.  

Service PMI reports from Japan, Europe and Australia have been coming out overnight with numbers in the low 50s suggesting continued slight expansion. Australian construction PMI dropped into contraction territory (46.2 vs previous 50.4). US Non-manufacturing PMI comes out tomorrow due to the holiday. US factory orders are due at 10:00 am EDT (street 0.5%).

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Colin Cieszynski, Chief Market Strategist

Colin Cieszynski, CFA, CMT
Chief Market Strategist
+1 (647) 282-4428

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