Street fights and protests in Spain sent the Euro down below 1.29 in early Asian trading this morning. Euro/USD recovered to 1.2950 during yesterday’s trade to fall down to 1.29 on protest news from Madrid in the evening. Euro/USD is at present trading at 1.2875. As has been the pattern in Greece, Spaniards took to the streets and surrounded Parliament. Violent clashes with riot police over austerity followed. The protests came in the wake of weeks of indecisive foot dragging by a Spanish government unable to decide whether to ask for an international bail-out.
Serious concerns over a slowing global growth are back on investor’s radars as equity rallies fed by major central banks monetary easing, are fading. Both Dow Jones (- 0,75 %) and Nasdaq (- 1,36 %) fell yesterday, pushed down by Caterpillar and Apple. Caterpillar issued a profit warning and fell close to 5 %. Apple fell 2,5 % as the company sold out of its initial supply of iPhone 5, raising concerns whether Apple would be able to keep up with demand. The South Asian Pacific Index (MSCI) and the Shanghai composite both fell on weariness on Spain.
New worries about the development in the Euro zone and slowing economic growth, led to further fall in commodities. Oil prices, which were lifted on increased tensions in the Middle East over the weekend, fell back. Brent crude which traded at 111 yesterday dropped one dollar to 111 a barrel. Gold which rose 20 dollars an ounce yesterday, has fallen back to 1760 in Asia.
Australia, which is very dependent upon growth in China, has seen both stock prices and the Aussie dollar falling. USD/JPY is stabile at 77,74. As a positive sign in yesterday’s market, July numbers show that US home prices rose for a sixth straight month. Together with a jump in consumer confidence in September, these are positive indications that Americans are ready to loosen their spending.
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