U.S. Dollar Trading (USD) sentiment reversed again last night with Italian bond yields once again heading towards 7% and negative headlines out of Europe prompting risk off trade. Also dampening sentiment is a growing trade spat between the US and China as the two superpowers clash over the strength of the Chinese Yuan. In US stocks, DJIA +259 points closing at 12153, S&P +24 points closing at 1263 and NASDAQ +53 points closing at 2678. Looking ahead, October Retail Sales forecast at 0.3% vs. 1.1% previously.
The Euro (EUR) The came under heavy selling pressure after opening on a strong footing after news on the weekend of a new Italian Government. When yields did not fall at the start of Europe the market sold the Euro aggressively and a solution to the crisis does not seem clear. Support was found under 1.3600 but sentiment is negative. Looking ahead, Q3 GDP forecast at 0.2% vs. 0.2%..
Oil & Gold (XAU) Gold failed to test $1800 instead fell back on USD strength finding support at $1775. Oil was similar to Gold failing to test its key level instead falling back on rising risk aversion in global markets.
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