IIFT Daily Note with Peter Brown

Sell off for stocks and the dollar.

Posted by:  |  Time: 7:53 am  |  Topic:
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A sharp sell off yesterday triggered by worries from China about capital outflows due to tapering. hard to analyse news from China as it tends to be confused and minimal detail. China however is a story that spooks the market and the reaction in stocks reflects that. S&P took a big hit and the dollar sold off as well. Euro took a big leap after days of in activity and a failure to break 1.3500 support the French and German PMI’s which were better than expected spurred a bear squeeze rally. The sellers stepped aside and the bulls now have it. Euro is supported by bond purchases as sovereign’s diversify their portfolios from US treasuries after the debt ceiling debacles.

Today the market may recover some but the upside for this stock market is limited. As for the dollar it is unlikely it will rebound much today. Stocks can reverse hard day to day but FX takes a bit longer.

Conditions today should be Choppy

Levels are Euro 1.3754  1.3640  S&P (MAR) 1836  1814  Wall St (DFB) 16340  16140  Wide but it’s Friday.

 

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