SubscribeDaily Futures Commentary May 21, 2009
Thursday, May 21, 2009
The focus today should be on the currency markets and their effects on trader appetite for risk. The rally in the equity and commodity markets has been driven by a weaker U.S. Dollar and increased aversion to risk. Overnight, however, the S&P Corp. triggered a sharp decline in European equity markets following the release of a report stating its concerns about the increasing debt burden in the U.K. In its report Standard & Poor’s built a case for U.K. debt reaching 100% of GDP growth and even warned that the AAA rating of government bonds could be reduced. This report triggered a widespread reaction in global equity and currency markets. Traders today should pay close attention to the moves in the currency markets as a sell-off in the majors could lead to increase risk aversion and may trigger the start of a substantial break in equity markets.
Investor sentiment turned bearish overnight following the release of a report by the S&P Corp. stating that they have turned negative on the U.K. economy. This negativity spread to the June Euro as some traders feel that the Euro Zone economy may …
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