by Chris Becker
Its tension in the Middle East – this time Al Queda in Iraq – pushing stocks over an edge, with US Dollar weakening, causing all sorts of mayhem on commodity FX and stock markets.
Volatility is back!
First let’s look at the rocket under oil.
Both major oil markers – WTI and ICE Brent are up 2-3% on the tension, which has been building for sometime:
Gold (and silver) saw a big safe haven bid, ripping up past $1270USD an ounce, while copper came off a bit and palladium rolling over:
This is predominantly a USD weakness move, with every major cross and “undollar” asset – except stocks – soaring.
The Aussie battler jumped above 94c continuing its rally:
Pound Sterling (GBPUSD) to the moon (on BOE Carney comments – more on this later), with USDJPY sold off:
Stock markets were down nearly 1% in the US with similar falls on the German DAX and UK FTSE – although both the latter are holding up well on daily charts:
Some fairly soft retail sales and advanced jobs numbers in the US didn’t help last night, but this was all event driven from the Iraqi quagmire.
The time and volatility is right for a decent correction here, let’s see if it follows through today.
SPI futures are pointing to some significant falls on the open of the ASX200 this morning as the local market follows the overseas ride. Add further drops in iron ore and the materials sector will probably weigh significantly as well.