Welcome to the new trading month, where the majority of traders really want to forget September’s huge swings, but it doesn’t look like the volatility is going anywhere. Equity markets were slammed in all sessions and the US dollar benefited from the risk aversion trade. Over in Asia, worries of the economy slowing down due to weaker demand in commodities like Copper and the Euro zone debt crisis spilled over to the far east.
In the European session, news about Greece admitting it will not hit the target for deficit reduction of 2011 sent the EUR lower. In the US session. ISM manufacturing index for September grew better than expected at 51.6 vs. 50.5 as expected, but was over looked as equity markets continued downward.
The EUR/USD ranged today from 1.3166 to 1.3380. Gold prices rallied as traders looked for a deal from a commodity that has been lower in the past few sessions. Gold settled at $1,654.70 a troy ounce up $32.40 (+2%) for today’s session. The Dow Jones Industrial average and S&P 500 finished lower at -258.08 (-2.36%) and -32.19 (-2.58%) respectively. Also, Crude Oil traded lower on a stronger dollar to settle at $76.85 down $-2.35 (-2.97%).
What to look out for this week: starting Wednesday we have the ADP Employment Report and the ISM Non-Manufacturing Index data. ADP employment data represents private sector jobs that can show some positive signs for Friday’s number. Although today we saw a more important number from the ISM manufacturing data, with the Non-Manufacturing we can see the activity of sectors like new orders, supplier deliveries and business activity.
On Thursday we are going to get Jobless Claims data, where last week we saw a surprise drop in claims and the drop below 400k. Then Friday we will end the week with the Non-Farm Payroll number, where last month there was no job creation and we are anxious to see if this month there is a rise in job creation in a sluggish sector.