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FX Day Trading - 2 November 2011
The dog that didn't bark
La la la la la...
Global manufacturing slows
M. Nicolas and Fr. Angela Merkozy request the pleasure of the company of Mr Georgios Papandreou at dinner on Wednesday 2 November at Le Château d'If Grilling Room. 7.30 for 8.00pm. Black tie and steel helmet. No side arms.
The meeting will take place just 24 hours before G20 leaders gather for their summit in Cannes. Like the world's financial markets, the French president and the German chancellor must be desperate to know what Mr Papandreou thinks he is playing at.
It is at this point that gentle readers will expect to hear how Greece's demand for an opt-out from its own rescue provoked a firestorm of death and destruction for the euro. Sorry to disappoint, but it didn't.
Amazingly, the euro, the US dollar, the Japanese yen, the Swiss franc, the Australian dollar and the pound start today at levels identical, or nearly so, to those at which they opened yesterday. The only story is of the dog that didn't bark.
Quite what this absence of action demonstrates is a mystery. It could be the calm before the storm, the eye of the hurricane, or a dozen other meteorological metaphors.
Equally, it is possible that investors never really trusted the viability of the agreement that was announced six days ago and that they see the Greek referendum as just one more possible road to perdition. Or maybe we are in the denial stage.
Tuesday's economic data will have gone some way to distracting financial spread betting investors from the open sore of Europe's debt crisis.
The monthly round of manufacturing sector purchasing managers' indices (PMIs) can best be described as a disappointment, not least because Euroland's numbers were not published.
Of those that did appear, all fell short of expectations. Switzerland's was down by a point at 46.9 and Britain's by two and a half at 47.4. The US figure managed to remain positive at 50.8 but that represented a fall instead of the forecast improvement.
The gross domestic product (GDP) of Britain grew by 0.5% in the third quarter and by the same percentage in the year to September. The result was slightly better than spread betting investors were expecting but any advantage to the pound was obliterated by the weaker manufacturing PMI that came out at the same time.
Today's agenda began with another poor showing by the Australian property market. The number of building permits issued in September was 12% fewer than a year ago, and down by 13.6% on the month.
This morning the belated Eurozone manufacturing PMIs will appear. All will struggle to match the previous month's levels. Britain's construction sector PMI has no published equivalent.
After lunch ADP offers its take on the US employment situation in October, a taster for Friday's non-farm payrolls (NFP) figure.
This evening the Federal Open Market Committee (FOMC) announces any changes to US interest rates and Chairman Bernanke hosts a press conference. No policy changes are expected but the Fed is desperate to increase employment and it has some very creative people on the staff.
As for exchange rates, if FX spread betting investors can remain calm only a day after vandals set fire to the Euroland debt solution, they ought not to become agitated by anything on today's list.
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'Weak Manufacturing PMI Pushes Pound Spread Betting Market Down', Article by Moneycorp, last update: 2-Nov-11
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