Risk aversion is on the increase, with Asian stocks getting hit hard overnight. The JPY and USD have been the beneficiaries against this backdrop, EUR/JPY down at 133.90 from a North American close Friday around 134.50, while EUR/USD is down at 1.4150 from around 1.4190.
I’d been expecting a global stockmarket sell-off late August/early September purely given the extended valuations, but it seems to have started a little earlier than anticipated. Those looking for triggers can point to Friday’s University of Michigan consumer confidence survey, which fell to a 5 month low of 63.2 in August from 66.0. The fact that US regulators closed 5 lenders last week is another negative being highlighted.
I feel this is only the start and think we could see extended stockmarket losses in the coming weeks.
Bad news on the UK housing front. According to Rightmove, the average cost of a UK home slipped 2.2% in August to £222,762 after gaining 0.6% in July. Anyone reading this site should know my feelings on UK house prices. If not I’ll reiterate; I don’t think the recent rally is going to be sustained and feel house prices are headed lower still. Cable trades down at 1.6455 from a North American close Friday up around 1.6530.
For today little in the way of market moving data:
07:15 GMT: Swiss retail sales for June
09:00 GMT: Euro zone trade for June
