A terrible day for stocks across the world shook investor
confidence as the dollar made strong gains across the board.

Despite little discernible fundamental data, some
disappointing earnings results from US firms caused the Dow Jones to fall to
its lowest point since June. Equities across Europe felt similarly shaken as
the recently buoyant mood quickly vanished.

A terrible day for stocks across the world shook investor
confidence as the dollar made strong gains across the board.

Despite little discernible fundamental data, some
disappointing earnings results from US firms caused the Dow Jones to fall to
its lowest point since June. Equities across Europe felt similarly shaken as
the recently buoyant mood quickly vanished.

Staying very range bound until markets in the US opened, the
dollar quickly climbed as the poor earnings were released. Mirroring the dollar
and reversing several days of declines, the yen strengthened as its status as a
net exporter caused investors to return to the safe haven.

Though not amongst the biggest casualties for the day, the
euro and sterling both suffered as a result of the crisis in confidence. The
euro also fell against sterling as the single currency was deemed to be more
risky.

This euro uncertainty was compounded as news that Moody’s
branded five Spanish regions as ‘junk’. A previous downgrade for the
Mediterranean nation had resulted in a strengthening for the currency, however
it appears that assurances in the US economy are a precondition for any
investor optimism.

Today’s Key
Announcements:

• 02.45am – CNY – Flash Manufacturing PMI: slight contraction
  but well above estimates
• 08.30am – EUR – German Ifo Business Climate: expected
  increase
• 09.00am – EUR – Flash Manufacturing PMI: an improving
  contraction expected
• 09.00am – EUR – Flash Services PMI: expected return to
  slight growth
• 11.00am – GBP – BCI Industrial Order Expectations
• Tentative – EUR – German 10y Bond Auction
• 12.45pm – EUR – Draghi to speak
• 14.00pm – USD – Flash Manufacturing PMI
• 15.00pm – USD – New Home Sales: expected increase
• 19.15pm – USD – FOMC Statement