Risk aversion re-entered the market place late last week resulting in European equities taking a slide. The ESTX 50 fell a little more than half a percent though FTSE 100 managed to add 7.5 pts. In the U.S, the DJIA edged slightly lower by 37.19 points, halting a streak of 8 session with positive gains. The Dow closed at 10,742 on heavy volume as 434 million shares traded hands.
Commodities took a big hit Friday when India’s Reserve Bank unexpectedly raised rates. This sent shock waves careening through emerging markets as traders reduced bets that demand will continue to grow at the same pace. Gold plummeted $20.35 to 1,107 and Oil fell a $1.52 to close the week at 80.68 Oil still was a net positive for the week after opening at 81.24.
The DXY closed the week at 80.724 after dipping below 80 for several day last week. The index weighted basket found support at the 50 day Moving Average and now seeks to make new high for the year. Taking the brunt of Friday’s Dollar rally was the GBP as it gave up 1.52%. As it crashed below 1.5150 it took out stops sending the Pound tumbling briefly below 1.50, before barely recovering (see chart below).
Economic Data Releases:
Friday should have belonged to the Canadian Dollar as CPI data printed in line with expectations and Retails Sales were very strong. However, the Reserve Bank of India’s surprise rate increase coupled with new concerns over the bail out plan for Greece put the kibosh on the CAD’s run for parity. Monday will be a quiet day for data releases. Looking ahead to Tuesday, U.K CPI data and the Retail Price Index will print. In the U.S, Existing Home Sales figures will be released.