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Dollar Breaks Five Day Winning Streak: Market May Follow This Reversal

Morning Notes

-       Overseas markets down across the board

-       Weakness mainly due to China:

-       In China, speculation that the People’s Bank of China (PBOC) would hike rates as soon as this weekend  drove the Shanghai Comp down 5%

-       Above monetary policy tightening comes following yesterday’s worse than expected China CPI number, which measures inflation

-       European markets down as well, probably due to renewed debt concerns and euro weakness

-       Also mkt sold off on rumors of a 80B EUR bail out for Ireland, but Irish finance ministry comments that this was not true so the mkt recovered

-       Eurozone GDP came in in line

-       Gold and oil down (commodities weak this AM; CRB Commodity Index is at worst level in more than three weeks)

-       Dollar down, breaking its five day gain streak; given inverse correlation to market and that the market was weak this week on dollar gains, I would expect to see the market recover in today’s session (or the dollar should pick itself up)

-       On economic calendar for today is UMich Consumer Sentiment number out at 9:55a EST

-       S&P futures down about 7 handles from FV; they have recovered nicely off the o/n lows though

-       Market is down about 1% already this week



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