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September - a Month Nobody will Forget

Wednesday, September 2, 2015 9:07 AM GMT


- September is the only month where the DJIA has averaged declines for the past 100, 50 and 20 years. So what was August... a warm-up? Before last Monday's plunge we asked in this space whether August was the fat lady gargling before September. Thursday will be the 86th anniversary of the 1929 top and with Mr. Market showing a lot of respect for anniversaries this year and Thursday being the around the 7th trading day from last Tuesday's closing low things should get dramatic again. The thing is, the market is not a fine Swiss watch...It doesn't owe us a perfected 50% retrace to 1999 SPX or a picture perfect 6 to 7 day rebound...''Likewise in the fall of 1987, the vast majority of market participants that year were convinced the bottoming pattern from that years spring correction was going to repeat.'' (Source: DailyFX)

- USD Fed's Rosengren: US labor market has "largely" met FOMC conditions; good reasons to expect Fed tightening to be gradual. Weaker global growth may dim outlook for US jobs; reasonable confidence on inflation not as clear-cut. Long-run funds rate may be lower than in past cycles. (Source:ForexLive)

-  US Equities Close: DJIA 16059.42 (-2.84%); S&P500 1914.01 (-2.95%); NASDAQ 4636.11 (-2.94%).

- CHF SNB's Jordan: No deflationary spiral in Switzerland; prepared to intervene on FX markets if needed. May have to live with negative rates for some time; minus 75 basis points not absolute bottom. CHF SNB's Jordan: Swiss Franc is markedly overvalued. (Source:ForexLive)

- BoJ Deputy Governor Nakaso: BoJ's bond buys haven't disrupted market functions. BoJ is watching whether QQE undermines market liquidity. (Source:ForexLive)                                                                    

- Australia’s economy expanded last quarter at half the pace forecast -- only propped up by government and household spending -- as a slowdown in key trading partner China weighed on exports.Gross domestic product advanced 0.2 percent from the first three months of the year, when it rose 0.9 percent, government data showed Wednesday (today morning)...Firms in Australia -- an engine room of the decade-long global commodity boom -- plan to cut investment in the next 12 months, betting they can meet demand from heavily indebted households with existing capacity. The report spans a period when Australia cut interest rates for the second time this year to a record-low 2 percent to offset falling commodity prices. (Source: Bloomberg)

- Oil prices plummeted on Tuesday, settling 8 percent lower, as weak Chinese data extended a roller-coaster run that knocked oil to its lowest in 6-1/2 years last week before frenzied short-covering fueled a 25 percent three-session surge. The past few weeks have been among the most volatile in the modern oil market's three-decade history, with prices plunging early last week as worries about China's economic strength sent shivers through risk markets, only to bounce back fiercely as bearish traders rushed to cash in short positions. (Source: Reuters)

- The Canadian economy shrank again in the second quarter, putting the country in recession for the first time since the financial crisis, with a plunge in oil prices taking a toll as business investment fell and inventory accumulation slowed. Gross domestic product contracted at an annualized 0.5 percent rate in the second quarter, Statistics Canada said on Tuesday. (Source: NBCNews)

- GBP/JPY made a significant break yesterday, closing below the key 185.00 handle by an impressive 230 pips. This level can be seen acting as resistance in February and more recently acted as support for the pair on July 8th and 9th. From here traders can begin watching for a retest of this area as new resistance. If the pair is unable to climb that high, a break below 181.60 could prove just as compelling for a short trade as yesterday’s breakout at 185.00. Weakness in GBPJPY is in line with the bearish sentiment that has taken hold of the yen crosses as concerns over China continue to mount (Source: dailypriceaction)

- So far this session AUD has been the best performing major vs $USD with +0.08% spot returns while EUR has been the worst with -0.09%. (Source: DailyFX)

- Spain: The number of unemployed registered at the offices of the Public Employment Services rose in August at 21,679 people, 0.54% for the month of August. In the last eight years, unemployment had declined on average in the month of August at 50,564 people. Seasonally adjusted, registered unemployment fell by 5,286 people last month. The seasonally adjusted unemployment has fallen in 26 of the last 28 months. In the past 12 months, registered unemployment has decreased by 359,975 people, the largest decline recorded in historical series in August. (Source: ForexFactory)

- August data highlighted a slight loss of momentum across the manufacturing sector. Output, new business and employment all expanded again, but at slower rates than one month previously. (Source: Markit Economics?)

- Today’s Upcoming Events: US Factory orders, US ADP, Euro zone PPI.

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