Freepik

1. Global stock markets are falling after ratings agency Fitch downgraded its US sovereign credit grade rating from the highest possible rating AAA to the next lower level of AA+. Fitch says the move was due to rising US fiscal debt and associated governance issues. US Treasury Secretary Yellen said she strongly disagrees with this action. Most global equity indices have moved lower since the announcement, with Asian markets considerably lower – both the HSI and the Nikkei 225 Index are down by more than 2% on the day. Despite this bearish retracement, stock markets generally look very bullish, especially in the USA.
2. In the Forex market, the US Dollar is continuing its medium-term advance against its long-term bearish trend, with the price now seeming to have broken above the former key resistance level at 101.56. Since the Tokyo session began today, the Japanese Yen is the weakest major currency, while the New Zealand Dollar is the strongest, putting the USD/JPY and NZD/JPY currency pairs in focus.
3. Deputy Governor of the Bank of Japan Shinichi Uchida clarified that the Bank’s tweak of its bond yield control last week was aimed at making its large stimulus program more sustainable, and was not the start of an exit from current negative interest rates. This may have helped the Yen weaken further over recent hours.
4. New Zealand’s unemployment rate rose from 3.4% to 3.6% despite more new jobs being created last month that had been expected.
5. There will be a release today in the US of the ADP non-farm payrolls forecast.
6. Energies are continuing to rally, with WTI Crude Oil futures hitting a new 3-month high earlier today above $82 on evidence of supply shortages. This might be of interest to trend traders.
7. In the commodities market, Cocoa futures will continue to be interesting on the long side to trend traders, having hit a multi-year high price last Thursday.

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