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In Japan, the labor and business data at the start of the week were seriously lacking the numbers that were anticipated. Japanese Capital spending was on the decrease, printing at -4.9 percent, a sharp contrast to the previous months 13.6 percent increase. It seems that Japan, the second largest national economy in the world, has begun to see its fair share of market troubles.
In addition to poor capex numbers, Japanese labor cash earning also fell for the eighth month in a row. Today’s -1.9 percent decrease was the worst performance in more than three years. Japanese consumer spending is likely to remain down as wages refuse to rise.
Even while Japan’s market is struggling, the UK market has begun to flourish. Manufacturing PMI was a strong 56.3, which was much higher than anticipated. UK manufacturers are continuing to see strong demand, in light of the fact that the exchange rates are high. The H2 growth in the UK is expected to remain stable.
Barclays’ Chief Executive Robert Diamond tried, over the weekend, to reassure investors by stating that “there is no back hole at Barclay’s”. This statement comes on the heels of speculation that the bank is facing a massive loss due to exposure to the asset backed market.
The Labor Day Holiday in the US is anticipated to be quiet, with the lingering concerns that traders are facing. Risk appetite is expected to remain shaky as we enter the North American session and range trading should be the highlight for the rest of the day. Equity trades are expected to pick back up on Tuesday where they left off on Friday. Carry trades are expected to see further inflows. After the Holiday in the US, it will remain to be seen whether the Yen will begin a journey back up to the top of the ranks.
23:23
Posted on Dec-14-2007
