DAILY MARKET REVIEW

DAILY MARKET

OVERVIEW August 21st

The tide seems to be near us, as waves of uncertainty are hitting the market these days. The rapidly slowing Chinese economy is weighing down on the market, while uncertainty regarding the date of the Fed's rate hike following some mixed US macro data is also adding worries to the table. Taking the turmoil one step further, Greek prime-minister Tzipras announced his resignation yesterday evening, causing even more havoc. The VIX fear index rocketed by 25%!! Yesterday, clearly reflecting the market sentiment.
Wall-Street suffered its worst day in recent memory, marking a 3rd straight day of loses. The S&P500 shed 2.1%, reaching a 5 month low while heading below its 200 day moving average. The DOW (-2%) and the NASDAQ (-2.8%) descended sharply as well, adding to the already grim day.
Looking for a safe haven, investors are turning to Gold, as the precious metal continues its renaissance after spending weeks in a bear market. Gold prices surpassed 1080$ yesterday, marking a climb of over 7% from its long time low reached less than a fortnight ago. Meanwhile, Oil prices continue to slump, reaching another 6 year low below 41$ for Crude Oil yesterday.
The USD is having a hard time these days as well, as its index descended over 1.5$ or 1.6% against its major peers. The EUR continues to dominate the Greenback, and the EUR/USD pair traded around 1.115 yesterday, breaking 1.12 during Asian trade this morning and reaching 1.128, its highest point in almost 2 months. The latest trouble in China along with slower than expected US growth could hold the FED back from raising its rate in September like most investors expected, and the USD could pay the price in the short term.

ECONOMIC CALENDAR

07:30 – EUR: German Manufacturing PMI.
12:30 – CAD: Core CPI.
13:45 – USD: Manufacturing PMI.