Bonds Keep Rolling, Dollar Up Versus Euro

U.S. 10-year Treasury bonds shot higher today, to the highest prices in
nearly 2 years, as credit losses continue to pile up. Traders and major funds
are all heading for the hills, as global equity markets continue to plummet. A
number of hedge funds have closed up shop, fatally crippled by the credit
upheaval, and one of the largest mortgage lenders in the U.S., Countrywide
Financial, is rumored to be facing bankruptcy. Bonds rise on economic weakness
and fall on strength, so it’s safe to say that these recent market happenings
are bad news for the future of the market.

The yen rose to just over 1-year highs against the U.S. dollar and the euro
today, as equity markets around the world continue to plunge on major global
credit market problems. The yen gained the most in one day since 1998. Traders
are buying back previously borrowed yen to cover riskier asset positions, as
stocks around the world plummet. The yen gains as traders close their positions.
The dollar rose against the euro, but gave back some of those gains through the
morning. The dollar fell against the Canadian dollar and the British pound.

Crude oil futures fell over 4%, as credit problems spread across the market,
and traders bet that slowing economic growth will dampen energy demand. Today’s
drop was blamed on massive equity market unrest, and concerns that debt problems
will plague the entire market. Natural gas fell over 1% today, on speculation
that supply levels will continue rising.

Gold futures fell over 3% today, as traders scrambled to protect themselves.
Gold usually trades inversely to the dollar and with oil, but today gold fell as
traders sold gold to raise cash to cover equity losses. Copper futures fell 7%
today on weak housing reports and more overall economic growth concerns.

Grains plummeted today. Soybeans fell just over 5%, and corn dropped 2%.

The markets have had a volatile final hour over the past week and today’s
strong 200 point last hour rally was no exception. The Dow ended the day flat,
while the S&P 500 gained 0.4% and the Nasdaq lost 0.3%. Click

to read the rest of today’s

Stock Market Recap

Economic News

U.S. housing starts fell to the lowest
levels in a decade in July.

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